The case for DFI and donor collaboration in fostering private sector investment in frontier markets

Donor governments are doing more than ever to mobilise private capital to support economic development. This movement was initiated by the 2015 Addis Ababa Action Agenda and the need to go from ‘billions to trillions’ in terms of investment needed to deliver the UN Sustainable Development Goals.    

Achieving this aim in frontier markets requires collaboration – both among development finance institutions and between DFIs and donor agencies. A new publication from the Africa Resilience Investment Accelerator (ARIA) explores this topic in more depth. Titled ‘Building Bridges: The case for DFI and donor collaboration in fostering private sector investment in frontier markets’, it covers how working together can help remove barriers to investment in frontier markets, the ways DFIs and donors can collaborate and future collaboration opportunities.  

The publication draws from multiple sources, including responses to a survey of investment professionals from 12 development finance institutions. This research found that:  

• 55% of respondents do not collaborate with donor agencies at all or only to a limited extent 

• 73% of respondents believe the opportunities for enhanced collaboration among DFIs are high or very high 

• Collaboration among DFIs typically focuses on sharing investment opportunities and co-investing 

The publication builds on the ‘Bridging the Gap’ report – produced by British International Investment and Gatsby with support from FMO and DCED – which opened a dialogue on how working together can benefit both DFIs and donors.  

This publication is the third in our Foundations of Growth series. The next report in the series will explore examples of successful collaboration in greater depth.