The Bill & Melinda Gates, Open Society, and Rockefeller foundations have announced six grants totaling $2.78 million to spur innovation in the world’s development finance system and boost support of the United Nations’ Sustainable Development Goals (SDGs) and the Paris Climate Agreement.

Funding was provided through the Multilateral Development Banks (MDBs) Challenge Fund, a $5.25 million collaboration between the foundations announced in October 2022, with the goal of unlocking MDB financing for low- and middle-income countries. Recipients include Albert Ludwig University of Freiburg (Germany), which will develop a new methodology for assessing concentration risk tailored to MDB portfolios; Caribbean Development Bank (Barbados), which will explore accounting practices to better cushion disaster-related shocks and provide tailored financing designed to meet specific needs and challenges; FSD Africa (Kenya), which will evaluate local currency solutions for MDB portfolio transfers to deepen and diversify domestic capital markets; IDB Invest (United States), which will structure its first securitization of development-related assets; Risk Control Limited (United Kingdom), which aims to produce an analysis in support of MDB efforts to develop markets in their own risk transfer mechanisms and benchmark capital adequacy across MDBs to increase transparency; and the University of Leeds (UK), which will investigate MDB local currency practices and assess current risk management frameworks.

“FSD Africa intends to undertake detailed assessment and engagement with MDBs and other key stakeholders to curate an innovative approach to unlock MDB capital in a way that enhances efficiency, maximizes impact and supports sustainable economic development in Africa,” said FSD Africa CEO Mark Napier.

“The MDB Challenge Fund is designed to jump-start MDB reforms,” said Rockefeller Foundation chief of staff Mike Muldoon. “These grants should help financial institutions test methods to meaningfully increase their funding and impact, to enable MDBs to better confront the crises facing the world—especially climate change, energy, the food crises, and debt.”

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