Emerging economies face major gaps in financing the Sustainable Development Goals (SDG). Local capital markets are a key instrument to help close these financing gaps by mobilizing long-term savings and private capital for long-term investments. The importance of capital markets for economic growth and development is well established in theory, but in practice, emerging economies have basic local capital markets and encounter significant challenges in reforming them. The proposed Facility applies innovative reform approaches to achieve its mission of mobilizing private financing towards financing SDG and climate change assets.

The Facility’s objective is to mobilize private financing for climate change and SDG investments by developing deep, accessible, efficient and stable domestic capital markets. To achieve this objective, the Facility applies a range of complementary and reinforcing instruments to ensure reforms are implemented and knowledge and skills are effectively transferred to stakeholders. The most important instrument is the support of demonstration projects paired with more traditional technical assistance on enhancing framework conditions.

Outcome 1: Ecosystem for the supply of SDG/Climate Change investable assets created

Outcome 2: Increased role of institutional investors as financiers of SDG/Climate Change assets

Outcome 3: Competitive and innovative non-bank financing ecosystem conducive to increased private sector leverage

Outcome 4: More transparent and efficient government financing and liquidity management

Risultati principali attesi:  

Component 1 – Upstream reforms to support the supply of investable assets linked to Climate Change and SDGs

Component 2 – Instrument design and demonstration projects

Component 3 – Strengthening long-term investor demand

Component 4 – Digital Financial Services for more efficient, competitive and inclusive financial disintermediation

Component 5 – Market architecture, infrastructure and regulations are enhanced

Component 6 – Government debt markets functioning improved

Risultati fasi precedenti:  

A mid-term evaluation of the first phase found the Facility to be highly relevant, and its effectiveness, efficiency and sustainability as satisfactory . The relevance assessment reflects the Facility’s targeting a key need for participating countries and its consistency with SECO priorities. Its country action plans have been well aligned with counterpart needs as expressed at the time of their drafting. The effectiveness rating reflects the Programme’s high levels of achievement of logframe-defined outputs and outcomes, including the delivery of complex, innovative transactions- high quality of outputs- strong capacity built at counterpart institutions- and an overall results-oriented and participative approach to TA delivery.