Editor’s choice
SEI was invited by the Swedish Ministry of Foreign Affairs to share research insights with representatives of the World Bank Group’s International Development Association (IDA) on the challenges and opportunities of increasing financing for sustainable development in low-income countries.
The discussion focused on IDA’s work in mobilizing and distributing funding for sustainable development, covering their approaches, instruments, processes and potential for collaboration. SEI’s Janet Vähämäki, Daniel Duma and Maximilian Bruder contributed their expertise.
The meeting convened experts from the Swedish Ministry of Foreign Affairs and IDA. A particular focus of the discussions was IDA’s Private Sector Window (PSW), which aims to catalyse private sector investment for sustainable development in low-income countries. This mission is shared by SEI’s Finance for Sustainable Development programme, which analyses investment decisions through a micro-economic lens. The programme seeks solutions to make sustainable economic activities financeable by different types of investors with varying risk and return expectations for the capital they deploy.
The dialogue fostered a rich exchange of insights for engaging private sector actors in sustainable economic activities. SEI presented findings from several research initiatives, such as its multi-year project on risk mitigation instruments for large renewable energy investments in Sub-Saharan Africa. Various approaches to risk mitigation were discussed, ranging from novel financial instruments to new technological solutions. Successful examples of using IDA’s PSW products in financing utility-scale renewable energy projects under challenging macroeconomic conditions in Malawi and Cameroon were shared, alongside recognition of the persistent challenges in scaling up the deployment of mitigation investments in the region.
Participants also focused on how development cooperation can become more inclusive and the role the private sector could play. They explored viable business models in contexts of deep poverty that can generate financial returns while also creating sustainable value for users and consumers. The role policymakers can play in fostering a conducive environment for private sector activities was discussed, as well as the need to involve local communities more explicitly in value-creating processes.
Another prominent theme was the role of measurement and quantifiable targets in development cooperation. Janet Vähämäki, drawing on insights from her new book, Obsessive Measurement Disorder or Pragmatic Bureaucracy?, detailed the fine line that policymakers and bureaucrats must walk in maintaining a balance between monitoring and evaluation activities that contribute to learning and policy development, and “obsessive measurement disorder”, where measuring indicators becomes an activity pursued for its own sake rather than serving a greater goal.
The meeting offered SEI researchers a platform to directly engage with policymakers and advise on facilitating investment flows in low-income country contexts, drawing on practical research insights and best practices for how sustainable economic activities can be brought to life in these contexts.
Program / Our mission is to help accelerate the allocation of capital to sustainable economic activities.
Past event / SEI's Finance for Sustainable Development team explored financing solutions for clean energy in Sub-Saharan Africa at this UN side event.
Feature / In their book, Obsessive Measurement Disorder or Pragmatic Bureaucracy?, authors Susanna Alexius and Janet Vähämäki explore the complexities of development aid.
Feature / A recent SEI workshop explored ways to boost private investment in Africa's energy sector through collaborative dialogue.
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