The OECD defines a Green Bank as a public or quasi-public entity established specifically to facilitate private investment into domestic low-carbon, climate-resilient infrastructure.

To overcome investment barriers and leverage the impact of available public resources, over a dozen national and sub-national governments have created public Green Banks and Green Bank-like entities in recent years. A Green Bank is a publicly capitalized entity established specifically to facilitate private investment into domestic low carbon, climate resilient (LCR) infrastructure and other green sectors such as water and waste management. These dedicated green investment entities have been established at the national level (Australia, Japan, Malaysia, Switzerland, United Kingdom), state level (California, Connecticut, Hawaii, New Jersey, New York and Rhode Island in the United States), county level (Montgomery County, Maryland, United States) and city level (Masdar, United Arab Emirates).

While Green Banks differ in name, scope and approach, they generally share the following core characteristics: a mandate focusing mainly on mobilizing private LCR investment using interventions to mitigate risks and enable transactions; innovative transaction structures and market expertise; independent authority and a degree of latitude to design and implement interventions; and a focus on cost-effectiveness and performance.  “Green Bank-like entities” refers to organizations that have a mandate to leverage private finance for LCR infrastructure investment but which may not possess all of the core characteristics of GIBs and may pursue other activities or use other approaches.

Based on their unique national and local contexts, governments tailor Green Banks to meet specific needs. Green Banks and Green Bank-like entities have diverse rationales and goals, including meeting ambitious emissions targets, mobilizing private capital, lowering the cost of capital, lowering energy costs, developing green technology markets, supporting local community development and creating jobs. These goals are reflected in the range of metrics Green Banks use to measure and track their performance and demonstrate accountability: emissions saved, job creation, leverage ratios (i.e. private investment mobilized per unit of GIB public spending) and, in some cases, rate of return.