The French Development Agency (AFD), the Asian Development Bank (ADB), the African Development Bank (AfDB), the European Investment Bank (EIB), the Green Climate Fund (GFC), the Environment Fund Global Environment (GEF), the Inter-American Development Bank (IDB), and the United States International Development Finance Corporation (DFC), recently announced at COP28, the launch of a global effort to cooperate on boosting financial instruments for sustainable climate and nature-linked sovereign financing.

This is a new approach in the use of different financial solutions for mobilizing private sector capital, through credit enhancement instruments such as debt swaps, green or sustainability-linked bonds, full or partial credit guarantees, credit insurance and political risk insurance (PRI).

This group of international organizations and development financial institutions have also announced the formation of a task force, led by the IDB and the DFC, that will help facilitate the group’s mission. The task force plans to monitor the group’s progress towards its stated goal of increasing the effectiveness, efficiency, affordability, accessibility, availability and scalability of financial instruments based on credit enhancement elements at the level of facility, product and process.