Bilateral development finance institutions, or DFIs, like the U.K.’s British International Investment, the U.S. International Development Finance Corporation, or DFC, and Norway’s Norfund must make better use of their capital. They can do much more to alleviate the ballooning SDG and green financing gaps caused by recent multiple overlapping crises. According to our new research and calculations made exclusively for Devex, at a conservative estimate, these three DFIs could have mobilized an extra $13 billion for investment in 2020 alone.
Development aid is of course in retreat in many donor countries. The U.K. has cut £3 billion in aid spending in 2021 and traditionally generous Scandinavian donors such as Sweden and Norway are also cutting theirs. But the need for additional funds is urgent and this prompted us to look at what larger contribution DFIs could make, using the capital they already have.
Recently the World Bank and other multilateral development banks have been under pressure to stretch their resources and reform (and the World Bank has recently presented a road map for change to its shareholders). In the same vein, bilateral DFIs can also surely do more.
About the authors
Samantha Attridge
Samantha Attridge is a senior research fellow in the Development and Public Finance program at global affairs think tank ODI (formerly the Overseas Development Institute) and ODI's lead specialist on DFIs and the use of public money to mobilize private capital.
Christian Novak
Christian Novak is a professor of practice at McGill University’s Institute for the Study of International Development. He focuses on development finance, particularly on the effective use of public and private capital to help achieve the Sustainable Development Goals.
