New MIGA report on overcoming collapse of market finance in developing countries

  • Amidst the collapse of market finance in developing countries, Multilateral Development Banks (MDBs) emerge as crucial agents for resource mobilization in sustainable development.
  • For example, there is a need to provide debt cover where governments only offer partial or no debt cover for energy projects with state owned off-takers. 
  • In the new MIGA report, “Market Finance for Development: Taking Stock,” the emphasis lies on optimizing shareholder capital through innovative structures like portfolio guarantees.
  • The report underscores the vital role MDBs play in reshaping financial landscapes, offering valuable insights for policymakers and stakeholders in development finance.

This report provides an analysis of long-term trends in private flows to low- and middle- income countries since the turn of the 21st century. The analysis covers foreign direct investment, portfolio debt and equity flows, syndicated lending, remittances, cross-border payments, South-South investments, local currency financing, and climate financial flows to developing countries.

Private capital flows to developing countries are in retreat, and indebtedness indicators are worsening, even as more resources are needed for combating poverty, food insecurity, fragility, and climate change. MDBs can play a catalytic role in securing private capital flows to developing countries while avoiding an excessive build up in their indebtedness.

Link to the full report HERE: MarketFinance_MIGA

Author: Bryan Groenendaal

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