7-8 JUNE 2017 / Tour & Taxis / Brussels

New frontiers in investment for impact

New frontiers in investment for impact

Inclusive market solutions and innovative financing instruments to support local and low-carbon economies and implement the SDGs.

EDD17 - Replay - New frontiers in investment for impact

auditorium
A2
Thursday, June 8, 2017 -
09:00 to 10:30

Key points

  • On current trends official development assistance (ODA) is not enough to ensure the United Nations Sustainable Development Goals (SDGs) are met.
     
  • ODA should serve as a catalyst for private sector investment by helping reduce investment risk.
     
  • So-called ‘blending’ offers one way of leveraging grants and ODA.
     
  • All of the SDGs are business opportunities for the private sector.

Synopsis

Overseas development assistance (ODA) will not be enough to ensure that global development targets, such as the United Nations’ Sustainable Development Goals (SDGs), are met. Overall ODA stands at only around half of the international target of 0.7% of the gross national income of donor countries. But it can serve as a catalyst to attract other funding and investment, notably from the private sector, by helping reduce the perception of risk surrounding international investment in poorer countries. 

The good news that the ODA trend is improving in many parts of the European Union. The EU is also developing instruments to ensure that more can be achieved with the ODA available. One such method is “blending”, which combines grants with private sector funding. Asked to guess the multiplication effect of blending, participants correctly put it at 20 times; each US dollar of ODA can attract $20 of private-sector investment. An example is the EU-African Development Bank “Boost Africa” project, which aims to create jobs for young people.

The European Union is launching the European External Investment Plan to mobilise resources for Africa and countries bordering the EU to meet the SDGs. It has three pillars, with the first involving blending. The second pillar concerns technical assistance and the third focuses on creating conducive local environments for investment, including relevant legislation and anti-corruption measures.

The plan aims to invest in priority sectors for meeting the SDGs, as well as challenges such as climate change and digitilisation. Public investment policies in education and health are essential and will continue to be supported by ODA. But it is important that measurements are available to assess the efficiency of these investments and indicate where improvements can be made.

Lack of information about potential beneficiaries of foreign investment can be a problem. It is not always easy to find the right entrepreneur with the right ideas and track record. Investors may be interested but they are cautious.

Each of the SDGs offers a business opportunity and can help create jobs, particularly for the young. But reacting successfully to these opportunities will require a change in mindset among development organisations, investors and non-governmental organisations (NGOs), one panellist said. Investments need to look more to the longer term and be inclusive, reaching out to the poorer sections of society and particularly women.

The Middle East has the highest level of youth unemployment in the world. This has become a national security issue for the region. It also has the highest level of unemployment among women. Research shows that involving women in the economy more effectively can boost output by over 33 %. But governments cannot bring about the needed changes; only the private sector has the capacity to react fast enough to the challenges. 

Insight

ODA must support sustainable business practices; it must promote ‘green’ economies.

Organised by

  • Moderator
    Shada Islam
    Director of Policy
    Friends of Europe
  • Nomindari Enkhtur
    EDD Young Leader, Mongolia
  • Ambroise Fayolle
    Vice President
    European Investment Bank
  • Marjeta Jager
    Deputy Director General
    European Commission - DG for International Cooperation and Development
  • Xavier Michon
    Deputy Executive Secretary
    United Nations Capital Development Fund (UNCDF)
  • Roberto Ridolfi
    Director for Sustainable Growth and Development
    European Commission - DG for International Cooperation and Development
  • Rémy Rioux
    Chief Executive Officer
    Agence Française de Développement
  • Dina H. Sherif
    CEO/Founding Partner
    Ahead of the Curve
Photo gallery

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