NEW YORK, Jun 16 (IPS) – Geopolitical tensions – from deepening rivalries between major powers to regional conflicts – have placed acute pressure on the international development agenda. Development assistance from major funders has been on the decline. The world is becoming more unpredictable.
The following piece explores the urgent need to mobilize private capital in support of sustainable development – particularly in advance of the upcoming Fourth International Conference on Financing for Development (FfD4), taking place in Sevilla, Spain from June 30 to July 3.
Meanwhile the International Business Forum will be held alongside FFD4. Organized by the FFD4 Business Steering Committee, it will bring together Heads of State, Ministers, CEOs, and prominent global business leaders to drive solutions that unlock private finance and investments for sustainable development.
Today, capital is not flowing to where sustainable and development finance is most needed. In developing markets, the sustainable development financial shortfall is estimated to be around USD 4 trillion annually, with investment lacking in areas including critical basic infrastructure and access to water.
To address this funding gap, every stakeholder must come to the table in recognition of the fact that global challenges, including poverty, pandemics and social inequality don’t respect borders. Collaboration is needed now more than ever, and of all the convenings taking place this year, the UN’s Fourth International Conference on Financing for Development(FFD4) in Sevilla, Spain from June 30-July 3 will facilitate the collaboration needed at the highest levels across the public and private sectors.
The private sector has an indispensable role to play in helping to deliver capital to solutions at scale. Public-private partnerships can multiply the impact of development spending, whether co-investing in clean infrastructure or delivering essential services in hard-to reach areas. Yet, private capital all too often remains on the sidelines of global development funding.
The reason for this is well known. As World Bank President Ajay Banga recently noted, “Private investment flows only where the right conditions exist and where there’s a clear probability of return.” So, we need to urgently create these conditions, putting in place the reforms necessary and creating investable opportunities that will allow capital to flow.
On the demand side, more must be done to translate high level national ambitions and transnational agendas into investable opportunities that align and channel private capital into developing markets.
Solutions, such as funds that invest in the development of project pipelines and platforms that pool investment capital across a range of projects, will help scale the mobilization of private capital by making more projects bankable and providing institutional investors with predictable returns.
We should also embrace innovative approaches to finance, such as Indonesia’s green sukuk bonds and the Barbados debt-for-climate swaps.
On the policy side, regulatory fixes are necessary to address prudential regulations that misprice the benefits of guarantees and the risk of infrastructure investment in emerging markets, creating artificial and unnecessary barriers to investment.
More can also be done to mitigate local currency exchange risk – the mismatch between investments made in hard currencies for projects that operate in more volatile local currencies.
These reforms, supported by the greater use and enablement of technology to overcome the financing gap for small and medium enterprises in emerging markets, will create a pathway to de-risk and unlock the investment opportunities, facilitating the flow of capital at scale.
The International Business Forum at FFD4, of which we three serve as the co-chairs, will provide this year’s – if not this decade’s – best opportunity for stakeholders to come together to set out and deliver a new path for public-private partnerships, one that supports these and other common-sense solutions to unlock investment for developing markets.
We ask you to join us alongside heads of government in Seville at FFD4, to inform negotiations and advance practical solutions. The private sector has both the means and motive to act – and if it does, can shape a path for sustainable and enduring global growth.
Now is the time to join us, to build an equitable and resilient future for all.
The authors serve as the Co-Chairs of the FFD4 Business Steering Committee. Mr. Denton is the Secretary-General of the International Chamber of Commerce and a board member of IFM Investors. Mr. Viñals and Ms. Kamdani serve as Co-chairs of the Global Investors for Sustainable Development Alliance, and Mr. Viñals also served as the Group Chairman of Standard Chartered and Ms. Kamdani is the CEO of Sintesa Group.
More information about the FFD4 International Business Forum can be found here.
IPS UN Bureau
© Inter Press Service (2025) — All Rights Reserved. Original source: Inter Press Service
