Ideas to Action:

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CGD Policy Blogs

 

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The IMF’s New Resilience and Sustainability Trust: Demystifying the Debate over Upper Credit Tranche Conditionality

A new allocation of special drawing rights (SDRs), a reserve asset from the IMF, has been issued and are already being put to work by governments around the world eager to respond to the impact of COVID-19. But a significant portion of those SDRs are currently held by high-income countries that don’t need them, which has spurred a push to recycle them to where they’re most needed.

A wind turbine farm in Tunisia

Rethinking the World Bank Model for More Climate Financing

The fact is $100 billion a year is woefully insufficient to cover the cost of climate change adaptation, let alone financing clean energy transitions across the developing world. The adaptation price tag alone could reach $300 billion a year by 2030. According to the IEA, the cost of financing clean energy transitions could exceed $1 trillion a year by the end of the decade. These are big numbers. But they are achievable.

An image of the seas off the coast of Belize.

Belize’s Big Blue Debt Deal: At Last, A Scalable Model?

Last Friday, the Government of Belize alongside the U.S. Development Finance Corporation (DFC) and the Nature Conservancy (TNC) announced the financial close of the largest blue bond for Ocean Conservation to date. The program enables Belize to convert its existing Eurobond (i.e. foreign currency bonds issued on the international market) into blue debt that it will use to implement its national marine conservation agenda.

An image of a digital map.

Are Development Finance Institutions Getting Too Much of the Aid Budget?

As the world confronts the aftermath of the COVID-19 pandemic, resources to assist developing countries recover and make the transition to a green and equitable future are scarce—scarcer than before the pandemic, given donors’ own budgetary constraints and the slowdown in global GDP growth. If there’s one thing that’s clear, it’s that whatever public financing is available must be used well.

Lagos to Mombasa

Lagos to Mombasa: How Do We Accelerate EU-Africa Investment?

CGD’s Mikaela Gavas joins Gyude to discuss barriers to private investment in health and infrastructure projects and how a new initiative—an Accelerator Hub—could help local businesses and institutions in Africa develop financially viable proposals and connect them with investors.

An image of the skyline in Nairobi

How to Strengthen the Role of Pan-African Institutions Within the International Financial Architecture

In a recent joint piece, African and European leaders underscored the importance of strengthening the positions and roles of pan-African institutions within a new international financial architecture, reaffirming one of the four key goals of the summit on financing African economies held last May in Paris. What is the new international financial architecture? Which pan-African institutions are targeted and why should their role and positions be strengthened within it? How should Africa and its partners proceed to achieve this goal?

A graphic of financial markets

The Case for Liquidity Support for Frontier Markets

The puzzle for development finance experts has been that the capital flows from developed financial markets to developing countries are nowhere large enough to meet financing needs for the Sustainable Development Goals (SDGs), even if official assistance were to be ramped up significantly. Cyclically low investment returns in the developed world should make investment in developing countries quite attractive, yet investments in frontier markets, particularly in Africa, do not begin to meet the development needs of these countries.

An image of a lightbulb with coins.

MDBs Could Do More to Build Markets Just By Releasing More Data

You may have missed a recent dry-sounding but groundbreaking report, Default Statistics: Private and Sub-Sovereign Lending 2001-2019. It summarizes data from the Global Emerging Markets (GEMs) Risk Database for a set of 11 multilateral development banks (MDBs) and development finance institutions (DFIs) on default rates on their credits to private and sub-sovereign borrowers, which accounted for 82 percent of exposure in 2019.

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