“Mobilising capital – For a new financing model”: the latest issue of Private Sector & Development

In developing countries, private capital offers considerable potential for financing businesses, infrastructure and major economic, social and climate transitions. However, its mobilisation continues to be hampered by numerous obstacles such as perceptions of risk, limited depth of financial markets and incomplete regulatory frameworks. The challenge is to create the conditions that will enable investors to make long-term commitments, including in those sectors and regions where financing needs are greatest.

So it is not just a question of attracting new investors, but of developing markets capable of absorbing this capital, diversifying sources of finance and strengthening the role of local financial stakeholders.

To meet this challenge, it is vital to remove the barriers to private investment and to strengthen the capacity of local financial markets to mobilise long-term finance. Aside from financial instruments, the challenge involves channelling capital more effectively into the productive economy towards the essential needs of developing countries, so as to make private investment a sustainable driver of their development.

In this issue, Proparco gives a voice to its clients and partners, who share their experiences and convictions and the solutions they have implemented on the ground. Profiles, interviews, analyses and case studies are combined to compare and contrast the challenges and the practical levers that can be employed to mobilise private capital.

The articles explore solutions such as guarantees, blended finance, innovative financing or the mobilisation of local savings as potential ways of removing barriers to investment, sharing risks and strengthening local financial markets. They also highlight the key role played by development finance institutions in fostering investor engagement and partnering economic transformation.