The initiative seeks to help stimulate investments in energy, water, waste management, transport, logistics and green buildings to benefit people and businesses in Bangladesh, Bhutan, India, Maldives, Nepal and Sri Lanka.
Under the name Accelerating Inclusive and Climate Adaptive Infrastructure in South Asia, the EU will implement the project over five years (2021-2026).
The International Finance Corporation (IFC) plan is an economic relief for the region, as the impact of Covid-19 on such ventures was widespread and severe.
Infrastructure investment commitments with private participation in 2020 were reduced by 52 percent, compared to 2019 levels.
According to IFC regional director Hector Gomez, South Asian countries can unlock more than $3 billion in climate-smart investment opportunities.
Attracting private capital for such infrastructure in a sustainable and inclusive manner will be critical to the post-Covid-19 recovery, he said.
The program will also support the development of climate-smart programs in agriculture, manufacturing, tourism, health and education while focusing on key issues such as cities, gender and green finance.
It will also support capacity building for the private and government sectors to improve their ability to design, structure and implement such projects.