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Development banks mobilise US$175 billion of private finance in 2019

Multilateral development banks (MDBs) and development finance institutions (DFIs) have mobilized some US$175 billion of private finance in 2019, an increase of 9 percent over the previous year, a new report on the activities of 27 institutions finds.

US dollars

Multilateral development banks (MDBs) and development finance institutions (DFIs) have mobilized some US$175 billion of private finance in 2019, an increase of 9 percent over the previous year, a new report on the activities of 27 institutions finds.

The report “Mobilization of Private Finance by Multilateral Development Banks and Development Finance Institutions” was prepared by a group of multilateral development banks (MDBs), collectively known as the “MDB Task Force on Mobilization,” composed of the African Development Bank (AfDB), the Asian Development Bank (ADB), the Asian Infrastructure Investment Bank (AIIB), the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), the Islamic Corporation for the Development of the Private Sector (ICD), the Inter-American Development Bank (IDB) and IDB Invest, the International Finance Corporation (IFC), the Islamic Development Bank (IsDB), the Multilateral Investment Guarantee Agency (MIGA), the New Development Bank (NDB), and the World Bank (WB).

Based on a common methodology, the report measures private investment in development projects for which MDBs and DFIs have provided financing. The fourth of a series the report also finds:

  • The reporting MDBs and DFIs mobilized US$63.6 billion of private finance in operations in middle- and low-income countries;
  • This figure includes US$6.7 billion mobilized for low-income countries, a significant increase of 21 percent over 2018;
  • The total mobilization includes US$20.1 billion in private direct mobilization, an increase of 18 percent over 2018, and a key priority of many MDBs;
  • Since reporting began in 2016, MDBs have collectively increased mobilization of private finance by 7 percent.

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 mobilization of private investments is critical for development and greater mobilization 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.

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 mobilizing private capital in order to leverage their own investments. Moving beyond the crisis phase, we need to ensure we genuinely build back better, commented Christian Kleboth, EBRD Director, Loan Syndications.

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