The importance of systemic collaboration between multilateral development banks (MDBs), public development banks (PDBs), and other development partners for mobilizing private sustainable infrastructure financing was the focus of an MCDF cohosted seminar held at the Finance in Common Summit (FiCS) in Cape Town, South Africa, on 26 February. MCDF CEO Zhongjing Wang, who spoke at the seminar, also met with high-level MDB and PDB representatives alongside FiCS, on 26-27 February.
The seminar was co-organized by the Asian Infrastructure Investment Bank (AIIB), Inter-American Development Bank (IDB), and the Latin American Association of Development Financing Institutions (ALIDE). Participants described three essential functions for multilateral and national development banks to attract private sector capital to finance sustainable infrastructure in developing countries: advising and financing governments on policy reforms to build a more investment-friendly environment, preparing bankable projects, and mobilizing financial instruments to mitigate project risks.
In his welcoming remarks, Mr. Jordan Schwartz, IDB Executive Vice President, described how functioning markets, predictable regulations and pricing, as well as the rule of law, and macroeconomic stability are the primary drivers of private investment. MDBs are ideally suited to finance both the policy reforms and provide the de-risking, capital market, and direct financing instruments that bring transactions to financial close, he added.
During panel discussions, Mr. Solomon Quaynor, Vice President of the African Development Bank (AfDB) Group, highlighted two facilities that AfDB has established to support project preparation: Africa 50 and the Alliance for Green Infrastructure. Sir Danny Alexander, HSBC Infrastructure Finance CEO, said that preparing projects costs twice as much in developing countries and so the private sector welcomes support facilities such as these to help this vital work move forward.
In terms of financial instrument creation to mitigate risks, Prof. Marta Postula, First Vice President of Poland’s National Development Bank (BGK), said that the provision of guarantees by BGK is effectively catalyzing private investment in the country. Mr. Woochong Um, CEO of the Global Energy Alliance for People and Planet, and Mr. Pradeep Kurukulasuriya, Executive Secretary of the United Nations Capital Development Fund, expressed the willingness of their organizations to provide 'first loss' guarantees.
Mr. Jorge Velarde, Chairman of the Development Bank of Peru (COFIDE), underlined the essential support that COFIDE is receiving from IDB, the Development Bank of Latin America and the Caribbean (CAF), and the International Finance Corporation to increase its impact.
In scene-setting remarks, MCDF CEO Zhongjing Wang discussed how MCDF is working closely with partners to support both project preparation and capacity building to improve policies aimed at boosting high-quality connectivity infrastructure investments. He went on to detail MDB-PDB complementarities for realizing sustainable infrastructure and concrete ways MCDF is fostering collaboration between them.
CEO Wang cited MCDF grant support for projects to help the Export-Import Bank of China and Development Bank of Kazakhstan develop green financing frameworks that allow private sector participation. The projects are being implemented by AIIB. He also spotlighted MCDF grant support for an AfDB project to help commercial banks in Egypt and Morocco develop new green infrastructure banks.
“Strong knowledge and financing partnerships between International Financial Institutions, public development banks, and the private sector are crucial to closing the gap in sustainable infrastructure services,” said CEO Wang.
While at FiCS, CEO Wang met Mr. Serge Ekue, President of the West Africa Development Bank (BOAD). They discussed BOAD's recent capital increase and business model, as well as areas of possible BOAD-MCDF cooperation.
CEO Wang additionally met with Dr. Tony Okpanachi, Managing Director and CEO of the Development Bank of Nigeria (DBN), and Dr. Emebet Melese, President of the Development Bank of Ethiopia (DBE), respectively. During these meetings, they discussed DBN’s and DBE’s priorities and areas of alignment with MCDF support for developing country financiers (New Partners).
On the margins of the MCDF seminar, CEO Wang and his team met with Vice President Quaynor of AfDB Group. Together, they discussed AfDB’s active use of the MCDF Finance Facility, having received USD15.5 million in grants for nine projects since 2022 and become MCDF’s largest grant recipient. They also discussed priorities for deepening AfDB-MCDF collaboration.
The MCDF team met with Mr. Ignacio Corlazzoli, Director General of Resource Mobilization and Global Alliances Management at CAF, to plan joint activities for the year, as part of CAF’s role as Chair of the MCDF Coordination Committee. Other MCDF meetings were held with representatives from British International Investment, the European Investment Bank Global, Green Climate Fund, Infrastructure South Africa, and Peking University.
Contact
David Hendrickson
Senior Communications Officer
Mobile: +86 185 0114 6758
david.hendrickson@themcdf.org
