Mobilizing private finance
2020 flash report
Reporting period: 2012 to 2019
What is mobilized private finance?
“Mobilized private finance” is when the private sector participates in sustainable development projects. We say it's "mobilized" because Canada’s involvement helps make the project financially viable by mitigating risk and improving the enabling environments. Official actors such as Canada can attract private investment in developing countries. They can reduce risk and improve the enabling environment.
Why do we need to mobilize the private sector?
We must scale up resources to achieve the Sustainable Development Goals (SDGs) by 2030. Those resources include:
- traditional official development assistance (ODA)
- other development-related resources
- domestic-country resources
- South-South cooperation
- philanthropic and non-governmental organizations
- the private sector
The private sector is key to advance sectors like infrastructure, energy and climate change. We can mobilize a lot of untapped capital like pension funds and commercial banks to support sustainable development. This generates the necessary resources to meet the SDG financing gap. Canada’s investments in blended and innovative financing total $674 million. These investments have played a part in mobilizing $3.8 billion in extra funding from the private sector. From that, we attributed $890 million to the Canada-based risk profile and investment.Footnote 1 On top of traditional ODA, Canada can invest to mobilize the private sector. We can increase our investments to support:
- the achievement of the Feminist International Assistance Policy objectives
- the SDGs
We follow the G7 Charlevoix commitment on innovative financing for development. Canada’s approach to innovative finance includes a gender-based analysis plus perspective. It pursues gender-responsive design practices. This maximize impacts for gender equality and the empowerment of women and girls.
Project spotlight: Canadian Climate Fund for the Americas (C2F)
The Inter-American Development Bank manages the C2F. It aims to insert more private investment in climate change projects in Latin America and the Caribbean. C2F will provide financing with good terms to projects that do not benefit from a sovereign guarantee. They will pay special attention, where possible, to the poorest and most vulnerable countries. Canada invested $250 million in phase one as well as an extra $223.5 million in phase two. Phase one of the C2F mobilized $1.54 billion more in private investment. Canada uses internationally agreed upon methodogies. We have mobilized $437 million in private finance from phase one.
55+
Canada has invested to mobilize private finance in over 55 projects
92%
92 percent of investments target climate change
30+
Canada is mobilizing private finance in over 30 countries
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