Centre for Development Finance Studies

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Short Read 3: A Sense of Securitisation

Demystifying securitisation and assessing its potential to accelerate the financing of sustainable development. Risk transfer has at long last been admitted to the development finance conversation. As stakeholders seek to identify the means of its advent, the term securitisation has itself become a feature of the debate. Never a particularly mainstream corner of capital markets and owing at least some awareness to its contribution to the global financial crisis, any mention of securitisation in development finance circles is typically met with a varying mix of excitement and concern. It may therefore prove useful to demystify a comparatively straightforward mechanism and to assess the potential and the challenges of its use to accelerate the financing of sustainable development.

OECD: DFI Funding Models

Compiled in collaboration with the OECD, the study investigates and compares the funding models of three bilateral DFIs. This study investigates and compares the funding models of three of the 17 main bilateral development finance institutions (DFIs). Its objective is to encourage conversation around their respective merits and demerits, to help stakeholders make informed decisions regarding the DFI’s balance sheet options and the use of debt capital markets-based leverage. This paper has been prepared as an input to the discussion on Mobilisation in the OECD Development Assistance Committee Community of Practice on Private Finance for Sustainable Development (CoP-PF4SD).

Short Read 2: Measurement, Reporting and Mobilisation

An analysis of existing frameworks for the measurement of private capital by DFIs and MDBs. As the development finance system of institutions scrambles to mobilise capital markets, accurately assessing progress is necessary to develop an understanding of what the most effective strategies and instruments are, and what simply does not work. The adoption of methodologies delivering an overly optimistic picture of current achievements conversely presents a direct threat to the ability of the system to deliver on the objectives set by shareholders. Corrective measures are needed, and it seems necessary to push for the adoption of a single measurement system. This should introduce dimensions too often overlooked in the debate: time, risk, and funding strategies. Self-assessment is, absent an independent verification mechanism, perhaps not an advisable route to the measurement of capital mobilisation by DFIs and MDBs.

PWYF: DFI Transparency Index

The CDFS contributed to Publish What You Fund’s inaugural DFI Transparency Index Report, which details a comparative measure of the transparency of the world’s leading DFIs. As global crises mount—from the social and economic fallout of COVID-19 to the deepening climate crisis, to food insecurity compounded by the Russian invasion of Ukraine—development finance institutions (DFIs) are increasingly being called upon to address these issues. Although more resources are being funnelled through DFIs, it is a challenge to know what investments are being made and the impact these are having. This report presents the findings of Publish What You Fund’s first DFI Transparency Index. The DFI Transparency Index is a comparative measure of the transparency of thirty leading DFI portfolios. It assesses multilateral and bilateral institutions, and sovereign (public sector) and non-sovereign (private sector) operations.

Short Read 1: ODA, PSI, Incentives, and Why they Matter

Numbers have a stubborn tendency to develop a life of their own. Measurements morph into targets, targets turn into ceilings, ceilings inevitably lead to optimisation, and the dynamics of optimisation create incentives. Incentives have real life consequences. The modernisation of the DAC Statistical System and the rules it sets for ODA reporting have far reaching implications for development finance.