Stocktaking of Private Finance Mobilization at the IDB Group

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Feb 2024
In the past two decades, as public sector finance has proven insufficient to meet global development needs, private finance mobilization (PFM) has emerged as a key approach for development financing in Latin America and the Caribbean (LAC). Recognizing that relying only on profits, additional capital contributions, and grant resources from the donor community or public sector entities is insufficient to fund the growing development needs; multilateral development banks (MDBs) have looked at PFM as one of the ways to increase available development financing. This stocktaking reviews the experience of the Inter-American Development Bank Group (IDBG) using PFM as a tool to obtain additional private sector resources for the operations it finances. OVE analyzed PFM at two levels: strategic and operational. The strategic level covers what the IDBG intended to achieve with PFM (objectives) and the approach selected. The operational level covers how the PFM approach was implemented and what has been accomplished to date. Given their different business models, PFM has evolved differently at the IDB and IDB Invest. OVE, therefore, examined them separately.