Multilateral Development Banks (MDBs) released a summary of outcomes from a Working Group focused on scalable solutions to increase private capital mobilization. Key goals include expanding local currency lending and improving access to foreign exchange (FX) risk hedging—critical for sustainable economic development.
The group outlined four areas of action:
1. Exploring ways for MDBs to use their capital to take on more market and credit risk to support local currency lending.
2. Supporting domestic capital market development through advisory services and pilot projects.
3. Making FX risk hedging solutions more affordable and accessible.
4. Strengthening resources, capabilities, and complementary actions at international and national levels.
Future areas of work in this agenda include assessing current approaches for scalability, improving coordination in market development, and establishing a Policy Forum for deeper collaboration.
This initiative delivers on the MDB Viewpoint Note (April 2024) and aligns with the Roadmap for Better, Bigger, and More Effective MDBs, endorsed by the G20 under Brazil’s leadership. The outcomes will inform future discussions under South Africa’s G20 presidency and the 4th International Conference on Financing for Development in 2025, as MDBs scale up private sector engagement to tackle global development challenges.
See the summary in this link.
About the IDB
The Inter-American Development Bank (IDB) is devoted to improving lives in Latin America and the Caribbean. Established in 1959, the IDB partners with the public sector in the region to design and provide innovative, high-impact solutions for sustainable and inclusive development. Through financing, technical experience, and knowledge, it drives growth and well-being in 26 countries. Visit our website at https://www.iadb.org/en.
Molina Medina,Vanessa Carolina
Multilateral Development Banks: Working as a System for Greater Impact and Scale
Multilateral Development Banks (MDBs) are evolving, individually and collectively, to respond to these challenges and improve people’s lives by becoming a bigger, better and more effective MDB system.
Financial Markets
Working with the public sector to design funding solutions that mobilize private investments and ensure inclusive and sustainable development. As well as improve access to formal financial systems by groups including women-owned businesses, rural populations and micro, small and medium enterprises.