Sovereign thematic bonds are useful financing tools to not only raise much-needed capital but also align bond proceeds with sustainable development priorities. They can serve as an entry point to systematically integrate SDG impact measurement and management.
Yet only a small fraction of the sovereign debt issuances is thematically aligned to the SDGs. In particular, the low- and lower-middle-income countries most in need of development capital are largely unable to access the thematic bond market, which presents both underlying challenges and a significant
opportunity.
In the context of integrated national financing frameworks (INFFs), countries are developing comprehensive financing strategies to ensure the long-term sustainability of sovereign debt by enhancing domestic revenue mobilization, the effectiveness and efficiency of expenditure and its alignment with sustainable development priorities.
An INFF is a critical framework for countries to finance their needs sustainably over the long term and enhance the SDG impact of each dollar borrowed and spent.