2020 funding preview: Looking at donors' pipelines for the coming year

As the year draws to a close, Devex takes a look at the development-funding data we have collected over the course of 2019 to understand the trends. We also look at donors’ current pipelines to better understand what we can expect from them in 2020 and explain how you can use Devex’s early funding intelligence tools to find out more. Looking back at development funding in 2019 In 2019, we published over 40,000 development-funding opportunities from nearly 500 donors on our Funding Platform, including 36,000 tenders, 4,000 grants, and about 500 “open opportunities.” Our tenders publishing peaked at 3,730 opportunities in October, while grants publishing peaked at 555 opportunities in January. The bulk of tender opportunities came from large, multilateral organizations — in 2019, half came from the United Nations institutions and the World Bank alone. They were followed by the regional multilaterals — the African Development Bank, Asian Development Bank, and Inter-American Development Bank. Most grants, on the other hand, came from the U.S. government’s health-focused institutions, including the Department of Health and Human Services, National Institutes of Health, and the Centers for Disease Control and Prevention. The top five donors, geographies, and sectors for tenders and grants we published in 2019 can be seen below. The 2020 donor pipeline Since early intelligence on what donor agencies are planning is key for business developers, resource-mobilization specialists, strategy officers and fundraisers, we also decided to look ahead at the pipelines of projects, loans, and grants for those donors that make such information public. Keep reading to access Devex’s dashboards and tools to help members use this early information. USAID and MCC At a little over $17.3 billion in obligations, USAID broke another record in acquisition and assistance mechanisms in fiscal year 2019. Looking ahead to fiscal year 2020 as of Dec. 17, there were 226 opportunities in USAID’s Business Forecast, including 42 for Washington-procured opportunities and 184 procured by overseas missions. Since USAID quotes pipeline-opportunity budgets as ranges, the full pipeline has a maximum worth of approximately $11.8 billion and a minimum of $5.4 billion. About half of these are new opportunities “not previously forecasted,” including two new “indefinite delivery, indefinite quantity” — or IDIQ — opportunities: one in Colombia and the massive, seven-year Global Architect-Engineer Services III IDIQ. The Millennium Challenge Corporation’s current Business Forecast includes 198 forecast opportunities worth between $106 million and $409 million. Again, about half of these are new, with substantial opportunities in transport and land governance in Sri Lanka, energy in Kosovo, WASH in Mongolia, and multisector opportunities in Lesotho, Malawi, Nepal, and Timor-Leste. Additionally, MCC announced a new compact with Mozambique and a new threshold agreement with Kenya last week. Both countries had partnerships with MCC back in 2007 but have not had partnerships with the agency since then. UK Aid The U.K Department for International Development has in the last year started to share quarterly updates on the business opportunities in its pipeline. The last one was published in October and encompasses 49 opportunities, worth around £1.2 billion ($1.6 billion). Those that were expected to approach to market in the last quarter of 2019 — two health and nutrition programs in Bangladesh and one education program in Zimbabwe — have not yet been published and will most likely be tendered in early 2020. Up to 17 additional opportunities are supposed to approach to market in the first quarter of 2020. Most of the other big aid-spending departments of the U.K. government have not published an official document or dataset with the pipeline of contracts and grants they will manage in 2020. DEVCO The European Commission’s Directorate-General for International Cooperation and Development, soon to be called Directorate-General for International Partnerships under the leadership of new commissioner Jutta Urpilainen, has approved several new 2019 Annual Action Programs, or AAPs, these past weeks. The AAPs are operational documents that specify how projects will be implemented and through which aid modality their budgets will be disbursed. Among those approved in November and December, there are two under the Global Public Goods and Challenges thematic program and one for the Pan-Africa program, both of which belong to the Development Cooperation Instrument. There are also two that fall under the European Development Fund: the 2019 AAP for Uganda and the AAP for the Pacific region. But all this jargon around European-aid mechanisms might be simplified next year, as the EU bloc is debating whether to merge all the funding instruments into one. The last 2019 contribution to the environment and climate change AAP accounts for €58.5 million ($65 million). Within this bucket of programs, there are eight specific ones that fall under Global Climate Change Alliance Plus, the EU climate flagship initiative. Most of them are set to be managed by trusted institutions like U.N. agencies or European bilateral development agencies, but in a few cases — Timor-Leste and Chad — there will be technical assistances procured in the first half of 2020. As part of a different program, the European Commission has also approved €194 million to develop clean and