Everyone agrees that private sector finance is critically needed to address global development challenges, but mobilizing this money is difficult. We see opportunities for quick wins that can enable multilateral development banks and development finance institutions to increase private capital mobilization while preserving their triple-A ratings, with little or no need for additional capital.
To crowd in more private capital, especially for climate change mitigation in lower-income and emerging countries, MDBs, DFIs, and the private sector must work together differently and with purpose to address capital constraints and redesign governance, products, and incentive structures.
The world faces overlapping crises — the repercussions of the COVID-19 pandemic, the war in Ukraine, and the climate crisis — against a backdrop of high inflation and slowing growth. Central banks and ministries of finance in both high- and lower-income economies cannot provide the scale of financing needed to address these crises.