Financing Development: Private Capital Mobilization and Institutional Investors

41 Pages Posted: 21 Mar 2021

Date Written: March 17, 2021

Abstract

This report discusses key issues around the mobilization of private capital for development. Investment requirements are huge, especially for infrastructure, climate and other SDG-related investments. External finance for developing countries stagnated in the years before the pandemic, followed by a major setback in 2020/2021. The focus is in particular on institutional investors, whose exposure to less-developed countries is still very low, even more so in unlisted assets and projects. There is a potential for progress as asset owners seek new diversification opportunities in growth markets. The main burden is on governments to create favourable business conditions for investable long-term assets. Policy makers, development finance institutions and investors should utilize the full spectrum of investment vehicles - commercial, impact and blended finance.

Keywords: development finance, private capital, institutional investors, emerging markets, blended finance, infrastructure investment, asset owners, impact investment, SDG investing, multilateral development banks, development finance institutions

JEL Classification: F21, F3, G15, G18, G2, H54, H57, J32, L9, M14, O16, O18, 019, Q01, Q5

Suggested Citation

Inderst, Georg, Financing Development: Private Capital Mobilization and Institutional Investors (March 17, 2021). Available at SSRN: https://ssrn.com/abstract=3806742 or http://dx.doi.org/10.2139/ssrn.3806742

Georg Inderst (Contact Author)

Inderst Advisory ( email )

4 Evangelist Road
GB London, NW5 1UB
United Kingdom

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