A 2014 report from the United Nations estimated that there is a yearly gap of $2.5 trillion in funding for the achievement of the Sustainable Development Goals (SDGs). At a high rate of participation, $1.8 trillion per year could be invested by the private sector to bridge the gap. However, this high rate of participation will be difficult to achieve without adapted tools that facilitate private sector investment in the SDGs. Over the last few years, the development and impact finance sectors have developed numerous innovative investment instruments to attract both private and public investors. In addition to popular layered funds, a fund structure in which risks and rewards are differentiated by investor-type, various types of bonds instruments such as green bonds, social impact bonds, and project bonds have emerged. This short report aims to clarify and present the different bonds currently available on the market that can help solve the SDGs investment gap.
This note is based on work coordinated by the European Impact Investing Luxembourg initiative, in particular:
Adriana Balducci, Innpact:
Aurore de Halleux, Innpact:
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