We are far short of achieving the Sustainable Development Goals by 2030. Public and philanthropic institutions alone cannot fill the current $7 trillion annual financing gap — the private sector must step up. But what will incentivize the sector to do so, and how can the development sector ensure the funds are targeted to meet the SDGs?
Development finance institutions, or DFIs, can answer these questions — if they recognize how their potential to contribute has changed. Here are four ways DFIs can strengthen their ability to promote catalytic investment.
Concessional funds from donors are scarce and thus must be used fully and strategically to crowd in other types of capital. Currently, blended finance windows (i.e., money donors set aside for blended finance) are woefully underused — losing opportunities to draw in third-party capital to fill development needs.
About the authors
Joan Larrea
Joan Larrea is the CEO of Convergence and an expert in catalyzing investment in places that need it most. She has close to 30 years of experience in emerging markets investing, including at the defunct U.S. Overseas Private Investment Corporation (now the U.S. International Development Finance Corporation), the Global Environment Fund, and the International Finance Corporation. Since 2016, Joan’s leadership has driven Convergence to become a global independent authority for blended finance. As CEO, Joan ensures Convergence continues to grow the field of blended finance through its products and services and accelerates the flow of private capital into SDG projects across Africa, Asia, and Latin America.
Kusi Hornberger
Kusi Hornberger is a partner at Dalberg and author of the recently released book, “Scaling Impact: Finance and Investment for a Better World.”
