The new US International Development Finance Corporation (USDFC) will be considerably larger than its predecessor, and it will also be more focused on low and lower middle income countries. It will have new tools to deliver but face expanded competition.
There is a significant and ongoing ramp-up in support for explicitly subsidized official development finance to the private sector around the world, but its role remains poorly defined. Lessons from the aid effectiveness literature as a whole and principles on effective use of aid suggest the need for approaches that do not merely finance the marginal private investment.
Marginal, Not Transformational: Development Finance Institutions and the Sustainable Development Goals
Development finance institutions have positioned themselves as key agencies to help the world meet the Sustainable Development Goals. It is doubtful that they can deliver. This paper outlines the challenges facing DFIs in achieving (anywhere near) such an expansion in their impact, particularly in infrastructure and particularly in the poorest countries.
Inside the Portfolio of the International Finance Corporation: Does IFC Do Enough in Low-Income Countries?
IFC’s portfolio is not focused where it could make the most difference. Low income countries are where IFC has the scale to make a considerable difference to development outcomes. While an excessive portfolio shift might imperil IFC’s credit rating, the evidence suggests that there is considerable scope for increasing commitments to low income countries without significant impact to IFC’s credit scores.
Development Finance Institutions (DFIs)—which provide financing to private investors in developing economies—have seen rapid expansion over the past few years. This paper describes and analyses a new dataset covering the five largest bilateral DFIs alongside the IFC which includes project amounts, standardized sectors, instruments, and countries. The aim is to establish the size and scope of DFIs and to compare and contrast them with the IFC.
Finding Cash for Infrastructure in Addis: Blending, Lending and Guarantees in Finance for Development
The total scale of incremental investment requirements in infrastructure in developing countries has been estimated at around USD 1 trillion a year, with a range of related studies suggesting numbers between $815 billion to $1.3 trillion. While all such numbers are open to considerable debate, and were not designed to measure the cost of delivering the specific SDG infrastructure targets, they suggest the likely scale of the financing challenge for an SDG agenda which includes universal coverage to adequate housing, water, sanitation, modern energy and communications technologies.