The union aims to raise more than €1bn ($1.3bn) in equity capital for its Inframed Fund. The fund is led by France’s Caisse de Depots, Italy’s Cassa depositi e prestiti, Morocco’s Caisse de Depot et de Gestion, and Cairo-based investment bank EFG-Hermes. The four institutions have already committed €400m.

The fund is also likely to co-operate with other partners from the Gulf.

The new structure represents a regional framework for public-private-partnerships which would aid the development of infrastructure across the region.

It will participate in financing energy efficiency, transportation, environmental and urban development projects.

The sponsors of the fund are also considering setting up a debt financing vehicle.

Institutions such as Agence Francaise de Developpement, Germany’s KFW Bankengruppe, the European Investment Bank and the Forum of Mediterranean Banks expressed their interest in such a vehicle.

A roadshow covering European and Arab countries will begin this year.

Meanwhile the World Bank announced at the meeting that it would allocate $750m from its Clean Technology Development Fund to finance solar projects in the region.

The Global Environment Facility said it could commit $50m to international water management schemes.

The Union for the Mediterranean was launched on 13 July 2008 under the leadership of Egyptian President Hosni Mubarak and French President Nicolas Sarkozy.