The role of the DFIs, in providing development finance for private sector projects and having a positive impact in the countries where they invest, is guided by three success criteria: additionality, catalytic effect, and project sustainability. Investments that meet these criteria have the potential for making lasting contributions to the economic transition in developing countries. This is particularly the case when DFIs work with local front-runners to build new industries.
DFIs have a particularly strong track-record in financial inclusion and climate finance, two investment areas that demonstrate a high level of additionality. They have also, in different ways, succeeded in mobilising a high degree of private participation on their balance sheets, in projects, and through new innovative facilities. They perform well in funding successful development investments that achieve beneficial financial results, contribute to effective development outcomes, and adhere to responsible investment practices with respect for human rights and environmental sustainability.
DFI involvement has helped many entrepreneurs to become competitive with multinational companies and sustain continued expansion over the longer term.
In underserved geographies sectors, and segments by taking a long-run approach that permits higher risks.
Other investors by sharing risk, being first-movers demonstrating to other investors how to invest in high risk projects, and by sharing expertise.
Build sustainable sources of jobs and tax income by investing in financially self-sustainable projects, and by applying responsible business standards for environmental social and governance concerns.