Financing for development: How can the EU make the best of FfD4?
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Dossier – Last updated on 11 June 2025
Fresh from a disappointing COP29 and with the abject failure of previous commitments looming over them, state representatives are to meet in Seville for the fourth Financing for Development conference (FfD4). It will take a great strategic effort not only to save the conference from the fate of its predecessors, but to correct the direction of development aid itself, which appears otherwise doomed to accelerating decline.
For Europe in particular, staying the course will not be enough. Bold action and clear priorities are needed to fulfil its development and strategic objectives.
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What is at stake?
The conference cannot be expected to reverse developmental backsliding – FfD4 and its predecessors are not designed to produce key binding decisions – but it is unique in joining topics typically approached in silos: for example, investment and debt. It will also steer global aspirations and expectations for the decade to come.
Most importantly, FfD4 is not only an opportunity to try and fix the system, but also to create and strengthen partnerships. It is in this context that Europe has the most opportunity to distinguish itself on key issues, including fair representation in multilateral institutions like the World Bank, reforms on fair and transparent financial regulation, and addressing the stifling global debt crisis.
Not doing so has a cost: it risks negatively impacting and further alienating partners that are essential to EU ambitions. Yet without defining clear objectives and an ambitious, unified strategy, the EU will struggle to form its alliances. So far this is missing.
ECDPM will be using the run-up to FfD4 to argue that Europe needs to define strategic objectives to strengthen alliances, address systemic issues and power imbalances and prioritise coherence, implementation and accountability. By demonstrating leadership to reinforce credibility, working closely with the African Group and promoting the role of private finance, the EU will be able to align development goals with its geostrategic objectives.
When is the Financing for Development 4 (FfD4) conference?
The major challenges to FfD4
The situation is precarious:
A growing finance gap: development needs far outstrip the supply of available development finance despite slight increases in aid as a result of conflicts, instability, debt, effects of climate change and more.
It is getting worse: development efforts are often failing to develop, with progress towards many sustainable development goals like zero hunger reversed.
The ability of emerging markets, developing economies (EMDEs) and donor countries to pay has reduced: this has a dramatic impact on the capacities to finance development needs. In Europe, besides fiscal constraint, development cooperation competes with other priorities such as defense, strategic autonomy and migration.
Frustration from recipient countries is high due to previous failed commitments and seemingly waning interest from richer countries. As a result, the forum risks falling into irrelevancy as states disengage.
US disengagement: The halt of USAID represents both a loss of confidence in the efficacy of development aid, as well as a rejection of development funding as a whole. US disengagement in FfD4 will also impact the level of ambitions of the outcome document. Yet, the world needs to go on, whether the US is supportive or not - and this is where regions like the EU can play a role.
The FfD4 negotiations so far
Summarising the main points of the zero draft:
- A renewed global financing framework for sustainable development addressing the urgent need for a large-scale investment push.
- Strengthening domestic fiscal systems and aligning them with sustainable development objectives, with international cooperation on tax and corruption.
- Engage private finance by promoting transparent and stable investment climates, and aligning private sector activities with sustainable development objectives.
- International development cooperation to reduce fragmentation, enhance the impact and quality of South-South and triangular cooperation, and strengthen the role of multilateral development banks.
- International trade: a universal, rules-based, non-discriminatory, transparent, open, fair, predictable, multilateral trading system with the WTO at its core.
- Strengthen debt management and transparency, with principles on responsible sovereign lending and borrowing.
- Systemic issues need to be addressed in the international financial architecture, including global economic governance, the global financial safety net, and international financial regulation.
- Science, technology, and innovation are prioritised, with capacity building for sustainable development, bridging digital divides and promoting access for women, youth, and children.
- Data, Monitoring and Follow-up: it requests a concise set of financing indicators to measure progress and implementation.
- Meeting the needs of countries in Special Situations, e.g. African countries and small island states.
Key changes in the first draft (March 10):
- Overall, most concrete deliverables from the zero draft were retained, and some new ones added, but progress on making general political commitments actionable remains limited. The SDG financing gap is now explicitly stated as $4 trillion per year.
- The preamble was rewritten with a focus on reversing ODA reductions, more emphasis on South-South Cooperation and MDBs.
- Private Finance language was often "watered down", such as shifting from sustainability disclosure legislation to standards.
- The Debt and Debt Sustainability chapter was edited to better reflect World Bank and IMF perspectives.
Since the first draft:
- Climate finance has emerged as a major point of contention, with a demand for additional financial commitments from developed nations for climate adaptation and mitigation, separate from existing ODA.
- Debt restructuring and relief remains a critical battleground, with some advocating for a greater role for the UN, which has been met with reservations from some developed countries who prefer to keep such discussions within existing forums like the G20 and the Paris Club.
- The role and governance of international financial institutions like the World Bank and the International Monetary Fund (IMF) are also under scrutiny. Developing countries are advocating for a greater voice and representation in the decision-making processes of these institutions, reflecting a desire to reshape the global financial architecture to be more equitable and responsive to their needs
- Civil society organizations have criticised what they perceive as a lack of ambition in addressing systemic issues and have called for greater transparency and accountability in the negotiations.
Our work on FfD3
ECDPM has been working on financing for development for over a decade. Find our work on the previous conference:
