The Australian Council for International Development (ACFID) has welcomed a new review examining how private and philanthropic investment can be expanded to grow the impact of Australia’s international development assistance.
The move signals the first policy shift in how international development will be financed under the Albanese Government.
The Department and Foreign Affairs and Trade has announced it will lead the review into new forms of development finance “to support achieving Australia’s foreign policy, trade, security and development objectives and help countries in our region achieve their development goals and deliver on climate change.”
CEO of ACFID, Marc Purcell said:
“We hope this review will expand opportunities for Australian private sector organisations and impact investors to work in partnership with experienced development professionals to support development outcomes in our region, from advancing gender equality to enabling a clean energy transition.
“Amidst rising sovereign debt, widening inequality, and the ongoing health and economic effects of COVID-19, it has never been more timely or important to bring greater private sector and philanthropic investment into tackling poverty reduction.”
According to the review’s terms of reference, DFAT “will consider options to better leverage and blend investment from bilateral donors and multilateral organisations, as well as private, philanthropic, and other sources of financing.” Blended finance uses catalytic capital from public or philanthropic sources to increase private sector investment in sustainable development.
Purcell continued:
“There is a staggering shortfall of $US4.2 trillion in the financing required to achieve the Sustainable Development Goals by 2030. Leveraging just 1.1 percent of the total assets held by banks, institutional investors and asset managers would fill this gap and put us back on track.
“Leveraging new forms of finance is good for growing the development gains of our neighbours and good for strengthening regional relationships.”
ENDS
More information
For more information and background, ACFID’s policy brief on development finance can be found here.
Contact
