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DFIs to play key role in global crisis response

19.05.2022 Rome 01.06.2022

One hundred development finance experts gathered in Rome at the occasion of EDFI’s Annual Meeting, hosted by CDP and Simest, on 19-20 May 2022.

Executives from European Development Finance Institutions (DFIs), senior officials from government shareholders and partner institutions gathered in Rome to discuss the top issues relating to finance for development. This year’s EDFI annual meeting was about how we can deepen DFI collaboration to face the multiple crises affecting our economies and the development of countries in greatest need. It brought together the perspectives of development finance leaders from across Europe and beyond, to take stock of progress and explore new strategic directions for the industry.

 

Pasquale Salzano, SIMEST’s chairman said: “SIMEST was among the first institutions to join EDFI in 1995. Since then, the Association has played an important role in supporting the positive results of the European DFIs Family, which CDP Development Finance also joined in 2019. Over these years, the development finance landscape has changed with public aid and private finance playing a crucial role together at the centre of global and national development initiatives.”

The local and global crises we are facing demand DFIs to be present and step forward in the response through our support and investment in private sector enterprises. Flexible innovative responses for those in greatest needs are urgently needed. We, as a group, may be able to promote a joint response,” added Bruno Wenn, Chairman of EDFI.

Just as economies emerge from the COVID-19 pandemic, the Ukraine crisis has created another shock in Europe, with severe effects extending to global economy, and food and energy supplies in particular. During her keynote address, Odile Renaud-Basso, President of EBRD, outlined how the institution is mobilising to support Ukraine in concert with its partners.

Looking forward, whenever it is possible, the reconstruction of Ukraine will be the biggest challenge the development finance architecture has faced in recent decades. Applying the concept of “open architecture” and including the European DFIs and the EBRD, together with the EIB and other participating partners in the governance will be key,” she said.

A COORDINATED RESPONSE TO UKRAINE CRISIS

In a subsequent panel discussion: Nicolai Boserup, General Counsel and Senior Vice President of IFU, Krzysztof Senger, Managing Director International Business and Cooperation of Polish Development Bank BGK, and Ruurd Brouwer, CEO of TCX discussed DFI’s responsibility to prevent the overflow of the crisis by removing barriers to support Ukraine as well as countries and economies affected by the crisis.

Emerging and frontier markets find themselves in a volatile environment. Uncertainty about global #inflation, the invasion of Ukraine and supply chain disruptions drive investors into safe havens like US dollar assets. The risk-off sentiment, coupled with ratehikes in the US, strengthens the dollar versus many other currencies and makes (re)financing more expensive. This leads to challenges for emerging markets and frontier markets and stresses, once again, the importance of debt sustainability. DFI lending in local currency and hedging hard currency debt is critical to shield borrowers from exchange rate fluctuations,” explained Ruurd Brouwer, CEO of TCX.

scaling up Climate and sustainable infrastructure

In line with their recent pledge to enhance collaboration in support of infrastructure development, DFIs reiterated their shared international priority to meet sustainable infrastructure needs of low and middle-income countries. According to the World Bank, for every dollar invested in resilient infrastructure in emerging and developing countries alone could potentially generate $4 in benefits. DFIs, as bridge between the public and private sector, can support a rebound in green and sustainable infrastructure investment. European DFIs investments in sustainable infrastructure investments, currently account for approximately 30% of their aggregate outstanding portfolio.

Giovanni Gorno Tempini, President of CDP and Scott Nathan, CEO of US DFC, outlined the opportunities and challenges in addressing climate change through transactions. Debates focused on alignment with the Paris Agreement, how to reach a consensus around infrastructure standards, opportunities for investments in climate adaptation, and ways to boost renewable energy capacity in Africa.

 

an intensified DFI COLLABORATION

Enhanced DFI collaboration is a priority objective for European DFIs and partners, committed to deliver effective collaboration, alongside significant activity in relation to joint financing facilities.

