Asia: Multilateral Lenders Advance Plans To Mobilise Private Capital, Expand Financing Capacity
Multilateral development banks (MDBs) are stepping up efforts to attract private investment into emerging markets and increase their lending capacity as developing economies face mounting debt pressures, economic uncertainty, and climate-related disasters.
The heads of the world’s major multilateral lenders met at the Asian Development Bank (ADB) headquarters in Manila on October 17 to discuss ways to expand financing and improve the impact of development spending.
The meeting, the group’s first in the Philippines, was hosted by the ADB, which chairs the group this year.
The institutions reaffirmed their readiness to provide timely financing and analytical support to protect vulnerable populations, sustain job creation and support long-term economic growth amid constrained government budgets.
The meeting highlighted progress on initiatives designed to mobilise private capital, improve the use of MDB balance sheets and make joint financing more efficient.
One key development was the adoption of an updated MDB-wide methodology for measuring private capital mobilisation, alongside a reference guide intended to improve consistency in reporting.
The institutions will begin reporting under the new methodology in 2027.
The group also welcomed progress on an initiative to distribute MDB-originated assets to institutional investors, giving them greater access to development finance opportunities and helping lenders mobilise additional funding.
As part of this effort, the institutions are working towards launching a joint MDB debt fund following consultations with major global asset managers to assess demand for a diversified portfolio of MDB-originated assets.
The lenders also highlighted reforms to capital adequacy frameworks and other financial innovations that have generated an additional $792 billion in potential lending capacity over the next decade since 2023, according to the group’s statement.
They welcomed the publication of the 2026 MDB Comparison Report and further work to make capital adequacy frameworks more comparable across institutions.
Other priorities include expanding local-currency financing and foreign-exchange risk solutions to reduce currency mismatches and deepen domestic financial markets in emerging and developing economies.
The institutions also highlighted the importance of concessional and blended finance, particularly for the poorest and most vulnerable countries, while reviewing ways to coordinate the use of limited concessional resources across public and private-sector operations.
Beyond financing, the MDB heads discussed cooperation on climate, nature, critical minerals, water and artificial intelligence, areas where coordinated investment could support economic resilience and job creation.
A collaboration framework for critical minerals aims to strengthen responsible and diversified supply chains, increase local value addition and encourage private-sector investment.
The institutions also reported progress on climate initiatives, including more than 30 activities to help countries translate long-term climate and development goals into investments and implementation plans.
The group welcomed joint initiatives to support the responsible use of artificial intelligence, including an AI use-case repository, an academy for governments and tools for assessing risks.
The lenders also highlighted efforts to make development financing faster and more effective by aligning operational policies, reducing duplication and improving cooperation in co-financing arrangements.
The European Investment Bank Group will take over the chairmanship from the ADB in December and lead the group’s work in 2027. The institutions also discussed how their shared agenda could support priorities under the United Kingdom’s 2027 G20 presidency.
The MDB Heads Group comprises the African Development Bank Group, ADB, Asian Infrastructure Investment Bank, Council of Europe Development Bank, European Bank for Reconstruction and Development, European Investment Bank Group, Inter-American Development Bank Group, Islamic Development Bank, New Development Bank, and World Bank Group.
The International Monetary Fund also participates in the group’s discussions.
