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Launch of the Green Cornerstone Bond Fund domiciled in Luxembourg

Published Friday April 21 2017

In the margins of the Spring Meetings of the World Bank Group and the International Monetary Fund, Luxembourg Finance Minister Pierre Gramegna participated in the launch, on 21 April 2017, of the Green Cornerstone Bond Fund from the International Finance Corporation (IFC), which is domiciled in Luxembourg.

The Fund is aimed at fighting global warming in Africa, Latin America, Eastern Europe and Central Asia. Its objective is to develop green finance in emerging markets, buying green bonds issued in these regions. The IFC has committed to investing up to $325m into the new Fund. In his speech at the launching ceremony, Minister Gramegna underlined the role of Europe in leading the fight against climate change and putting into effect the goals of the Paris agreement. He also stressed the role of the Luxembourg Stock Exchange and the “Luxembourg Green Exchange” in fostering green finance at the global level. “As a strategic partner of the Green Cornerstone Bond Fund, Luxembourg demonstrates its strength as a financial centre and accepts its responsibilities in the fight against climate change,” he said.

The Fund will initially target emerging market countries and banks that have a higher potential to issue green bonds, with the goal of being fully invested in green bonds within seven years. “This green bond fund will lower the risk for the private sector and attract new investors – essentially creating a market where there was none,” said IFC CEO Philippe Le Houérou. “We’ve already identified dozens of banks in many developing countries around the world that could be interested in this fund. It’s a win-win: supporting the green economy and deepening access to international markets for emerging market issuers.”