Françoise Lombard, CEO of Proparco, Michael Jongeneel, CEO of FMO, Roland Siller, CEO of DEG, Scott Nathan, CEO of US DFC and Markus Berndt, Acting Managing Director at EIB Global reflected on DFIs’ joint ambitions and collaborative platforms to advance cooperation between DFIs, based on key principles: trust, mutual understanding, and transparency. Looking forward, more collaboration in terms of harmonisation and innovation is expected.

We should go further in terms of harmonisation. As DFIs, we need to speak the same language which requires shared definitions, standards and methodologies. This is crucial for both our clients and or institutions in order to reinforce impact generation and credibility towards civil society” emphasized Françoise Lombard, CEO of Proparco.

“With EIB global, we aim to enhance the impact of EIB activities outside the EU. As such, we also want to ensure we can be a better partner for other DFIs and partners, to spur the dialogue, and ensure a strengthening of Team Europe,” added Markus Berndt, Acting Managing Director at EIB Global.

 

SPUR innovation FOR private sector mobilisation

The pandemic forced the international community to rethink to new ways of working, innovate and collaborate to deliver more impact. Koen Doens, Director General, Directorate General for International Partnerships at the European Commission outlined the European Commission’s geopolitical strategy to build on the EU and member states’ long-standing experience in working strategically and effectively with international partners to shape world that is green, digital and fair, with equal opportunity for all.

DFIs and partners discussed ways to innovate and collaborate to deliver more impact, setting a strong example for private investors, notably through the Team Europe approach and the Global Gateway initiative. Several new DFI initiatives are emerging in Europe. Experts at the meeting explored how DFIs can become more catalytic to mobilise private impact investors.

APPOINTMENTS TO EDFI BOARD OF DIRECTORS

During the Annual General Meeting, EDFI also confirmed the mandate of its Board of Directors, consisting of the CEOs of five member institutions and a Chairman serving in an individual capacity. The EDFI Board for the coming year involves the following members:

  • Bruno Wenn– Chairman
  • Antonella Baldino– Chief International Development Finance Officer, CDP
  • Maria Hammarskjöld Håkansson– CEO, Swedfund
  • Françoise Lombard– CEO, PROPARCO
  • Nick O’Donohoe– CEO, BII
  • Luuk Zonneveld– CEO, BIO

 

 

THE DIALOGUE CONTINUES…

To conclude the annual gathering, Søren Peter Andreasen CEO of EDFI presented the upcoming milestones for European DFIs. Collaboration, mobilisation and harmonisation will be top priorities on EDFI’s innovation agenda in the coming year.
“We are challenged to deliver on the demanding mandate that DFIs have. We are working in countries that are confronting several crisis, local or global in nature. These years are not only testing the resilience of our clients but also of our own institutions. This makes solidarity very important, together, we are stronger” he concluded.

The next EDFI Annual Meeting with shareholders and partners will take place on 25-26 May in Denmark, hosted by IFU, the Danish DFI.

 

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Participants included representatives from:

EDFI members:

  • BIO
  • BII
  • COFIDES
  • CDP development finance – SIMEST
  • DEG
  • Finnfund
  • FMO
  • IFU
  • Norfund
  • OeEB
  • PROPARCO
  • SIFEM
  • SOFID
  • Swedfund

DFIs shareholders

  • Austria, Ministry of Finance
  • Belgium, Ministry for Development Cooperation
  • Denmark, Ministry of Foreign Affairs
  • Finland, Ministry of Foreign Affairs
  • Italy, Ministry of External Affairs and Development
  • Italy, Ministry of Economy and Finance
  • Portugal, Ministry of Foreign Affairs
  • Sweden, Ministry for Foreign Affairs
  • Sweden, Ministry of Innovation
  • Switzerland, SECO
  • United Kingdom, Foreign, Commonwealth & Development Office

Partners 

  • BlueOrchard
  • Cardano Development
  • CDP
  • Czech Republic, NRB
  • D20 Long Term Investors Club
  • EBRD
  • EIB
  • European Commission
  • FinDev Canada
  • Luxembourg, Ministry of Finance
  • Poland, BGK
  • US DFC
  • TCX