Can MDBs/DFIs Really Build Markets?: A Deep Dive into Investing for Impact at the Market Level

A critical pillar of the MDB/DFI reform agenda involves strengthening their performance in mobilizing private finance for the SDGs, including climate-related investment. Three aspects of this challenge have received considerable attention: mobilizing more private finance in individual transactions, creating funding structures to enable private investment in portfolios of MDB/DFI assets, and transferring MDB/DFI portfolios, or their risks, to the private sector.

The broader market building impact of MDB/DFI investments has received much less attention, despite its importance for value for public money. How can MDBs find and choose investments that drive gains far beyond individual transactions? Do they have the tools and risk tolerance that enable them to finance innovations and first market movers; fill information gaps that distort risk assessment; spread new technologies, financial products, and business models; and drive replication? In this conversation, leading thought and practice leaders explore lessons learned so far and what is needed to strengthen performance.