To meet the investment needs of the Sustainable Development Goals (SDGs), the development financing landscape is going through a paradigm shift to move the discussion from “billions” in official development assistance (ODA) to the “trillions” needed in investments of all kinds: public and private, national and international, in both capital and capacity. The client has been continuously adapting to the changing international environment and plans to evolve from an ODA-focused agency to one that leverages and channels funding from a wider range of sources.
Under this changing development financing environment, the Capstone team has been tasked to redefine the client’s role to catalyze development finance in achieving SDGs. Specifically, the team has analyzed the client’s future roles in two areas: Private Sector Finance and Official Loans.
Private Sector Finance: The team recommended that the client should 1) incorporate the increasing development in CSR (corporate social responsibility), particularly in India, into their development portfolio and 2) leverage its local expertise to specialize in implementation and participate in the new waves of development finance, including blended finance and impact investing.
Official Loans: The team recommended that the client should 1) help governments and multilateral development banks address implementation bottlenecks by providing operational capacity, especially in fragile states and 2) increase cooperation with new development banks since they often lack implementation experience.
Overall, the Capstone team encouraged the client to think like the private sector, but to act like the public sector to adapt better in changing development financing environment.