10:00 am EDT - 11:30 am EDT

Past Event

Greater transparency for development finance institutions

Wednesday, November 03, 2021

10:00 am - 11:30 am EDT

Online only

To reveal the punch line, transparency—the public availability of timely, comparable, and comprehensive information—on development finance could well be on the cusp of a march forward.

On November 3, the Center for Sustainable Development at the Brookings Institution partnered with Publish What You Fund on a presentation and panel discussion on how to make public a broader and deeper range of data on the investments of development finance institutions (DFI), such as the U.S. Development Finance Corporation and the World Bank Group’s International Finance Corporation. DFIs are public, sometimes public/private partnerships, financial entities that use public funds and other support to incentivize private investment projects in developing countries. The background for the discussion was the publication by Publish What You Fund of Advancing DFI Transparency, the product of an 18-month research project based on extensive review of DFI data and discussions with DFI staff, civil society, the private sector, and other development finance experts.

I believe this report and the DFI transparency tool are a huge step forward in the process. – Rob Mosbacher, former president of OPIC

Why Transparency

Why is transparency of development finance important? The availability of data addresses the needs of four separate groups of stakeholders.

  • Host countries—government and citizens in countries hosting DFI investments need information on prospective and existing investment projects, especially the projected and actual impact (both negative and positive), but also the financial terms, to assess whether they are in the interest of the nation and community
  • Donor countries—government and citizens of donor countries need information, including on impact and mobilization, to determine whether development finance is working—is it achieving its goals and thus a good expenditure of public funds?
  • DFIs—the institutions themselves need this information to measure whether it is achieving the intended purpose. Knowledge in the sector can be advanced through DFIs sharing lessons learned, on what has worked, where there are financing gaps, and how they might collaborate and invest together
  • Market—business investors need the information to better understand the market, including risks, rewards, and market opportunities and dynamics, to encourage investing with DFIs

This latter point was driven home by panelist Nadia Nikolova, portfolio manager of the global asset manager Allianz Global Investors. As evidence of the market power of data, Nikolova cited the example of the effect of Moody’s releasing a study on default and recovery rates. The data opened the market for institutional investors in financing large scale infrastructure in developed countries because it provides hard data on financial risk, allowing investors to better price risks. She and other panelists expanded on this point by noting that transparency also brings trust—investors need trust in their potential partners and in what the likely risks and returns are, and that trust is built on data. Panelist Rayyan Hassan of the NGO Forum on ADB built on the theme of trust in noting that “information … is the bloodline of accountability.”

What’s key to a functioning market is trust amongst the investors. And to build trust, you need to have appropriate transparency. – Tom Edmondston-Low, EBRD

Status and prospects for transparency

A central theme of the panel discussion was that transparency is fundamental, but the state of information disclosure is low. Transparency is needed to ensure DFIs are carrying out their mandates, understanding their impact, and building markets. While there is some disclosure, especially around basic information about project investments, it is not comprehensive, systematic, or comparable. There is a dearth of information on development impacts, investments by financial intermediaries, financial terms, and information about projects that have a negative impact on affected communities. Additionally, the information that is disclosed is too often by just a few DFIs.

That a few market leaders are making this information publicly available confirms that commercial confidentiality is too often used as an excuse, that it needs to be challenged more often—and that we know that much of the information being claimed as confidential has been published elsewhere, often by investees.

It’s impossible for DFIs to make development impact claims or to make sustainability and human rights and environmental commitments but then fail to provide the information necessary to assess and monitor those commitments and hold the DFIs accountable. – Nadia Daar, Oxfam

Several panelists stated that the hurdle to be overcome is not that the information cannot be produced, nor that the private investee will not provide the information (although some will resist), but the culture of the DFIs. The culture of lenders/investors is to disclose as little information as possible and focus on making the deal rather than on impact on affected communities and development. Changing this culture is where transparency begins.

There was also a note of urgency—urgency because the private sector is being called on to fill the gap in the trillions of dollars of financing necessary to meet the commitments of COP26 and the Sustainable Development Goals. But without the data on DFIs we don’t know where and how private finance can best be incentivized.

Transparency tool

Delving into these topics was the core purpose of the Publish What You Fund research. It produced not just the aforementioned report, but a Transparency Tool. The tool is a matrix with a set of data fields to be disclosed by DFIs. It covers (1) at the organizational level, policy type information, and (2) at the project level, four areas of information on a DFI project—data that describes the nature of the project; impact; environmental, social, and governance aspects and accountability to communities; and financial. A separate matrix and set of data fields covers sub-investments by financial intermediaries for disclosure on a certain set of investments that either carry high risks or are larger investments.

The panelists praised the fact that the work by Publish What You Fund was multi-stakeholder and collaborative. Panelists expressed the judgement that the tool is ambitious but doable. There is no expectation that every DFI will be able to be 100% compliant for the release of the pilot index in late 2022, but that it is a good start. The transparency tool provides a common set of indicators that DFIs can use to disclose information that is deemed both relevant and achievable. It is intended to serve as a living tool that can be adjusted with experience, will set a common standard for reporting, and will significantly raise the bar on the availability of information on development finance.


The panel discussion ended on a high note on the feasibility of advancing DFI transparency. The Transparency Tool will develop—in a consultative manner—a methodology for applying the tool to measure transparency. The availability of significantly greater information on development finance within 18 months will be a win for shareholders and other interested stakeholders to be able to measure the impact of DFI investments and understand how best to improve development finance. Interested citizens can better understand both positive and negative impacts of DFI investments and whether public money is being well spent. The private sector can access information that will incentivize more investments in developing countries.

Picking up on Elizabeth Boggs-Davidsen characterization of the transparency tool as “a really useful and helpful North Star”, it became clear during the panel discussion that the tool is a triple win—for DFIs, for citizens, for the private sector—and therefore for development.

The DFI transparency tool provides a practical and useful step in the right direction. If used properly, it will help standardize development finance disclosure and provide timely, comparable data about impact. It strikes a balance between being ambitious and achievable. … is a really interesting and helpful North Star. – Elizabeth Boggs-Davidsen, DFC