Seville: A coalition of governments, international development partners, and private sector groups announced the development of an Action Plan to increase the mobilization of private sector capital at scale in developing countries. The announcement was made at the Fourth Financing for Development Conference (FfD4) in Seville, Spain, where the coalition outlined their strategy to address critical global challenges.
According to Ethiopian News Agency, the coalition includes notable entities such as the UN Capital Development Fund, UN Economic Commission for Africa, African Union Commission, Organisation for Economic Cooperation and Development (OECD), and Global Investors for Sustainable Development (GISD) Alliance. Additional support comes from the Ministry for Foreign Affairs of Finland, Norway Ministry of Foreign Affairs and Norad, Switzerland SECO, and Convergence Blended Finance, all of whom are committed to launching the Action Plan focused on developing countries.
The Action Plan aims to tackle issues
such as poverty, economic growth, and climate risks by using public sector resources through blended finance to attract private investment in underserved markets. Despite a surge in global wealth over the past decade, investment in these markets has lagged. The plan includes a special track for Least Developed Countries (LDCs) and Africa, focusing on tailored blended finance approaches and scalable investment opportunities in critical sectors.
The plan will detail practical measures to mobilize private investment utilizing standardized and replicable blended finance models, ensuring alignment with national priorities and global development goals. This initiative is part of FfD4’s efforts to renew the global financing framework and address the financing gap in developing countries.
The Organisation for Economic Cooperation and Development (OECD), a co-proposer of the Action Plan, noted a decline in Official Development Assistance (ODA) by over 7% last year compared to 2023. Claver Gatete, Executive Secretary
of the UN Economic Commission for Africa (UNECA), emphasized the importance of the Action Plan, stating that it represents a pivotal moment for directing global capital towards sustainable development in critical regions.
Despite the doubling of global assets to $482 trillion over the past decade, private sector investment in low- and middle-income countries remains minimal, with only 5% of these assets directed towards developing countries, excluding China. The Financial Stability Board highlights this as a significant barrier to sustainable development.
The world is at a crucial juncture, facing an annual financing gap of $4 trillion, a rise from the pre-pandemic figure of $2.5 trillion, as reported by ECA. Blended finance emerges as a transformative solution to enhance private investment flows, contributing positively to the FfD4 Outcome Document’s mobilization objectives and the Sustainable Development Goals (SDGs).
Signatories of the Joint Initiative have pledged to create an ‘effective, efficient, fa
ir, and practical action plan’ through the end of 2025 and into 2026. The objective is to leverage a combination of public sector and philanthropic resources to significantly increase private sector finance for large-scale development results.