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Impact of DFIs on sustainable development - essay series


EDFI & ODI launch their first impact essay series exploring European DFIs’ impact on the achievement of the Sustainable Development Goals.

European DFIs play a positive role in supporting economic growth and job creation through the mobilisation of private investment in developing countries. In particular, there is growing evidence of their contributions towards the Sustainable Developments Goals (SDGs):

  • SDG 7 (ensuring access to affordable, reliable, sustainable and modern energy for all),
  • SDG 8 (promoting sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all),
  • and SDG 13 (taking urgent action to combat climate change and its impacts).

In March 2019, EDFI launched its first Impact Conference with the Overseas Development Institute (ODI), convening 100 experts from across Europe to exchange on DFI investments’ impact on jobs, energy, climate change, and economic transformation. To capitalize on the input received, leading European experts were invited to reflect on the themes explored during the conference. Throughout 18 short essays, they provide practice-based evidence of DFI impact and role in achieving the Goals, identify current challenges and discuss opportunities for better supporting sustainable growth in developing countries.

Part 1 DFIs and job creation and decent work
• Direct and indirect impacts of development finance institutions on job creation and decent work – A. Lemma, ODI
• Decent work and development finance – K. Newitt and A. Usher, Ergon Associates
• From study to solution: bridging the skills gaps – C. Rudolph, Deutsche Investitions- und Entwicklungsgesellschaft
• How private investment creates decent jobs in low- and middle-income countries: a new framework to measure the impact – W. Loewenstein, Ruhr-Universität Bochum

Part 2 DFIs and climate change: transformation and access to clean energy
• Understanding the impact of development finance institutions in catalysing private investment to tackle climate change and increase access to energy – S. Attridge, ODI, & M. Gouett, independent research consultant
• Energy transition and the Paris Agreement – P. Forestier, Proparco
• A crucial role for development finance institutions in energy projects across sub-Saharan Africa – K. Teien Blystad, Norfund
• Theories of change and the impacts of renewable energy investments – J. Uusihakala, Finnfund, and T. Nenova and R. Kim, Steward Redqueen

Part 3 Frontier issues in understanding the impact of DFI and private investment
• Understanding the contribution of development finance institutions to economic transformation – P. Carter, CDC Group
• A new focus for development finance institutions to enhance the role of economic transformation – D. Willem te Velde, ODI
• Seeking impact unicorns: why development finance institutions should set their sights on transformational change – C. Isaac and M. Liesner, AgDevCo
• Not just any capital: why development finance institution intervention through foreign direct investment is different – M. W. Hansen, Copenhagen Business School
• The impact of development finance institutions: what we know, what we don’t and how to improve – S. Attridge, Overseas Development Institute, & M. Gouett, independent research consultant
• Development finance institutions: a complement, not a panacea – MJ Romero, Eurodad, and J. Kwakkenbos, Oxfam
• Development effects of foreign direct investment in the realm of the New Development Paradigm: implications for development finance institutions – C. Valeur Nygaard, Roskilde University, & M. W. Hansen, Copenhagen Business School
• Measuring and managing the development impact of an investment portfolio: the Development Effectiveness Rating (DERa) – J. Frede and E. Maliepaard, Deutsche Investitions- und Entwicklungsgesellschaft
• How can development finance institutions define and support ‘The sustainably acting and financially successful company’ – J. Frede, Deutsche Investitions- und Entwicklungsgesellschaft
• Harmonisation of impact measurement among development finance institutions and beyond: opportunities for European leadership – S. Bilal and J. van Seters, European Centre for Development Policy Management