Multilateral development banks (MDBs) and development finance institutions (DFIs) have mobilised $175 billion of private finance in 2019, an increase of 9 per cent over the previous year, a report on the activities of 27 institutions published today notes.
The report entitled “The Mobilization of Private Finance by Multilateral Development Banks and Development Finance Institutions 2019”, and the fourth in the series, is based on a common methodology that measures private investment in development projects for which MDBs and DFIs have provided financing.
The report notes that the reporting MDBs and DFIs mobilised $63.6 billion of private finance in operations in middle- and low-income countries including the $ 6.7 billion mobilised for low-income countries, a significant increase of 21 per cent over 2018.
The total mobilisation includes $20.1 billion in private direct mobilisation, an increase of 18 per cent over 2018 and a key priority of many MDBs while MDBs have collectively increased mobilisation of private finance by 7 per cent since reporting began in 2016.
These investments support global sustainable development goals by promoting inclusive and sustainable growth, fighting poverty and inequality, mitigating the effects of climate change, or achieving other development impacts.
The report shows that mobilisation of private investments is critical for development and greater mobilisation is consistent with greater reductions in poverty and key living standards. Going forward this approach will also be crucial in recovery efforts from the coronavirus pandemic.
Christian Kleboth, EBRD Director, Loan Syndications, said: “Overcoming the longer-term consequences of the Covid-19 crisis will require addressing fundamental questions of sustainable and inclusive development. MDBs will play a crucial role by providing sustainable public financing and delivering objective policy advice that draws on decades of experience. Very importantly, MDBs need to continue their focus on mobilising private capital in order to leverage their own investments. Moving beyond the crisis phase, we need to ensure we genuinely build back better.”
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