Linking policy and practice in international cooperation

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ECDPM event

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Roundtable

Risk management reconsidered: How to get the incentives right for private sector engagement in developing countries?

Start:
22 April 2016 1:30 pm
End:
22 April 2016 4:30 pm

The roundtable event, organised by ECDPM with the Center for Global Development (CGD), will bring together analysts, development finance practitioners, stakeholders from a spectrum of development finance institutions, and policymakers with a durable public and private finance experience for a series of brief, focused presentations and a constructive, curated discussion.

Please find the invitation and agenda here 

Please click here to register

Watch the video of the meeting – starts at minute 22:

The Addis Ababa Action Agenda mentions ‘private sector’ as many times as it mentions ‘international cooperation.’ This exemplifies the growing consensus that delivering on the Sustainable Development Goals (SDGs) requires a stronger engagement of the private sector. However, investors are often reluctant to work in developing countries because of perceived risks. As a result, cost and risk-sharing public mechanisms have become an important means to leverage private finance for frontier markets.

These new priorities imply challenging new questions for policymakers, including:

  • Are current approaches effective and sufficient?
  • What has been the experience so far?
  • What should be the role of development finance institutions (DFIs) to incentivise the private sector and mitigate risk?
  • Are the risk-sharing and mitigation instruments in place adequate, do they need to be scaled up, or do we need to explore new contracts and incentive structures?

The event will:

  • Highlight the risk-sharing instruments (including equity stakes, concessional debt financing, and guarantees) that DFIs use to ‘crowd in’ investment and mitigate risk for the private sector.
  • Challenge institutions to investigate new and different ways to use public development capital to work with the private sector.

Papers discussed at this event include:

Commons Consultants. 2015. The Pitfalls of Innovative Private Sector Financing: Emerging lessons from benchmarking of investment funds supported by aid agencies. Copenhagen: Commons Consultants.

Barder, O., Talbot, T. 2015. Guarantees, Subsidies, or Paying for Success? Choosing the Right Instrument to Catalyze Private Investment in Developing Countries. (Working Paper 402). Washington: Center for Global Development.

 

 

Location

ECDPM Brussels Office
Rue Archimède 5
B-1000
Brussels
Belgium

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