efficient energy solutions to be provided through different funding mechanisms, including technical assistance under the European Fund for Sustainable Development. Half the budget will come from 2019’s EU budget and the other half from 2020’s. Lastly, without knowing yet how the funds will be allocated or disbursed, the EU last week approved additional funding worth €275 million from the Emergency Trust Fund for Africa, or EUTF, for programs in the Sahel, the Lake Chad region, and the Horn of Africa, aiming to support regional stability and local communities and assist migrants and refugees. This new funding brings the total of the EUTF, created back in 2015, to €4.4 billion. The World Bank The World Bank maintains a very large pipeline, usually with nearly 1,000 projects worth over $100 billion in total — though not everything is eventually approved by the bank’s board. Over the course of 2019, this already massive pipeline grew even more — from $113 billion in January to $130 billion as of October. Over that time period, several country pipelines increased by more than $1 billion, including those for the Democratic Republic of the Congo, Turkey, Egypt, Indonesia, Jordan, the Philippines, and Ethiopia. At the same time, the country pipelines for India and Nigeria also decreased by over $1 billion, with Pakistan and Cameroon decreasing by nearly as much. Changing sector prioritizations are also interesting, with large increases in the pipelines for transport and education, and decreases in agriculture and governance. However, note that these sector groupings are subjective; since sector names have changed, split, and joined over time, the data here has been manually grouped by the Devex team. The Asian Development Bank ADB is somewhat unique in that it releases pipeline documents less frequently, but with longer, forward-looking timespans. Their Country Operations Business Plans, or COBPs, are three-year plans released once per year, with one for each country and occasionally with regional plans, such as for the smaller Pacific island nations. As of mid-December, all the COBPs for the planning period 2020 to 2022 have been released except those for Laos, China, and Mongolia. Transport projects appear to be in focus for ADB going into 2020. Next year, three multibillion-dollar transport projects are slated to begin, including two in India and one in the Philippines. Many other smaller transport projects in India are also targeted for 2020, as well as energy programs in Pakistan, Uzbekistan, Indonesia, and India again. In total, $33 billion in projects are to begin procurement in 2020, not yet accounting for Laos, China, or Mongolia. Interestingly, the country pipeline for the Philippines grew in particular this year. In 2018, the three-year budget for projects in the country was $4.86 billion. This increased to $10.21 billion in 2019 and to $15.71 billion for 2020. Meanwhile, the budget for China fell from $35 billion in 2018 to $10.5 billion in 2019. It will be interesting to see whether that trend continues when the 2020 to 2022 China COBP is released. The Inter-American Development Bank As of November, the IADB pipeline contains 95 projects worth an estimated total of $7.2 billion. Over the course of 2019, there were a few important trends in the pipeline. First, the average project size shrunk from $101 million to $76 million, though the number of pipeline projects increased. Second, there were large changes in sector prioritization. Public sector management had long been the dominant sector in the pipeline. But from June to August this year, it shrank and was overtaken by the finance, WASH, and transport sectors. Going into 2020, there is a large pipeline for infrastructure in Argentina, focused on transport, WASH, and energy. There are also some new public sector management opportunities, including one in Bolivia and a large one in Pernambuco state in Brazil. There are also several programs marked to exit the pipeline, meaning they will likely move to procurement in early 2020. These include programs focused on the pension system, agricultural finance, and tertiary education in Paraguay, economic diversification in Panama, programs in WASH and social sector reform in Honduras, and finally a public security program in Chile. Emerging development finance actors There is no doubt that to unlock the trillions of dollars needed to achieve the Sustainable Development Goals in the upcoming decade, public and private sector capital will need to increase substantially in volume and speed. In line with this, Devex is analyzing the rise of development finance institutions and new impact-based finance mechanisms — from derisking guarantees to development-impact bonds. Philanthropy is one of the other big bets in development finance for the next decade. From well-established organizations such as the Gates Foundation to newer ones like the Chan Zuckerberg Initiative, Devex keeps expanding our coverage of specific grants and partnership opportunities driven by over 230 sources of foundation funding that we are currently tracking. Join us in 2020 as we continue to track the funding and partnerships shaping the innovative development finance space, the disruption potential of philanthropic giving, and essential public development aid flows. For access to funding analysis, the latest funding updates, and opportunities from over 780 sources — in addition to exclusive Devex Pro news content — please get in touch to learn more about a Devex Funding membership.