Unlocking the power of private finance
Mobilizing private capital for sustainable development has become a priority for governments and development agencies around the world. For there to be any possibility of achieving the ambitious Sustainable Development Goals (SDGs) by 2030, as much as USD 2.5 trillion (Ministry of Foreign Affairs Denmark, 2018) in private financing worldwide is required per annum to supplement local tax and fee revenues and official development assistance.
Over the past decade, relevant new strategies and tools for leveraging and deploying capital have been generated in two, mostly separate, fields of practice. The first involves innovative forms of financing that use funds and other vehicles to blend private and public capital in the service of development objectives. The second field of practice is known as impact investing, where investments are made with the intention of achieving a social or environmental impact as well as a financial return.