Development finance needs to be bolder

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Development-finance institutions are yet to show their model can meet ambitions in the world’s poorest places

This grand vision explains a recent rush of money into bilateralInternational Development Finance Corporation , with an investment limit of $60bn, twice that of its predecessor. The year before, Canada launched its first. In Europe the combined portfolio of the 15 biggest institutions has doubled in a decade, to €48bn by the end of 2021.

In practice, they often look for cheap co-financing from donor agencies that give grants or concessional loans, in order “to take the risk off the table” by making the firms involved less likely to fail, says Conor Savoy of the Centre for Strategic and International Studies, a think-tank. Philippe Valahu of the Private Infrastructure Development Group says his donor-backed fund, which focuses on Africa and Asia, has taken on projects thatOne issue is where to spend.

 

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