MULTILATERAL development banks (MDBs) said they are working to put together a joint fund to attract more private investment into developing economies.
In a joint statement following their meeting in Manila on Oct. 17, the heads of 10 such banks said they made progress toward launching the fund after consulting leading global asset managers to assess demand for a diversified portfolio of assets originated by development banks.
The proposed fund is part of the banks’ “originate-to-distribute/share” initiative, which aims to give institutional investors greater access to such assets, thereby attracting more private financing.
The bank officials met at the Asian Development Bank (ADB) headquarters in Manila to discuss ways to expand financing for developing countries facing conflicts, disasters, economic challenges and limited fiscal space.
The banks also cited capital adequacy reforms and financial innovations implemented since 2023 that have expanded their combined lending capacity by $792 billion over the next decade.
The banks also welcomed the adoption of an updated method for measuring private capital mobilization, with reporting under the new framework set to begin in 2027.
Meanwhile, the officials called for more local-currency financing and measures to address foreign-exchange risk to reduce currency mismatches and develop domestic financial markets in emerging economies.
They stressed the importance of maintaining highly concessional financing for the poorest and most vulnerable countries.
Beyond financing reforms, the banks also discussed cooperation on critical minerals, climate, water, artificial intelligence and nuclear energy.
The banks also reported efforts to align their policies and procedures to avoid duplication and make joint financing easier for borrowing countries.
The European Investment Bank is set to chair the MDB Heads Group in 2027, taking over from the ADB, which chaired the group this year under President Masato Kanda.
The joint statement was issued by the heads of the African Development Bank Group, the Asian Development Bank, the Asian Infrastructure Investment Bank, the Council of Europe Development Bank, the European Bank for Reconstruction and Development, the European Investment Bank Group, the Inter-American Development Bank Group, the Islamic Development Bank, the New Development Bank, and the World Bank Group. — Justine Irish D. Tabile