The World Bank's private financing arm on Friday launched a joint venture with Europe's largest asset manager, Amundi, to create a $2 billion green bond fund to unlock financing for environmental projects in developing countries.

In the wake of the Paris climate deal there is greater interest in finding new ways to direct financing towards environmental projects, such as renewable energy, Amundi's deputy head of institutional clients Frederic Samama said.

"People have realized we will only tackle climate change if we are able to mobilize the civil society as well. It's no longer just in the hands of policymakers," he told AFP, adding that the goal of the fund is to mobilize financial markets.

He said Amundi already has tested the waters with large institutional investors, including pension funds in Sweden, France and Germany, and a sovereign wealth fund in New Zealand, and "received very good feedback."

The World Bank's International Finance Corporation will invest up to $325 million in the new Green Cornerstone Bond Fund, which will buy green bonds issued by banks in Africa, Asia, the Middle East, Latin America, Eastern Europe and Central Asia, according to a statement.

Amundi will raise the rest of the $2 billion from institutional investors worldwide and will provide its services in managing emerging-market debt. The fund will gradually shift investments to green bonds, and aims to be fully invested in green bonds within seven years.

IFC CEO Philippe Le Houerou said the fund will "lower the risk for the private sector and attract new investors -- essentially creating a market where there was none."

"We've already identified dozens of banks in many developing countries around the world that could be interested in this fund. It's a win-win -- supporting the green economy and deepening access to international markets for emerging market issuers," he said in a statement.

Samama said while there is a limited pool of green bonds at the moment, the size and protection offered by the new joint venture will attract investors and in turn encourage banks in developing countries to issue these vehicles to finance green projects.

"We hope demand from investors will accelerate the issuance of green bonds."

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