The Grand Duchy of Luxembourg, through its Minister for Development Cooperation and Humanitarian Affairs, Xavier Bettel, Minister of Finance, Gilles Roth, and Minister of the Environment, Climate and Biodiversity, Serge Wilmes, today announced the expansion of the International Climate Finance Accelerator (ICFA) to include a new programme: the International Social Finance Accelerator (ISFA).
Established in 2018, the ICFA is a public-private partnership set up by twelve private entities of the Luxembourg financial sector, the Luxembourg Ministry of Finance (MFIN) and the Ministry of the Environment, Climate and Biodiversity (MECB). Today, the Ministry of Foreign and European Affairs, Defence, Development Cooperation and Foreign Trade (MFA) joined the partnership, extending the programme's commitment to social impact finance, with a focus on economic development to promote sustainable economic growth, to reduce poverty, and to improve living standards in the least developed countries.
The new combined Accelerator, which will operate both the ICFA and ISFA brands, will support promising impact fund managers through their launch and initial operations, offering both financial support and technical assistance through personalised coaching and training workshops.
Gilles Roth emphasised: "I am proud to extend our successful Climate Finance Accelerator and enrich it with a social finance acceleration programme. This dual focus underlines our dedication to 'go beyond green' and leverage our partnerships with and the expertise of the Luxembourg financial center to help direct financial flows towards achieving the Sustainable Development Goals."
Xavier Bettel stated: "With its extensive inclusive finance ecosystem, Luxembourg is uniquely positioned to support and accelerate the emergence of social impact fund managers. In addition to our traditional blended finance investments, the establishment of a social acceleration programme will contribute to mobilising the private sector to improve living conditions and reduce poverty in developing countries."
Serge Wilmes mentioned: "I am pleased to reaffirm the Ministry's commitment to this initiative, which exemplifies Luxembourg's dedication to ambitious international climate finance and our drive to lead in impactful green, but also sustainable investments."
Stephan Peters, CEO of the Accelerator, acknowledged: "By empowering emerging fund managers in climate or social finance, we can mobilise capital to make a significant contribution to a more sustainable world. We look forward to continue advancing this mission with the Government of Luxembourg and our private sector partners."
The MECB and the MFIN will support one cohort per year, from 2024 to 2026, totalling twelve climate finance fund managers over this period. In parallel, the MFA and the MFIN will support one cohort annually, in 2025 and 2026, assisting eight social impact fund managers over this period.
About:
The International Climate Finance Accelerator (ICFA) is an independent non-profit association, set up as a public-private partnership in 2018 under the Luxembourg Climate Finance Strategy. The ICFA members are the Luxembourg Ministry of Finance and the Ministry of the Environment, Climate and Biodiversity, as well as 12 private entities of the Luxembourg financial services sector. The ICFA is a unique multi-year programme that accelerates emerging fund managers focusing on key areas within climate action. Selected fund managers receive access to financial support, trainings on a wide range of topics, an experienced coach, and other benefits.
The Directorate for Development Cooperation and Humanitarian Affairs (Ministry of Foreign and European Affairs, Defence, Development Cooperation and Foreign Trade) pursues the main objectives of contributing to the eradication of extreme poverty and of promoting economic, social and environmental sustainability. Its interventions are closely aligned with the Agenda 2030 and aim to promote meaningful progress in achieving the SDGs. Luxembourg's focus lies on four interrelated thematic priorities: Improving access to quality basic social services, enhancing socio-economic integration of women and young people, promoting inclusive and sustainable growth and strengthening inclusive governance. In all of its activities, Luxembourg's Development Cooperation places a particular emphasis on implementing its three cross-cutting priorities, namely human rights, gender equality and environmental sustainability.
The Ministry of Finance of the Grand Duchy of Luxembourg prepares and implements the budgetary, financial and fiscal policy of the State. In this capacity, the Ministry is also responsible for the public finances and the preparation of the budget. In addition, it defines the policy with regard to the financial sector, and is responsible for external relations with the various international financial institutions. Within the Ministry's mandate falls the development of the financial centre, including new and emerging areas such as Sustainable Finance and Financial Technologies. A large number of administrations are attached to the Ministry, such as the Luxembourg Inland Revenue and the Customs and Excise Agency.
The Ministry of the Environment, Climate and Biodiversity coordinates Luxembourg's general policies in the fields of environment, water, climate and sustainable development. The MECB has committed a budget of € 220 million specifically dedicated to climate action in developing countries for the period 2021-2025, through its Climate and Energy Fund. In addition to priority action areas such as "natural capital, biodiversity, forestry and land use", "resource efficiency and waste management", "clean air and water resources", "community-based adaptation and resilience", "climate change induced migration" Luxembourg's International Climate Finance (ICF) Strategy puts a particular focus on the "leveraging and mainstreaming of climate and sustainable finance". Luxembourg's ICF is additional to the country's official development assistance and makes Luxembourg one of the largest per capita donors of international climate finance.
Press release by the Ministry of Finance / Ministry of the Environment, Climate and Biodiversity / Ministry of Foreign and European Affairs, Defence, Development Cooperation and Foreign Trade / Directorate for Development Cooperation and Humanitarian Affairs