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Business and development leaders press for scaled blended finance to unlock private capital for SDGs
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Summary
Speakers at the International Business Forum at FFD4 in Seville urged governments, multilateral development banks and the private sector to expand blended finance, reform risk frameworks and prepare bankable pipelines so private investment can close the estimated financing gap to meet the Sustainable Development Goals.
At the International Business Forum convened alongside the fourth International Conference on Financing for Development (FFD4) in Seville, public- and private-sector leaders called for scaled blended finance and policy reforms to mobilize private capital for the Sustainable Development Goals.
The most urgent message came from United Nations Secretary‑General António Guterres: “More investment is needed. More investment is needed,” he said, noting that foreign direct investment to developing countries has dropped from about 5% of GDP in 2008 to roughly 2.3% in 2023. Prime Minister of Spain Pedro Sánchez and other speakers framed private investment as central to addressing climate change, poverty and jobs while calling for reforms to the international financial architecture and new de‑risking instruments.
Why it matters: private capital currently falls short of the scale required to reach the 2030 SDG targets. Speakers cited an estimated financing gap of about $4 trillion and said that without coordinated action — including guarantees, blended finance instruments, stronger project preparation and regulatory updates — investments will continue to bypass many low‑ and middle‑income countries.
Panelists and business representatives outlined specific levers to expand flows. John Denton, secretary general of the International Chamber of Commerce, urged updates to global prudential rules and anti‑money‑laundering frameworks so institutional investors can reallocate risk weightings and find more “investable” projects. “We are not here to pledge. We are here to deliver,” Denton said.
Multilateral development bank (MDB) leaders and finance ministers described complementary roles. Masato Kanda, president of the Asian Development Bank, said ADB will increase private‑sector mobilization and invest upstream in policy reforms and governance to create bankable markets. Nirmala Sitharaman, India’s finance minister, described India’s experience scaling solar capacity and urged improvements to domestic financial markets, independent regulators and clearer procurement to attract institutional investors.
Speakers recommended a three‑part approach repeated across remarks: reduce and share risks (guarantees, first‑loss capital, insurance), prepare and scale investable pipelines (project preparation facilities, feasibility studies, standardized contracts), and reform global rules that raise the cost of capital (credit rating methodologies, Basel‑era prudential guidance, cross‑border regulatory friction).
Private financial leaders described what they can bring: structuring expertise, underwriting capacity and data systems. Jose Vínales of Standard Chartered and Xu Gu of the Agricultural Bank of China emphasized tools such as blended finance, sovereign green bonds and ESG‑linked underwriting; Xu highlighted the need for accurate emissions and scope‑3 data from clients to manage portfolio risk. James Mwangi of Equity Bank described blended approaches in agriculture — combining philanthropic capital, credit‑risk sharing and climate‑smart loans — to move smallholders from subsistence to value‑added markets.
Multilateral and regional examples were presented as models. Ilan Goldfajn of the Inter‑American Development Bank described platforms that combine concessional capital, guarantees and project preparation to mobilize private investment (he cited a program that has mobilized several billion dollars regionally). Odile Renaud‑Basso of the European Bank for Reconstruction and Development and others urged platform‑based, country‑level pipelines rather than bespoke, project‑by‑project deals to accelerate scale and attract repeat investment.
Obstacles and cautions: speakers repeatedly warned that concessional resources are limited and must be used with “additionality” — targeted to correct market failures rather than substitute for private capital. Several panelists also noted governance and regulatory clarity are prerequisites: private investors need predictable policies, transparent bidding and contract standards, and reliable dispute resolution to commit long‑term capital.
What’s next: forum organizers and some MDBs announced work to improve publicly available risk data and country platforms to help investors assess real, rather than perceived, sovereign and project risk. Panelists urged that the coming months be used to move from commitments to demonstrable projects — scaling blended structures and aligning national strategies with investor pipelines ahead of COP events and other global finance meetings.
The forum ended with repeated appeals to “scale action, work in partnership and use time wisely,” reflecting a broad consensus among speakers that faster, better‑designed blended finance and upstream reform are essential for mobilizing private capital at the scale the SDGs require.
