The Sustainable Finance Facility

The Sustainable Finance Facility (SFF) helps countries with emerging financial markets and strong growth prospects to build the foundations for attracting private investment. The program, funded by Switzerland’s State Secretariat for Economic Affairs (SECO), works with governments to improve financial market infrastructure, regulatory frameworks, and other systems. By supporting real investment projects in areas like infrastructure, housing, and business development, the program demonstrates that these reforms can attract much-needed capital. As a result, thriving capital markets allow countries to access private-sector finances for long-term investments in vital sectors.

Governments in many countries are constrained by high public debt and foreign currency-denominated debt, which carries significant exchange rate risk. Development assistance is most effective when it promotes private capital flows via well-functioning markets. This support can channel domestic and international savings into productive, long-term investments. Capital markets also create incentives for governments to use debt productively, for instance by supporting well-planned and efficiently executed infrastructure projects. Vibrant capital markets also discourage unproductive investments that would not find market financing. Without these conditions, developing economies will struggle to finance vital projects and their industries will fail to reach their full potential.