Innovative finance mechanisms are more and more needed in view of the challenges ahead. It is estimated that in order to achieve the Sustainable Development Goals (SDGs), investments of USD 2.5 trillion per year will be required in emerging countries alone. About 35% of annual funding is being bridged by public resources from development (finance) institutions and national governments leaving at least 65 % of the gap that would need to be covered by other, potentially new sources of capital capital. At the same time there is a growing consensus the international development finance community that the challenge is not only about the quantity of capital required but also about ensuring that the capital raised matches local needs, is investing for maximum effective and strengthens local (capital) markets. Innovative financing is about mobilising additional (private) capital and deploying capital more effectively and efficiently.
In view of above challenges, interest in mechanism that blend capital across the spectrum of capital and combine financial instruments in new ways have increased significantly in recent years. And yet, the engagement of European providers of impact capital in initiating developing innovative finance mechanism, using their capital catalytically to mobilise private capital for impact or co-investing with development agencies has remained limited.
The objective of this E-Talk is to create more awareness and explore what role the European investing for impact community could play in innovative finance for sustainable development. We will provide a brief introduction into the growing field of innovative finance and present recent developments on two selected innovative finance families namely, outcome based finance and structured funds and discuss entry points engagement opportunities for the European investing for impact community.
The event is the first of a series of EVPA events on investing for development.
