A new initiative to assist developing countries accelerate economic growth through private sector financing has been launched.

The World Economic Forum and the Organisation for Economic Co-operation and Development (OECD) launched, at the World Economic Forum on Africa, the Redesigning Development Finance Initiative.

The new initiative will bring together development financial institutions, governments, providers of official development assistance (ODA) and private sector investors to expand the pool of foreign and domestic capital available for economic development. Focus will be placed on sectors including infrastructure, agriculture and energy, with an initial focus on investment in Africa.

Extending the reach of private investment

The initiative aims to extend the reach and effectiveness of private investment and ODA through the deployment of risk mitigation and concessional finance tools. In particular, it will focus on four work streams that will help developing countries: understand the existing landscape of blended financing models; build consensus on the value and opportunities different actors bring; determine which models have the highest potential, especially to unlock other forms of capital; and define capabilities and partnerships to mobilise and scale these high-value models.

“While every sector is striving to maximize the benefits and returns on their contributions, there’s a growing consensus that harnessing these resources more strategically is critical to achieving their full potential for impact towards social progress and sustainable development,” said Christian Paradis, Canadian Minister of International Development and La Francophonie. “As we look to the post-2015 development goals we need to not only leverage the opportunities inherent in innovative partnerships, but we also need to better coordinate financing models and approaches if we are to achieve our ambitious targets.”