‘Private sector should be at the centre of development banks’ sustainability efforts’
New Delhi: Development banks should change their approach to bring private sector into the centre of efforts to mobilize finance for sustainable development strategies, according to the independent panel that advise G20 nations on improving the balance sheets of multilateral institutions. In a report titled ‘Strengthening multilateral development banks-the triple agenda’ presented to the G20 finance ministers and central bank governors, a nine-member committee argued that development banks should engage with the private sector in a new way, including by co-creating investment opportunities and programmes.
Fifteenth Finance Commission chairperson NK Singh and former US Treasury Secretary Lawrence Summers were the co-convenors of the panel. Development banks should also prioritize support for helping governments reduce policy and regulatory risk that impedes private investment, the report shared with the G20 nations said.
Making a strong case for development banks to partner with the private sector, the committee said that there is considerable innovation and energy behind new ways of attracting private capital into sustainable infrastructure, and development banks must complement, rather than compete with, these efforts. The panel noted that today, multilateral development banks only mobilise $0.6 in private capital for each dollar they lend on their own account.
“They should aim to at least double this target," the report said. Private sector capital mobilzsation requires a fundamentally different approach.
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