The Global Trust Fund (GTF) on Sustainable Finance Instruments was established as a joint effort by the Government of the Grand Duchy of Luxembourg and the Global Green Growth Institute (GGGI) as an innovative approach to mobilize capital markets to close the NDC and SDG financing gap. The project is considered a novel approach to accelerate the adoption of sustainable financial instruments, like thematic bonds, in developing countries.

To do this, GTF supports its country-level sustainable finance partners through four strategic objectives:

GGGI acts as a thematic bond structuring agent assisting public and private sector issuers to access the thematic bond market, providing pre- and post- issuance support, prioritizing first time issuers:

→ Thematic Bond Framework

→ Second Party Opinion

→ Due Diligence and Disclosure

→ Marketing Material

→ Roadshow

→ Post-transaction Reporting

Altogether, GTF is working to achieve goals that cut across the strengthening of 24 countries sustainable finance ecosystems and greener world. These goals include:

✓ USD 2.9 billion mobilized

✓ 23 financing frameworks developed

✓ 14 transactions executed

✓ 46 capacity building and workshops delivered

✓ 3k public and private representatives trained

How GFT Fits in the GGGI Vision for Finance Facilities

Capital markets offer significant potential to promote climate change mitigation and adaptation by directing investments toward low-carbon and resilient projects and initiatives. With an estimated global capitalization of USD 129.3 trillion, the bond market represents the main source of capital for governments and public and private financial institutions.

Through the Global Trust Fund on Sustainable Financial Instruments, GGGI acts as a Thematic Bond Structuring Agent assisting public and private sector issuers to access the thematic bond market. As a result, national and local governments, multilateral and national development banks, exchanges, and donors highly value GGGI’s expertise and seek its technical assistance to enhance their capacity and systems for mobilizing climate finance through thematic bond markets.

GTF is a key contributor to actualizing GGGI’s vision for Finance Facilities. With its cadre of sustainable finance experts at headquarters, regional and country-levels, the project supports its country partners through pre-issuance (the development of Thematic Bond Frameworks), transaction (SPO, due diligence, and disclosure), and post-issuance processes (monitoring, evaluation, third party reviews, and the production of annual impact reports and audits).

How Sustainable Finance Products Fits in with GGGI’s Vision and Mission

To fight climate change, emerging economies need to invest an estimated USD 4 billion in green infrastructure. As public funding is insufficient to achieve these goals, mobilizing significant private sector resources for climate action is crucial to limit the rise in global temperatures. The emerging but fast-growing thematic bond market can play an important role in developing countries.

Sustainable financial instrument includes thematic bonds like green, social and sustainability (GSS) bonds and sustainability-linked bonds. They are financial instruments issued by governments, municipalities or companies to finance projects that have a positive impact on the environment and society.

Since 2015, GGGI has mobilized USD 12.8 billion in Sustainable Finance. The Global Trust Fund on Sustainable Financial Instruments was formalized to meet the growing demand from governments, national development banks, exchanges and donors for GGGI technical assistance to engage with the green bond market. Since its implementation, GTF has grown to be a trusted and growing resource for capacity enhancement and systems strengthening.

GTF PULSE – Newsletter

GTF BROCHURE

GTF IN SRI LANKA – Infographic