Understanding the role of development finance institutions in promoting development

The report examines the alignment between DFI funding and national strategic priorities in Ethiopia, Ghana, and Kenya. It finds that while national plans are generally aligned with SDGs, DFIs often operate based on internal strategies rather than national plans. The analysis identifies specific sectoral gaps where DFIs could provide financial additionality, particularly in ICT and healthcare, and proposes a four-step framework for DFIs to better align investments with country-level strategic sectors.

• DFIs generally do not integrate national development plans into their investment decisions to a significant degree, instead relying on internal mandates, shareholder objectives, and sector strategies.
• Among the three case studies, Ghana shows the highest alignment of DFI finance (excluding investment funds) with national priority sectors, followed by Kenya, while Ethiopia shows the lowest alignment for total DFI flows.
• In Ethiopia, DFI investments are heavily concentrated in agribusiness (60%) and tourism (35%), leaving strategic sectors like construction and manufacturing under-represented by DFIs but supported by commercial finance.
• In Kenya, DFIs focus heavily on the finance sector (57%) and energy (13%), with opportunities to increase funding in strategic sectors such as transport and ICT, which are currently reliant on ODA.
• In Ghana, DFI funding is strongly aligned with energy (41%) and transport (14%), but there is significant under-funding in healthcare and ICT.
• DFIs contribute most effectively to SDGs 7 (energy), 8 (economic growth), and 13 (climate change), particularly through job creation and investments in clean energy like hydropower and solar.
• The report proposes a four-step process for DFIs to increase alignment with strategic sectors: identifying strategic sectors, comparing them with current activities, discussing needs with stakeholders, and investing in target sectors.

APA

Marbuah, G., Velde, D. W. T., Attridge, S., Lemma, A., & Keane, J. (2022). Understanding the role of development finance institutions in promoting development. Stockholm Environment Institute. https://www.sei.org/wp-content/uploads/2022/02/sei-report-development-finance-three-countries-03032022.pdf

Chicago

Marbuah, George, Dirk Willem te Velde, Samantha Attridge, Alberto Lemma, and Jodie Keane. Understanding the role of development finance institutions in promoting development. Stockholm Environment Institute, 2022. https://www.sei.org/wp-content/uploads/2022/02/sei-report-development-finance-three-countries-03032022.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=Understanding the role of development finance institutions in promoting development |publisher=Stockholm Environment Institute |date=February 2022 |url=https://www.sei.org/wp-content/uploads/2022/02/sei-report-development-finance-three-countries-03032022.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{marbuah2022understanding, author = {Marbuah, George and Velde, Dirk Willem te and Attridge, Samantha and Lemma, Alberto and Keane, Jodie}, title = {{Understanding the role of development finance institutions in promoting development}}, institution = {Stockholm Environment Institute}, year = {2022}, month = feb, url = {https://www.sei.org/wp-content/uploads/2022/02/sei-report-development-finance-three-countries-03032022.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }