Integrated national financing frameworks and sovereign thematic bonds

This brief was developed to inform the discussion during the 2023 Financing For Development Forum Side Event, SDG sovereign bonds as an instrument to advance alignment and financing for the SDGs. Countries and investors in joint action.

This brief explores the role of sovereign thematic bonds in addressing the SDG financing gap in developing countries. As the financing gap has widened due to the pandemic, there is an urgent need to find innovative ways to mobilize private capital for sustainable development. Sovereign thematic bonds present a potential solution, enabling access to private capital while ensuring that proceeds contribute to sustainable development impact. Sovereign thematic bonds can serve as an entry point to integrating sustainability within broader public financial management.

This brief provides an overview of the current state of sovereign thematic bond issuance, while emphasizing the importance of integrated financing policies and national financing frameworks to ensure debt sustainability and enhance SDG impact per dollar borrowed and spent.

This brief can help policymakers, finance professionals, and development practitioners better understand the opportunities and challenges associated with sovereign thematic bonds and INFFs. The brief introduces real-world examples of countries that have advanced in sovereign SDG bonds, such as Uzbekistan, Mexico, Indonesia, and Uruguay, and the support provided by UNDP to facilitate these issuances.

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