When we heard about an invite-only lunch hosted by the Bill & Melinda Gates Foundation and executive search firm Russell Reynolds Associates in Brussels this June to discuss a new humanitarian financing initiative, we needed to find out more …
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That led us to Simon Meldrum, co-founder of the Humanitarian Finance Forum and a former banker with the Royal Bank of Scotland and Merrill Lynch. The idea behind the forum, which was conceived in 2019, is to host meetings between humanitarian subject specialists and financial experts who know how to issue a bond, for instance.
Meldrum, who works on private sector and innovative finance at the International Federation of Red Cross and Red Crescent Societies, says that success for the forum could come simply through dissuading humanitarian organizations from plunging prematurely into innovative financing.
As he put it, “giving people the advice of ‘look, here's the things that you need to put in place before you start down this road.’ And saving them money, [saying] ‘don't waste your time until you're here.’”
Meldrum says they’re hoping the initiative follows the blueprint set by green bonds — which in 15 years have become a multibillion-dollar market — and less like social impact bonds, which he’s less enamored of due to their seeming difficulty scaling up.
The forum is free for NGOs and charities, while philanthropic, private sector and humanitarian partners contribute a mixture of financial and nonfinancial support. We’re told a detailed strategic plan is in the works with incoming advisory board members this fall.
Read: The bankers trying to crack humanitarian financing (Pro)
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Competing demands
The European Investment Bank is ramping up investments in Ukraine and is already financing reconstruction efforts, officials tell Adva. While EIB is urging other financiers to follow suit, it is also contending with skepticism from EIB partner countries, particularly African nations that worry their needs will be overlooked.
“We urgently need to find a way to convince our partners in the developing world that we are doing something serious, justified, and reasonable,” EIB President Werner Hoyer told Adva in a recent interview.
EIB Global, the bank’s new branch focused on activities outside the European Union, is leading the charge. It has not reduced financing to Africa and recently got approval for €6 billion (about $6 billion) for investments to address food and energy security in the coming years, EIB said.
Read more: EIB ramps up Ukraine work, faces questions about global commitments
Bailout boost
Last week Zambia reached a long-awaited deal with the International Monetary Fund on a $1.3 billion bailout, our colleague Shabtai Gold reports. The country, which was the first African nation to default during the COVID-19 pandemic, can now begin to rebuild its economy. The Zambian finance minister promised to increase social spending programs and said that moving forward, assistance will be better targeted.
Zambia, which has racked up more than $30 billion in debt, has agreed to seek extensions and “haircuts” from lenders. The IMF program lasts 38 months at zero-interest rate, and no repayments will be due for five years.
We’ve had our eye on this deal because it is the first under the G-20 common framework for debt relief, and could offer insights into how IMF will deal with mounting debt distress worldwide.
Read more: Zambia hails IMF debt deal as it promises a sustainable path ahead
Background reading: A deep dive into how the debt crisis got so bad and how to make it better.
What ESG can be
The environmental, social, and governance — or ESG — framework was created to help companies manage risks and to incentivize them to contribute to positive social and environmental impacts. On both counts, it has fallen short, Sophie Sirtaine, CEO of the Consultative Group to Assist the Poor writes in an op-ed for Devex.
What’s needed now is “an integrated approach for sustainable finance that incorporates ambitious yet feasible ESG approaches, thus realizing the potential for ESG to drive positive social impacts while simultaneously achieving economic and climate objectives,” she writes.
Opinion: The underexploited potential of the ESG framework
ICYMI: Last month, in an edition of Invested, Adva broke down the backlash against the ESG framework — including investigations into major financial institutions and questions about the framework’s authenticity, veracity, and comparability — and explored the way forward for ESG investing.
What we’re reading
Biblical ETF provider renounces ESG labels in war with ‘liberal activists.’ [Financial Times]
Tracking recycled SDRs: More on the hunt for bigfoot. [Center for Global Development]
With a potential recession on the horizon, development organizations are already experiencing ‘complete financial turmoil.’ [Devex Pro]
About the authors
Vince Chadwickvchadw
Vince Chadwick is a contributing reporter at Devex. A law graduate from Melbourne, Australia, he was social affairs reporter for The Age newspaper, before covering breaking news, the arts, and public policy across Europe, including as a reporter and editor at POLITICO Europe. He was long-listed for International Journalist of the Year at the 2023 One World Media Awards.
Adva Saldinger@AdvaSal
Adva Saldinger is a Senior Reporter at Devex where she covers development finance, as well as U.S. foreign aid policy. Adva explores the role the private sector and private capital play in development and authors the weekly Devex Invested newsletter bringing the latest news on the role of business and finance in addressing global challenges. A journalist with more than 10 years of experience, she has worked at several newspapers in the U.S. and lived in both Ghana and South Africa.
