Swiss banks and the government will raise $1 billion to develop new projects.

Switzerland has launched a new public-private campaign to raise up to 1 billion Swiss francs ($1.09 billion) for social and environmental projects in developing countries.

It is hoped that pooling the money and investment know-how of banks and government agencies will attract private investors to projects in emerging markets.

Blended finance initiatives, like this one, are increasingly considered as significant to help finance social programs, including health and education, or support innovative energy and infrastructure projects.

Switzerland's two largest banks, UBS (UBSG.S) and Credit Suisse (CSGN.S), will participate in the new initiative together with the Swiss State Secretariat for Economic Affairs (SECO) and its Development and Cooperation Agency (SDC).

Switzerland is home to one of the UN's two international headquarters, as well as a leading financial center for private wealth management.

Many private sector investors consider projects in emerging markets too risky. So-called blended finance initiatives combine public or philanthropic investors with the private sector to reduce risks and fears.

A new Swiss initiative will deal with issues such as assuming the first part of any losses or providing guarantees by the public investor to minimize the risks of the private investor.

The Swiss government is allocating 19.5 million francs for public and philanthropic funding, the program initiative hopes to raise 100 million francs, and the UBS Optimus Foundation will contribute another 5 million francs.

They are discussing the possibility of attracting other sponsors from development banks and foundations to companies and financial institutions.

Both Credit Suisse and UBS said they plan to use their international networks of wealthy private and institutional investors, help vet projects and cover the initiative's operating costs.

1 US dollar = 0.9197 Swiss franc.