Top 10 clean energy financing institutions 2014

A development financial institution (DFI), also known as a development bank or development finance company (DFC), is a

financial institution Financial institutions, sometimes called banking institutions, are business entities that provide services as intermediaries for different types of financial monetary transactions. Broadly speaking, there are three major types of financial inst ...

that provides

risk capital A capital requirement (also known as regulatory capital, capital adequacy or capital base) is the amount of capital a bank or other financial institution has to have as required by its financial regulator. This is usually expressed as a capital ad ...

for economic development projects on a non-commercial basis. , total commitments (as loans, equity, guarantees and debt securities) of the major regional, multilateral and bilateral DFIs totaled US$45 billion (US$21.3 billion of which went to support the private sector).

Mandate

DFIs can play a crucial role in financing private and public sector investments in developing countries, in the form of higher risk loans, equity positions, and guarantees.Dirk Willem te Velde and Michael Warner (2007
Use of subsidies by Development Finance Institutions in the infrastructure sector

Overseas Development Institute ODI (formerly the 'Overseas Development Institute') is a global affairs think tank, founded in 1960. Its mission is "to inspire people to act on injustice and inequality through collaborative research and ideas that matter for people and the ...

DFIs often provide finance to the private sector for investments that promote development and to help companies to invest, especially in countries with various restrictions on the market. Some development banks include

socially responsible investing Socially responsible investing (SRI), social investment, sustainable socially conscious, "green" or ethical investing, is any investment strategy which seeks to consider both financial return and social/environmental good to bring about soc ...

and

impact investing Impact investing refers to investments "made into companies, organizations, and funds with the intention to generate a measurable, beneficial social or environmental impact alongside a financial return". At its core, impact investing is about an a ...

criteria into their mandates. Governments often use development banks to form part of their

development aid Development aid is a type of foreign/international/overseas aid given by governments and other agencies to support the economic, environmental, social, and political development of developing countries. Closely-related concepts include: develop ...

economic development In the economics study of the public sector, economic and social development is the process by which the economic well-being and quality of life of a nation, region, local community, or an individual are improved according to targeted goals and ...

initiatives.

Climate financing

As of November 2020, development banks and private finance had not reached the $100 billion USD per year investment of climate financing stipulated in the UN climate negotiations for 2020. However, in the face of the COVID-19 pandemic's economic downturn, 450 development banks pledged to fund a " Green recovery" in developing countries.

Ownership

DFIs are often established and owned by governments or

nonprofit organization A nonprofit organization (NPO) or non-profit organisation, also known as a non-business entity, not-for-profit organization, or nonprofit institution, is a legal entity organized and operated for a collective, public or social benefit, in co ...

s to finance projects that would otherwise not be able to get financing from commercial lenders.

Typology

DFIs include

multilateral development bank An international financial institution (IFI) is a financial institution that has been established (or chartered) by more than one country, and hence is subject to international law. Its owners or shareholders are generally national governments, al ...

national development bank A national development bank is a development bank created by a country's government that provides financing for the purposes of economic development of the country. List of development banks Americas * Business Development Bank of Canada * Brazili ...

s, bilateral development banks, microfinance institutions,

community development financial institution A community development financial institution (US) or community development finance institution (UK) - abbreviated in both cases to CDFI - is a financial institution that provides credit and financial services to underserved markets and populations, ...

and revolving loan funds.Andrea Levere, Bill Schweke, and Beadsie Woo, Development Finance and Regional Economic Development, Washington, DC: CFED, July 2006 Development banks include: * Community development banks which fund low-income areas in the United States *

International financial institutions An international financial institution (IFI) is a financial institution that has been established (or chartered) by more than one country, and hence is subject to international law. Its owners or shareholders are generally national governments, a ...

conducting development-oriented finance on a bilateral or multilateral basis *

National development bank A national development bank is a development bank created by a country's government that provides financing for the purposes of economic development of the country. List of development banks Americas * Business Development Bank of Canada * Brazili ...

s are government-owned financial institution that provides financing for economic development. *

Multilateral development bank An international financial institution (IFI) is a financial institution that has been established (or chartered) by more than one country, and hence is subject to international law. Its owners or shareholders are generally national governments, al ...

are development banks set up by a group of countries and often operate under international laws.

References

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Mandate

Climate financing

Ownership

Typology

See also

References