Webinar Series: Reimagining Private Capital for SDGs

In 2015, when the Sustainable Development Goals (SDGs) were adopted, the Global South required an estimated USD 2.5 trillion in private capital investments annually to meet the goals by 2030. In the wake of the pandemic, private investments in developing and transition economies have fallen, and COVID recovery financing requirements have increased. The revised estimated SDG funding gap from private investments now stands at a staggering USD 4.2 trillion annually.

It is encouraging that private capital investments in emerging markets have grown significantly over the last decade. The impact investing sector is estimated to have surpassed USD 1T in assets under active management and grows at an estimated compound annual growth rate of up to 25 percent.

However, investors have concentrated in certain sectors and geographies, with clean energy and financial services accounting for about a third of the investments. To bridge the annual SDG funding gap, it is imperative to address the needs of underinvested sectors and geographies.

We expect the next phase of growth in private capital for SDGs to focus on:

Inclusive Growth: investing in and financing diverse and underserved entrepreneurs and fund managers through localization of fund management and application of a gender lens to investments; investing in lesser developed countries and communities with limited access to developmental capital
Sectoral Diversification: channeling more investments into healthcare; water, sanitation, and hygiene; diversification outside of climate mitigation (93% of current climate finance) and renewable energy (58% of current climate finance) to focus on climate adaptation and resilience
Innovative Finance: financial tools such as blended finance, results-based financing, climate and gender lens investing, digital instruments, and innovative fund management models to incorporate impact and diversity.

Abt’s webinar series over the next 12 – 15 months on Reimagining Private Capital for SDGs will focus on these themes and culminate in “Call to Action” sessions focused on blended finance and support for first time and diverse fund managers. To get advance notice of these and other upcoming events subscribe to Abt events.

PREVIOUSLY RECORDED EVENTS:

Reimagining Private Capital for SDGs: Bridging the Private Capital Financing Gap in the Global South

Thursday, April 13, 2023 11:00 am - 12:00 pm EST

The revised Sustainable Development Goals (SDGs) funding gap from private investments now stands at a staggering USD 4.2 trillion annually. Impact investing, where investments are made with an intentionality towards the SDGs, has been estimated to have crossed USD 1 trillion in global assets under management, growing at up to 25%. However, this growth has been significantly skewed toward sectors such as financial services, agriculture, and clean energy, together accounting for 55% of asset allocation. To accelerate bridging the SDG financing gap, impact investors need to recreate these success stories in the currently underinvested sectors such as WASH, healthcare, affordable housing. Further, the growth in private investments is also skewed toward more developed emerging markets. Despite the 70% increase in foreign investments in SDG-related sectors in developing countries in 2021, a strong rebound from the early pandemic lows, the share of 46 Least Developed Countries (LDCs) in these investments dropped from the already modest 19% in 2020 to 15% in 2021.

In this session, we bring together investment professionals from the development sector to discuss the investment opportunities in underinvested sectors and geographies and the initiatives and financial tools to mobilize more private capital in these areas.

In the next session, we will build on this topic and bring together risk management professionals from the development sector to discuss the challenges of investing in underinvested sectors, especially in the context of an inflationary post-pandemic world, and potential solutions. Watch the event recording.

Challenges to Mobilizing Private Capital in a Recessionary World

Thursday, July 13, 2023 11:00 am - 12:00 pm

In the series' second webinar, “Challenges to Mobilizing Private Capital in a Recessionary World,” we brought together investment and risk professionals from the development sector to discuss the critical risks, challenges, and potential mitigation strategies involved in mobilizing private capital for such investments. These considerations are critical in the context of a post-pandemic world and rising interest rates.

Our webinar series, Reimagining Private Capital for SDGs, began with a discussion on “Bridging the Private Capital Financing Gap in the Global South.” It detailed the investment opportunities in underinvested sectors and geographies to bridge the staggering USD 4.2 trillion annual gap in financing required to achieve the Sustainable Development Goals (SDGs) by 2030.