International Climate Finance Accelerator Expands to Include Social Impact Finance

On Friday 19 July 2024, the Luxembourg Government announced, through Deputy Prime Minister and Minister for Development Cooperation and Humanitarian Affairs, Xavier Bettel, Minister of Finance, Gilles Roth, and Minister of the Environment, Climate and Biodiversity, Serge Wilmes, the expansion of the International Climate Finance Accelerator (ICFA) to include a new programme: the International Social Finance Accelerator (ISFA).

Established in 2018, the ICFA is a public-private partnership set up by twelve private entities of the Luxembourg financial sector, Luxembourg's Ministry of Finance and the Ministry of the Environment, Climate and Biodiversity. On Friday, the Ministry of Foreign and European Affairs, Defence, Development Cooperation and Foreign Trade joined the partnership, extending the programme's commitment to social impact finance, with a focus on economic development to promote sustainable economic growth, to reduce poverty and to improve living standards in the least developed countries.

The new combined accelerator, which will operate both the ICFA and ISFA brands, will support promising impact fund managers through their launch and initial operations, offering both financial support and technical assistance through personalised coaching and training workshops.

Minister Roth emphasised: "I am proud to extend our successful Climate Finance Accelerator and enrich it with a social finance acceleration programme. This dual focus underlines our dedication to 'go beyond green' and leverage our partnerships with and the expertise of the Luxembourg financial center to help direct financial flows towards achieving the Sustainable Development Goals."

Minister Bettel stated: "With its extensive inclusive finance ecosystem, Luxembourg is uniquely positioned to support and accelerate the emergence of social impact fund managers. In addition to our traditional blended finance investments, the establishment of a social acceleration programme will contribute to mobilising the private sector to improve living conditions and reduce poverty in developing countries."

Minister Wilmes added: "I am pleased to reaffirm the [environment] ministry's commitment to this initiative, which exemplifies Luxembourg's dedication to ambitious international climate finance and our drive to lead in impactful green, but also sustainable investments."

Moreover, Stephan Peters, CEO of the Accelerator, noted: "By empowering emerging fund managers in climate or social finance, we can mobilise capital to make a significant contribution to a more sustainable world. We look forward to continue advancing this mission with the government of Luxembourg and our private sector partners."

The environment and finance ministries will support one cohort per year, from 2024 to 2026, totalling twelve climate finance fund managers over this period. In parallel, the foreign and finance ministries will support one cohort annually, in 2025 and 2026, assisting eight social impact fund managers over this period.