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.