ARIA FoG #4

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Building Bridges: Case studies on successful collaboration between donors and development finance institutions

Donor agencies and development finance institutions (DFIs) share common goals around supporting positive economic, social, and environmental outcomes in low- and middle-income countries. However, collaboration between donors and DFIs is not yet the norm, despite the potential for both sides to benefit. 

A new report from the Africa Resilience Investment Accelerator (ARIA) – the fourth in our Foundations of Growth series – adds to the growing body of evidence on this topic. Titled, ‘Building Bridges: Case studies on successful collaboration between donors and development finance institutions’ it explores 10 case studies of effective donor-DFI collaboration, identifying key success factors and showcasing the results that can be achieved through working more closely together. 

Drawing on this research, it provides recommendations for donor programmes and DFIs grouped into three categories:   

  • Strategic alignment and incentivising collaboration: aligning on priorities and addressing beyond-the-firm constraints  
  • Building capacity and awareness: resourcing collaboration, demonstrating the value of collaboration and including investment expertise  
  • Adopting compatible operational models and tools: bridging the gap on ticket sizes, and the important of quality, relevant and flexible support 

The publication highlights the progress being made on donor-DFI collaboration and discusses the opportunities to develop deeper partnerships to deliver even greater impact.   

You can read the key findings here

You can read the full report here

The report was authored by Justin Van Rhyn and supported by ARIA, British International Investment and Gatsby Africa.  

The Foundations of Growth series of publications shares the trends, lessons, challenges, and opportunities of investing in frontier markets in Africa. The series is aimed at helping development finance institutions, donors and impact investors develop their strategies for operating in these markets.

ARIA, a joint initiative we began with BII, aims to address systemic barriers in frontier markets in Africa. Market creation is a pivotal ambition in our 2030 Pioneer, Develop, Scale strategy. It aims to generate more investment opportunities for development banks and other large-impact investors seeking to contribute to private sector development in the markets and sectors that it currently cannot reach. For more on our market creation approach, click here.