The Global Goals’ Business Opportunity in Africa

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By Lord Mark Malloch-Brown, Chair, Business & Sustainable Development Commission, former UNDP Administrator and Ex-UN Deputy Secretary-General, and UK Minister of State for Africa, Asia and the United Nations


Learn more about this timely topic at the upcoming
Global Forum on Development on 5 April 2017.
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Lord-Mark-Malloch-BrownA critical transition from a heavy reliance on international public development finance to locally generated private sector solutions to development problems is underway. Earlier this year, the Business & Sustainable Development Commission launched its flagship report, Better Business, Better World, which makes the case for why the Sustainable Development Goals (SDGs) offer the private sector a growth strategy that opens new market value and helps solve significant social and environmental challenges at the same time. The Commission shows how sustainable business models could unlock economic opportunities across 60 “hot spots” worth up to USD 12 trillion and increase employment by up to 380 million jobs by 2030. In Africa alone, sustainable business models could open up an economic prize of at least USD 1.1 trillion and create over 85 million new jobs by 2030.
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Blended Finance: Critical steps to ensure success of the Sustainable Development Goals

By Chris Clubb, Managing Director, New Products and Knowledge, Convergence

blended-investmentThe facts are known. Official Development Assistance (ODA) from member countries of the OECD’s Development Assistance Committee (DAC) will not grow at the rate necessary to fully deliver on the Sustainable Development Goals (SDGs). Blended finance, defined as the strategic use of official (public) funds to mobilise private sector investment for emerging and frontier economies [1] , is recognised as an important tool within the development toolbox to mobilise new capital sources to achieve the SDGs. Through blended finance, public funds can target a risk that the private sector is unwilling or unable to take. It also can be used to improve the risk-return profile of an investment to an acceptable level for the private sector. What all this does is attract much-needed private sector investment and know-how to projects.
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What does the evidence on blended finance tell us about its potential to fill the SDG funding gap?

By Harpinder Collacott, Executive Director, Development Initiatives

arrow-upSome argue that blended finance, or the use of public funds to de-risk or leverage private investments in development, has the potential to provide part, if not all, of the solution to the funding gap facing the Sustainable Development Goals (SDGs). This is no small undertaking since it is estimated that as much as an extra USD 3.1 trillion annually is needed until the 2030 deadline. No wonder the appetite is strong to look beyond traditional development co-operation and see how private finance can be better mobilised to eradicate poverty. But when it comes to blended finance, some fundamental issues need to be considered before scaling up official development assistance (ODA) investments in this area.
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Financing the SDGs in cities: Innovative new approaches

By Gail Hurley, Policy Specialist on Development Finance, Bureau for Programme and Policy Support, United Nations Development Programme

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Mumbai is among a growing number of cities exploring green bonds as an option for financing sustainable urban development.

 “Cities are major drivers of the global economy. Today, cities occupy only 2% of total land but account for 70% of GDP.” (Habitat III, 2016)

Many of the investments needed to achieve the Sustainable Development Goals (SDGs) will take place at the sub-national level and be led by local authorities, especially in urban areas. Massive public and private investments will be needed to improve access to sustainable urban services and infrastructure, to improve cities’ resilience to climate change and shocks, and to prepare them to host 2.5 billion new residents over the next three decades, particularly in developing countries.  If city authorities can meet these challenges head-on, the sustainable development dividends could be immense. This reality underscores the need to recognise and strengthen the capacities of local authorities as major actors in promoting sustainable development.
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Maximising bang for the buck: Risks, returns, and what it really means to use ODA to leverage private funds

By Paddy Carter, Research Fellow, Overseas Development Institute

shutterstock_249974521The idea of using official development assistance (ODA) to leverage private finance is a staple of the financing for development circuit and features heavily in most donors’ strategies. Experienced financiers both from official sector development finance institutions (DFIs) and private investors are, however, still feeling their way into this field’s unfamiliar territory. DFIs for the most part emphasise the importance of providing finance on non-concessional terms to avoid distorting markets and crowding-out other sources of finance. Though some standard elements of their business could fall under the rubric of blended finance, such as grant-funded technical assistance, for the most part DFIs and development banks have treated explicit subsidies to private enterprises as dangerous medicine to be prescribed rarely. Now the pressure is mounting to find more creative ways to leverage private finance using ODA. But how?

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The three circles of philanthropy: Taking a tiered approach to achieving the SDGs

By Bathylle Missika, Senior Counsellor to the Director of the OECD Development Centre and Head of Unit – Partnerships & Networks, Organisation for Economic Co-operation and Development (OECD)

the-three-circles-of-philanthropy2People around the world have little faith in the ability of just governments to deliver on the promise of the Sustainable Development Goals (SDGs). They know governments alone can’t promote sustainable development and prosperity for all. What will make a difference is involving new partners. Philanthropic foundations, with their resources, expertise and quest for innovation, are prime partners in development. But how do we unleash the power of philanthropy to be agents of development change? How can we tap into this community of philanthropists and leverage their ability to take risks and to innovate in sectors like education, gender or youth empowerment? Better understanding foundations and how they view the 2030 Agenda will help us better partner with them. That’s why the OECD’s Network of Foundations Working for Development (netFWD) unveiled a new circle typology to outline a fresh way to think about and understand philanthropies and their role in advancing the SDGs and well-being overall. Continue reading

Creating jobs in the developing world

By Elizabeth L. Littlefield, OPIC President and CEO

Development-financeA generation ago, private capital flowing into developing countries was a small fraction of aid dollars. In recent years that ratio of aid to investment has flipped, and the amount of investment flowing to the developing world far exceeds aid dollars.

This significant increase in private investment comes at a good time. The cost of addressing the world’s most urgent development challenges outlined last year in the 2030 Agenda for Sustainable Development is in the trillions of dollars. Compare that to the estimated USD135 billion per year in total global aid flows.

Development finance institutions like the U.S.-based Overseas Private Investment Corporation (OPIC) were built on the understanding that the challenges the world faces are greater than any government can address on its own. They also reflect the conviction that business can serve as a force for good in development. OPIC works to mobilise private capital to support entrepreneurship and expand access to housing, education, financial services, energy and more. Continue reading