IFC, a member of the World Bank Group, and Luxembourg signed an agreement Tuesday that will support the creation of new markets for climate finance in emerging economies—by developing green-bond policies, training bankers and executives, and helping countries adopt the Green Bond Principles and other best practices.
The government of Luxembourg will provide €1 million to IFC’s Green Cornerstone Bond Fund Support Program, a technical assistance program managed by IFC to complement the Amundi Planet Emerging Green One Fund—the world’s largest targeted green bond fund focused on emerging markets.
Pierre Gramegna, Minister of Finance, said: "I'm delighted to see that the IFC chose Luxembourg as its strategic partner for the implementation of the Green Cornerstone Bond Fund Support Program. Building on the Luxembourg Stock Exchange’s expertise in the field of Green bond emission and structuring, this agreement will help to develop new Green bond markets in emerging countries. It is thus fully aligned with Luxembourg’s pledge to leverage its financial center in the fight against climate change."
"This support program builds on the foundations of IFC’s strong partnership and shared values with Luxembourg," said Karin Finkelston, IFC Vice President of Partnerships, Communication, and Outreach. "It will help bring best practices in climate finance to developing countries, where green bonds are critical to fighting climate change."
The Amundi Planet Emerging Green One fund, which closed in March with IFC as a key investor, is expected to significantly increase the scale and pace of climate finance in emerging markets by crowding in capital from investors. The fund is listed on the Luxembourg Stock Exchange.
"Some wonder why we have all teamed up for this project. The answer is simple: because the green financing markets needs to progress aggressively and therefore it requires leadership. Leadership in creativity, in innovation, leadership in triggering change in financial markets," said Robert Scharfe, CEO of the Luxembourg Stock Exchange.
Luxembourg and IFC have a long partnership. To date, Luxembourg has provided about $28 million of cumulative funding to support IFC’s advisory work on a global scale. In April, Luxembourg agreed to provide a further $8.65 million (€7 million) to IFC’s Advisory Services programs over the next four years.
Over the last decade, Luxembourg has taken the lead in Europe in the field of green finance, with a special focus on the bond market. The first ever green bond was listed in Luxembourg in 2007, and today the Luxembourg Green Exchange displays almost half of all listed green bonds worldwide.
IFC—a sister organization of the World Bank and member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work with more than 2,000 businesses worldwide, using our capital, expertise, and influence to create markets and opportunities in the toughest areas of the world. In FY17, we delivered a record $19.3 billion in long-term financing for developing countries, leveraging the power of the private sector to help end poverty and boost shared prosperity. For more information, visit www.ifc.org.
Press release by the Ministry of Finance