2025 may be recorded as “the year the private sector has taken over” development finance, say participants at this fourth International Conference on Financing for Development, or FFD4, which is wrapping up today in Seville, Spain.
The big institutions funding international development have changed their tune in recent years under pressure to be more catalytic and effective mobilizers of private capital. Indeed the words “catalyze” and “mobilize” appear all over new funding initiatives, press releases and reports from British International Investment, IDB Invest and the International Finance Corp. and other development finance institutions and multilateral development banks.
The latest DFI Transparency Index from Publish What You Fund finds that we still have little clarity on how DFIs’ and MDBs’ $3 trillion in assets are meeting their goals and what they’re mobilizing.
Against the British nonprofits’s inaugural transparency index, released in 2023, all institutions except one improved data tracking, disclosure and accessibility. But “overall performance remains low, especially for non-sovereign DFIs, particularly in the most critical areas: impact data, private capital mobilization, climate finance and assurance of community disclosure,” said Publish What You Fund’s Gary Forster at a recent discussion of the latest data.
The group of non-sovereign DFIs is primarily composed of individual countries’ development finance institutions, which are publicly funded but are not backed by funding guarantees from a sovereign state or group of states. These include the UK’s BII, the US’s International Development Finance Corp., the Swiss Investment Fund for Emerging Markets, Denmark’s Investment Fund for Developing Countries and others.
It also includes regional institutions like the Development Bank of Latin America and the Caribbean and the Asian Infrastructure Investment Bank.
Sovereign entities in the index include the World Bank, the Asian Development Bank and the Inter-American Development Bank, which are backed by sovereign funding guarantees.
Sovereign institutions have ranked relatively highly on the Index for their data transparency on metrics like private capital mobilization disclosures, impact measurement approaches, and climate finance transparency. The World Bank scored 85.7 out of 100 for its total transparency score, up 20.3 percentage points from 2023.
“It was one of two institutions to score a perfect 30 out of 30 for impact management, as it consistently disclosed results information – including baselines, targets and actual results – in a systematic manner,” finds Publish What You Fund.
The Asian Development Bank followed at 85.4 and the African Development bank at 81.6.
“The biggest problem we have relates to the transparency of non-sovereign DFIs,” said Forrster.
Just four scored above 50 on the 2025 Index. All were non-sovereign divisions of sovereign institutions, such as the Inter-American Development Bank’s private financing arm, IDB Invest, and the World Bank’s International Finance Corp.
None of the 12 bilateral DFIs scored above 50. The highest ranked, British International Investment, made a 19-percentage-point improvement from 2023, but still came in with only 45.7 points. It shows how far such institutions have to go, said Forster.
“Even basic information relating to co-financing, concessionality and private capital mobilization isn’t being shared,” he said.
Urgency of the moment
Overseas development assistance from wealthy countries to low- and lower-middle income countries is falling at a time when needs for such assistance—for humanitarian disasters, conflicts and the impacts of climate change—is sharply increasing. ODA commitments in 2024 were down 7% from 2023, and that was before the US abruptly shuttered its $40 billion annual aid agency. Other donor countries, including the UK, Germany, France, the Netherlands, Finland, Norway, Sweden and Switzerland, have also cut their ODA spending.
Urgency to fill development finance gaps with private money “has been the single dominant theme” in Seville, BII’s Leslie Maasdorp told ImpactAlpha. “Not so much as a statement of intent, but as a call to action, as the development community recognizes that more standardized instruments and common approaches are required to reach scale.”
Private investors are unlikely to put their money in countries and sectors that have long been the domain of aid, such as food aid in extremely poor communities and conflict zones or free or very low-cost drug distribution.
In places where markets are under-developed, development finance, philanthropic and catalytic capital is necessary to derisk opportunities and prove investability.
“Markets aren’t built in silence. To build markets, you need to share data—including risk, returns, impact, deal structures,” said Forster.
New aggregated lending performance data released last year by the Global Emerging Markets, or GEMs, consortium of DFIs and MDBs, validated some existing private data and market research suggesting the perception of risk for emerging markets is overblown. The consortium has so far declined to make open access to the GEMs database, citing contract “confidentiality considerations” as one of the primary reasons.
“That’s largely of their own making, the result of restrictive non-disclosure agreements and contracts they design,” said Forster. “And while those contracts could be changed for future deals, no DFI appears willing to do so.”
The Development Bank of Latin America and the Caribbean, or CAF, made a deliberate effort to address its restrictive disclosure agreements by asking clients for permission to disclose how much additional private capital had been invested in their deals. The data isn’t available for CAF’s full portfolio, but Publish What You Fund called its approach “a roadmap for what all DFIs should do prior to making investments.”
IDB Invest has also started disclosing private capital mobilization numbers on a deal by deal basis.
A few institutions have stepped up efforts to publish better deal performance data. Denmark’s IFU currently sets the high bar for taking a systematic approach to disclosure, finds Publish What You Fund. The African Development Bank is less systematic, but its improvements since 2023 nevertheless demonstrate “that transparent results data is possible,” the organization says.
SIFEM in Switzerland launched a new website with more data laid out in more accessible formats.
The US DFC was the only one of the 32 institutions in the DFI Transparency Index to backslide on its scoring It dropped to 34.2 from 38.2 in 2023, when it was the highest ranking bilateral DFI. The drop is due to reduced disclosure of climate, gender and other impact information as a result of the Trump administration’s anti-climate and DEI agendas.
That all other institutions have made improvements against their 2023 baseline shows progress, said Forster. But if pressure is mounting on the private sector to backstop shrinking public funding for international development, he added, then DFI transparency is “fundamental to the mission of these organizations.”
“One investor told me that DFI data is more valuable than their money right now,” Forster told ImpactAlpha, and that the “lack of sharing data was the biggest blocker to market entry for the private sector.”
“If you claim to be pioneering in these markets, then you need to share your maps,” he said. “Otherwise, don’t expect anyone to follow.”
