This presentation provides: i) an overview of the 2030 Agenda and the Sustainable Development Goals (SDGs), ii) the order of magnitude of the associated financing needs, iii) the sources of development finance, focusing on iv) Multilateral Development Banks (MDBs) and their financing instruments, and v) a comparison of the major MDBs. It is targeted at both laypeople and professionals and seeks to convey a “big picture” of what Development Finance is, why the SDG period (2016-2030) is different from the MDG period (2000-2015), and what the role of different MDBs could be in achieving the 2030 Agenda.

1. THE ROLE OF MULTILATERAL DEVELOPMENT BANKS
(MDBS) IN THE 2030 AGENDA
Marc-Anton Pruefer
Financing for Development - MOOC
December 8, 2015

2. Content
1) The 2030 Agenda
2) Investment needed to achieve the Sustainable
Development Goals (SDGs)
3) Sources of Development Finance
4) How MDBs Finance Development
5) Overview of major MDBs
2

3. 1. The 2030 Agenda
3
2015: A historic year for Development Finance
UN Sustainable Development Summit:
adoption of 2030 Agenda for Sustainable Development, which includes a
set of 17 Sustainable Development Goals (SDGs)
Third International Conference on Financing for Development:
Addis Ababa Action Agenda (AAAA) as a “policy framework to realign
financial flows with public goals” (UN, 2015, p. 5)
UN Conference on Climate Change (COP21):
further goals and frameworks with emphasis on climate change

4. 1. The 2030 Agenda
4
The Sustainable Development Goals (SDGs)
More ambitious than Millenium Development Goals (MDGs)
Apply to all countries (low, middle and high income)
Include infrastructure, energy, urban development, climate change,
sustainable consumption, innovation, etc.

5. 2. Annual investment needed to achieve the SDGs
5
Order of magnitude by sector
Source: United Nations, 2014, p. 6

6. 3. Sources of Development Finance
6
Source: United Nations, 2014, p. 15

7. 3. Sources of Development Finance
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National Public Finance
s
Domestic Resource Mobilization (DRM) provide largest resource
amounts to fund national development plans (NDPs) in most countries
DRM of emerging and developing countries reached US$ 7.7 trillion in
2012, up over US$ 6 trillion from 2000
However, tax revenue as a percentage of GDP in low and middle
income countries is still lagging

8. 3. Sources of Development Finance
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Source: WBG, 2013, p.9
Tax revenue (as a percentage of GDP) by country income group 1994-2009

9. 3. Sources of Development Finance
9
National Private Finance
t
Domestic companies and financial institutions play a crucial role,
but challenges include:
Lack of long-term corporate bond markets
Underdeveloped financial markets
Inadequate risk/return profiles of investment opportunities
Governments to provide conducive investment climate
Public Private Partnerships (PPPs)

10. 3. Sources of Development Finance
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International Private Finance
a
These flows mainly consist of:
a
Foreign Direct Investment (FDI), which constitutes the biggest share of flows to
developing countries overall*
Remittances, which exceed Official Development Assistance (ODA)*
Institutional Investors (Investment Funds, Insurance Companies and Pension
Funds) are not strongly represented, but have immense potential
* Together amounting to US$778 billion in 2013 (in developing countries)

11. 3. Sources of Development Finance
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Source: WBG, 2013, p.30
Total Assets of Institutional Investor in the OECD 1995-2011(US$ trillions)

12. 3. Sources of Development Finance
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International Public Finance
f
Official Development Assistance (ODA) and other grants aimed
primarily at the economic development of developing countries reached
a historic high of US$ 135 billion in 2013
a
Over the MDG period Multilateral Development Banks (MDBs)*
support grew from US$ 50 billion to US$ 127 billion annually
During the first three years of the SDG period (2016-18) MDBs plan
financial support of over US$ 400 billion
These resources catalyze, mobilize and crowd in additional public and
private resources for development
*African Development Bank (AfDB), Asian Development Bank (AsDB), European Bank for Reconstruction and Development (EBRD),
European Investment Bank (EIB), Inter-American Development Bank Group (IDBG), and the World Bank Group (WBG)

13. 4. How MDBs Finance Development
Source: MDBs and IMF, 2015a, p. 3
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14. 5. Overview of major MDBs
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Source: IFC, 2015, p. 15

15. References
IFC, 2015. Investing for Impact - IFC Investor Pitchbook. International Finance Corporation (IFC).
[online] Available at:
http://www.ifc.org/wps/wcm/connect/0d415600471da004ba57fe57143498e5/FY16+Investor+
Presentation_Oct+2015.pdf?MOD=AJPERES
MDBs and IMF, 2015a. From Billions to Trillions: MDB Contributions to Financing for Development.
AfDB, AsDB, EBRD, EIB, IDBG,WBG and IMF. [online] Available at:
http://pubdocs.worldbank.org/pubdocs/publicdoc/2015/7/69291436554303071/dfi-idea-
action-booklet.pdf
MDBs and IMF, 2015b. From Billions to Trillions: Transforming Development Finance Post-2015:
Financing for Development: Multilateral Development Finance. AfDB, AsDB, EBRD, EIB, IDBG,WBG and
IMF. [online] Available at: http://siteresources.worldbank.org/DEVCOMMINT/
Documentation/23659446/DC2015-0002%28E%29FinancingforDevelopment.pdf
UN, 2014. Report of the Intergovernmental Committee of Experts on Sustainable Development
Financing. New York, NY: United Nations (UN)
UN, 2015. Report of the Secretary General: Outcome of the Third International Conference on
Financing for Development. [online} Available at: http://www.un.org/esa/ffd/wp-
content/uploads/2015/08/70GA_SGR_FfD-3_outcome_AUV_12-08-15.pdf
WBG, 2013. Financing for Development Post 2015. Washington, DC: World Bank Group (WBG)
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