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A strong private sector is a driver for economic development. Businesses need funding to grow and contribute to their local environment and communities.
Development Finance Institutions (DFIs)
Development Finance Institutions (DFIs) are specialised development organisations that are usually majority owned by national governments. DFIs invest in private sector projects in low and middle-income countries to promote job creation and sustainable economic growth. They apply stringent investment criteria aimed at safeguarding financial sustainability, transparency, and environmental and social accountability.
DFIs can be bilateral, serving to implement their government’s foreign development and cooperation policy, or multilateral, acting as private sector arms of International Finance Institutions (IFIs) established by more than one country.
DFIs source their capital from national or international development funds or benefit from government guarantees which ensures their credit-worthiness. The financial support they bring to relatively high-risk projects helps mobilising the involvement of private capital, bringing in such diverse actors as commercial banks, investment funds or private businesses and companies.
CSIS, in partnership with EDFI, wrote a report in 2016 on trends in development finance for the private sector. This report is the result of a research project that has looked at the role of DFIs in the new global development policy landscape. It explores the significant shifts that have taken place, while also looking at where DFIs fit in this evolving architecture. You can read and download the report here.
EDFI, the association of 15 european bilateral development finance institutions
Several multilateral DFIs work at regional level such as the African Development Bank (AFDB), the Asian Development Bank (ADB), the European development Bank for reconstruction and Development (EBRD), the European investment Bank (EIB) and, at global level, the International Finance Corporation (IFC).
Read EDFI’s Flagship Report for more information.
Mission
EDFI member institutions are focused on the development of private sector enterprises and operate in developing countries and emerging economies. They are mandated by their governments to contribute to the SDGs by creating jobs, boosting growth, fighting poverty and climate change. Although EDFI members have slightly different mandates and strategies, they are guided by a common ambition: “To improve people’s lives – for current and future generations – in countries where the need is the strongest, through the engine of private sector growth.”
Vision shared by European DFIs
A world where the private sector offers people in low- and middle-income countries opportunities for decent work and improved lives, and where private investment flows are aligned with the Sustainable Development Goals and the Paris Climate Agreement.
Mission of the EDFI Association
To promote the joint interests of the members, inform policy, and drive innovation in industry standards.
Core values of our industry
Responsible
Sustainable
Impact-driven
- Trusted
- Transparent
History
DFIs emerged right after WW2. CDC was established in 1948, DEG in 1962, IFU in 1967, and FMO in 1970. Gradually, more and more countries considered ways to support private sector investments in developing countries and subsequently decided to set up their own DFI.
Mission
EDFI member institutions are focused on the development of private sector enterprises and operate in developing countries and emerging economies. They are mandated by their governments to contribute to the SDGs by creating jobs, boosting growth, fighting poverty and climate change. Although EDFI members have slightly different mandates and strategies, they are guided by a common ambition: “To improve people’s lives – for current and future generations – in countries where the need is the strongest, through the engine of private sector growth.”
Vision shared by European DFIs
A world where the private sector offers people in low- and middle-income countries opportunities for decent work and improved lives, and where private investment flows are aligned with the Sustainable Development Goals and the Paris Climate Agreement.
Mission of the EDFI Association
To promote the joint interests of the members, inform policy, and drive innovation in industry standards.
Core values of our industry
- Responsible
- Sustainable
- Impact-driven
- Trusted
- Transparent
History
DFIs emerged right after WW2. CDC was established in 1948, DEG in 1962, IFU in 1967, and FMO in 1970. Gradually, more and more countries considered ways to support private sector investments in developing countries and subsequently decided to set up their own DFI.
In 1992, seven European DFIs agreed to establish the Association of European Development Finance Institutions (EDFI) to strengthen cooperation and to facilitate knowledge-sharing and learning. Other institutions progressively joined the Association, which today represents fifteen members. EDFI remains open to new members. Please visit the members section for more information on the eligibility criteria.
EDFI aims to play an important role in helping members respond to the new development paradigm by stepping up its communications and adding more resources. EDFI has also established a new Management Company in 2016, which already manages ElectriFI and AgriFI , EU-funded facilities to support renewable energy and sustainable agriculture.
Governance
EDFI asbl is a non-profit association, registered in Belgium in 1992. Its legal bodies are defined in its bylaws Download . EDFI’s supreme body is the General Meeting, which convenes once a year. Extraordinary General Meetings are convened by the Board of Directors whenever it’s deemed necessary or upon request of one fifth of the Members.
The Association is managed by a Board of Directors consisting of up to six directors, elected by the General Meeting among the representatives appointed by the Members, by a simple majority, for a one-year term. They are eligible for re-election at the end of each term for a total of three consecutive years. The Board of Directors elects the Chairperson for a one-year term among the directors. The Chairperson is eligible for re-election at the end of each term for a total of three consecutive years. The current Chair, serving in a personal capacity, has been elected by the members.
The General Manager, nominated and revoked by the General Meeting, is responsible for EDFI’s daily management. He reports to the Board of Directors. The Board has set up Networking Groups for the exchange of experience and information. There are currently 7 formal Networking Groups that meet once or twice a year:
- Environment and Social Standards
- Development effects
- Technical Assistance
- Corporate governance
- Communications
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