How do development finance institutions support national development goals?

This policy brief, based on a study of Ethiopia, Ghana, and Kenya, examines the alignment between Development Finance Institutions (DFIs) and national development plans. It finds that DFIs generally do not use national development plans to shape investment decisions, leading to funding gaps in strategic sectors. The brief proposes a four-step framework—Identify, Compare, Engage, and Invest—to help DFIs better align their portfolios with country-level priorities to enhance development impact.

• Development finance institutions (DFIs) generally do not allow national development plans to drive their investment decisions or funding allocations, often operating instead according to internal strategies and objectives.
• The study identified specific strategic sectors in Ethiopia, Ghana, and Kenya that are underfunded by DFIs, representing potential commercial and development opportunities. In Ethiopia, these include manufacturing and construction; in Ghana, construction, healthcare, and ICT; and in Kenya, education, transport, and ICT.
• DFIs pursue three primary goals: generating additionality (providing financial services, equity, or debt that the private market does not), creating development impacts (such as economic growth and employment), and producing a catalytic or demonstration effect to prove commercial viability to other investors.
• DFIs are increasingly aligning their investments with the Sustainable Development Goals (SDGs) and the Paris Agreement, particularly regarding energy and climate change (SDG 7, 8, and 13) through investments in clean energy like solar and hydropower.
• DFIs express skepticism regarding the quality of national development plans and their ability to guide government behavior, with some suggesting that the SDGs should serve as the primary starting point for development discourse instead.
• The brief proposes a four-step process for DFIs to increase alignment with national priorities: identifying strategic sectors, comparing these sectors with current portfolios and other financial flows, engaging with sector representatives, financial institutions, and governments, and finally scoping feasible investments.

APA

Marbuah, G., Velde, D. W. T., Attridge, S., Lemma, A., & Keane, J. (2022). How do development finance institutions support national development goals? Stockholm Environment Institute. https://www.sei.org/wp-content/uploads/2022/05/sei-brief-dfis-development-goals-marbuah-may-2022.pdf

Chicago

Marbuah, George, Dirk Willem te Velde, Samantha Attridge, Alberto Lemma, and Jodie Keane. How do development finance institutions support national development goals? Stockholm Environment Institute, 2022. https://www.sei.org/wp-content/uploads/2022/05/sei-brief-dfis-development-goals-marbuah-may-2022.pdf.

Wikipedia

{{cite report |last1=Marbuah |first1=George |last2=Velde |first2=Dirk Willem te |last3=Attridge |first3=Samantha |last4=Lemma |first4=Alberto |last5=Keane |first5=Jodie |title=How do development finance institutions support national development goals? |publisher=Stockholm Environment Institute |date=May 2022 |url=https://www.sei.org/wp-content/uploads/2022/05/sei-brief-dfis-development-goals-marbuah-may-2022.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{marbuah2022how, author = {Marbuah, George and Velde, Dirk Willem te and Attridge, Samantha and Lemma, Alberto and Keane, Jodie}, title = {{How do development finance institutions support national development goals?}}, institution = {Stockholm Environment Institute}, year = {2022}, month = may, url = {https://www.sei.org/wp-content/uploads/2022/05/sei-brief-dfis-development-goals-marbuah-may-2022.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }