Mapping Financial Support from Major Multilateral Development Banks (MDBs) to Public Development Banks (PDBs)
June 26, 2025
The traditional Spring Meetings of the Bretton Woods Institutions, held in Washington in April 2025, took place against a backdrop of uncertainty surrounding concessional development financing and marked an important step towards the Fourth United Nations Conference on Financing for Sustainable Development, held from 30 June to 4 July in Seville.
One of the challenges was then to establish a link between the discussions held at the United Nations in preparation for Seville and those conducted by the Bretton Woods Institutions on the reform of the international financial architecture. For FERDI, this link meant, inter alia, that the World Bank should take into account the Multidimensional Vulnerability Index (MVI) adopted by the United Nations General Assembly in August 2024.
That is why, based on the conclusions of the event it organised at the Annual Meetings in Marrakech in 2023, FERDI took the initiative to organise a round table alongside the Spring Meetings, in collaboration with the United Nations (UN-OHRLLS and UN-DESA), the 4P (Pact for Prosperity, People and the Planet), Africatalyst and the Open Society Foundation, which hosted the event Using a Multidimensional Index for the Allocation of Development Finance.
It was no secret that the Bank was somewhat reluctant to include a vulnerability index in the allocation formula of its concessional window, IDA. However, with reference to the MVI and based on preparatory work by FERDI, we were able to argue (see Powerpoint presentation):
The round table organised at the Spring Meetings was moderated by Abdoul Salam Bello, Director at UN-OHRLLS and former Executive Director of the World Bank for the African countries of Group II, with whom FERDI had the opportunity to collaborate in raising awareness among the Bank's African Governors about the benefits of such a reform.
Several African leaders, including Cape Verde's Deputy Prime Minister and Minister of Finance, Olavo Correia and the Central African Republic's Minister of Finance and Budget, Hervé Ndoba, expressed similar views, as did the African Executive Directors of the World Bank. Ed Mountfield, who was then Vice President for Operational Policy and Country Services (OPCS) at the World Bank, expressed interest in the proposal and announced that it could be examined as part of an upcoming IDA review, which will be conducted taking into account an assessment requested from the Independent Evaluation Group (IEG). Arnaud Buissé, Executive Director for France, reaffirmed France's support for the initiative, while indicating that it could not be implemented using the UN MVI as it stands, due in particular to the excessive number of its components. It was noted that a process of revision of the UN MVI had been scheduled for the future.
In her opening remarks at the round table, Chrysoula Zacharopoulou, the 4P's Special Envoy (a.i.), officially expressed her institution's interest in the proposal and its implementation. This was confirmed in Seville, where a ‘special event’ was dedicated to the 4P, attended by President Macron, several Heads of State, and leaders of international institutions. From Washington to Seville, the 4P has established itself as a unique multilateral actor, transcending traditional divisions. Will it be able to advance an aid reform that takes into account the structural and multidimensional vulnerability of countries? That is what FERDI hopes.
In the quest for sustainable development financing, the Seville phase, long anticipated and carefully prepared, is now over. Before looking ahead to the "post-Seville" period and the implementation of the commitments - new or renewed - formulated at this important conference, let us return to the document that formalises them in order to assess the prospects in light of the ideas put forward by FERDI.
The "Sevilla Commitment", a document negotiated beforehand and adopted by the United Nations Member States attending the conference, aims to renew the global framework for financing development, while continuing the programme adopted in 2015 in Addis Ababa.
The Seville Declaration covers a wide range of issues relating to development financing, on which FERDI is working: international architecture, concessional financing for vulnerable countries, debt management for poor countries, mobilisation of fiscal resources, international trade and development, measuring development and accountability, etc. Over the last few months, FERDI has taken part in sessions of the Preparatory Committee (PrepCom), focusing specifically on three themes that we felt had been less explored: the allocation of concessional resources to poor and vulnerable countries, the measurement of fiscal performance in these countries, and the financing of least developed countries (LDCs) in a context of severe constraints.
It was on these themes that FERDI organised three side events at the FfD4 conference, against a backdrop of declining official development assistance from OECD countries, strong international fragmentation and a shift in the allocation of ODA flows towards the financing of global public goods, particularly climate-related ones. The fundamental question of how concessional resources, which are scarce by nature and even more so in the current economic context, should be allocated geographically to maximise their effectiveness is virtually absent from the Seville Declaration.[1]
This pronounced lack of interest in allocation issues illustrates the difficulty many donors face in moving beyond rhetoric in favour of poor and vulnerable countries towards a fairer, more equitable and more transparent system for distributing the most concessional resources. This was the operational message that FERDI sought to convey at a side event organised with Guinea, represented by its Minister of Economy and Finance, Mourana Soumah, and with the participation of Gauthier Bourlard, Director and Advisor at the AfDB; Gilles Morellato, Head of the Official Development Assistance Unit at the French Ministry of Foreign Affairs; and Laurent Sarazin, Co-Chair of the International Forum on TOSSD, EU. The need to distinguish the allocation flows criteria by objective (development, adaptation to climate change, mitigation of climate change) emerged very clearly in the debate, especially given the increasing scarcity of concessional resources. The disengagement of traditional development aid donor countries, noted in Seville and confirmed in recent OECD forecasts, reinforces the need, already strongly emphasised in Addis Ababa, to improve the mobilisation of domestic public resources in developing countries. As a central theme of the FfD4 debates, this issue is addressed in the Declaration in various complementary ways.
There is, however, one subject, technical but fundamental, that is curiously not examined in the Declaration and that FERDI wished to highlight: the measurement of "tax gaps", which makes it possible to assess untapped revenue potential and strengthen transparency and public confidence in national tax systems. FERDI, in collaboration with WAEMU, organised a side event on this topic with the participation of Vítor Gaspar, Director of the Fiscal Affairs Department at the International Monetary Fund (IMF); Jean Tchoffo, Secretary General of the Ministry of the Economy, Planning and Regional Development, Cameroon; Shanti Bobin, Deputy Director in charge of Multilateral Financial Affairs and Development (Multifin) at the French Treasury; and Grégoire Rota-Graziosi, Professor of Economics (CERDI–Université Clermont Auvergne, CNRS) and Co-Head of FERDI’s Taxation for Sustainable Development programme. He presented the Foundation’s work on evaluating tax gaps in Africa and strategies for reducing them, opening the discussion on tax incentives and expenditures, the relevance of which is sometimes questionable.
The third issue raised by FERDI in Seville was the financing of LDCs. While LDCs remain at the heart of the United Nations' concerns (the Seville text devotes numerous sub-paragraphs to issues relating to LDCs), it seemed important to bring the debate on financing their development up to date at a time when the international context is unfavourable to concessional financing. The side event, co-organised with Haiti's Minister of Planning and External Cooperation, Ketleen Florestal, brought together a very rich panel, including Nepalese Ambassador Lok Thapa, Chair of the Global Coordination Bureau of LDC and Vice-Chair of ECOSOC; Abdoul Salam Bello, Director at UN-OHRLLS and former Executive Director at the World Bank for Group II of African countries; Olivier Cattaneo, Head of the OECD's Policy Analysis and Strategy Unit; Kunal Sen, Director of UNU-WIDER; Shanti Bobin, as previously mentioned; and Elea Wermelinger, Deputy Head of Department for International Development at the French Ministry of Foreign Affairs. The panel highlighted the scale of the challenges facing the LDCs and the inadequacy of the concessional funding allocated to them. It reaffirmed the need for the international community to focus its efforts on poor and vulnerable countries. This can be achieved in particular through an allocation system for concessional resources that takes into account the structural vulnerability of countries, over and above the usual income criteria. It is with this in mind that the OECD launched its “Beyond GDP” initiative, with which FERDI is associated, aiming to renew the measurement of development.
Seville was also happening ouside Seville, with many events and declarations on financing for development taking place elsewhere but linked to the FfD4 conference. FERDI's voice, carried by Jean-Michel Sévérino, was heard loud and clear on three occasions that same week: at two events organised by the French Agency for Development (AFD) on the scaling-up of sustainable impact of development actions, and during the ARTE television programme 28 minutes focused on the future of development aid.
Depending on their sensitivities, some will judge the final FfD4 Declaration to be incomplete and less ambitious than the Addis Declaration, while others will hold it in higher esteem. It must be said, however, that the international geopolitical context was less hopeful than in 2015, and that the text is affected by this. In this respect, the appeals and commitments made by member countries often seem out of touch with the current context. The document stresses the importance of multilateral cooperation, but without specifying the depth of the challenges that multilateralism is currently facing. There is, however, one important positive point: the text highlights the role of public development banks, the need to strengthen their capacities, and the cooperation between multilateral development banks (MDBs) and national development banks (NDBs). This is precisely the theme of the FERDI report presented by Bruno Cabrillac at the dedicated side event organised by Finance in Common (FICS), where it was highlighted why and how MDBs are helping, and can do more to help NDBs overcome their resource constraints and effectively mobilise funds for sustainable development projects.
The FfD4 Conference remains an important milestone that development actors will be able to refer to for years to come, following the example of previous conferences in Addis Ababa and Doha. It is also a moment where a number of ideas were finally launched, some of which we hope, will progress and perhaps make history. Without waiting until 2035, the mid-term review will have to specify the path followed, which today remains very uncertain!
[1] Of its 289 sub-paragraphs, a quarter deal with the mobilisation of resources, of which almost twenty deal explicitly with the mobilisation of international financing, and only 4 deal with the rules of allocation, which is moreover not very operational.
