As European DFI portfolios have grown, so has their contribution to development outcomes. Their investments are concentrated in regions and sectors with high relevance for international development policy.
DFIs’ commitments support projects that would otherwise not have obtained the same financing. A DFI will typically remain invested in projects for an extended period of five to 10 years, or longer. They track and report on the contributions that these private sector projects make to development outcomes on an on-going basis. The most important direct contributions are job creation and skills development, environmental and social outcomes, investment results, the provision of valuable goods and services, and tax revenues in developing countries.
In addition to the direct development outcomes reported at a project level, there is emerging evidence that DFI investments generate an impact that goes beyond the project’s direct productive activity and lifetime. Although these indirect impacts may seem more difficult to assess, DFIs have started to measure them, with the aim to evaluate the contribution of their investments to reaching the SGDs. For example, the ability of DFIs to contribute to climate change goals depends on their ability to catalyse investment in energy efficiency and green technologies, not just on whether an individual project has an acceptable financial return or saves on energy use*. These indirect effects include: indirect employment effects, labour productivity, economic growth, investment, poverty and environmental impacts.
European DFI’s contribution to development outcomes
Key contributions to development outcomes in 2020
– 11.2 million jobs
2.6 million people employed in EDFI financed companies and financial institutions.
At least 8,6 million people employed in companies receiving EDFI capital through financial institutions and investment funds.
– 100 TWh of electricity generated during year.
EDFI 2020 investments in renewable energy or energy efficiency projects reduced 3.8m tonnes of CO2 equivalent emissions per year.
– €15 billion in tax contribution to governments.
European DFIs contribute to the SDGs:
Is a key channel through which economic growth uplifts the the poor.
Investment in private sector projects
Help create and safeguard jobs and improve the working conditions for the employees.
Investments that are commercially sustainable
And catalyse capital from private investors help strengthen domestic tax revenue.