The 5th Finance in Common Summit (FiCS), which recently concluded in Cape Town, South Africa, represented an important opportunity for dialogue among Public Development Banks (PDBs) globally. The event coincided with the G20 Finance Ministers and Central Bank Governors Meeting, organised by an African nation for the first time. The Summit aimed to identify measures to align financial flows with the objectives of the 2030 Agenda and the Paris Agreement, while also representing an opportunity to strengthen collaboration between public and private financial institutions.
With the dismantling of the US Agency for International Development (USAID) and the announcement of new cuts to development aid in favour of increased defence budgets, discussions focused on how to bridge the financial gap needed to meet climate and development goals.
The strategic role of Public Development Banks
Discussions at the Summit underscored the need for new instruments and mechanisms to integrate and enhance traditional international financial support. In this context, Public Development Banks (PDBs) – including Multilateral Development Banks (MDBs) and, in particular, National Development Banks (NDBs) – are emerging as key players in promoting financial mechanisms and instruments such as guarantees, mixed finance mechanisms, development of public-private partnerships and risk reduction measures. These instruments play a crucial role in bridging the financial gap needed to achieve climate and development goals.
In particular, three key themes emerged:
- Stronger cooperation between MDBs and NDBs
In a context where achieving climate and development goals requires an integrated approach, MDBs and NDBs offer complementary contributions of fundamental importance. MDBs have the capacity to mobilise substantial financial resources to support large-scale investments and projects, as well as offering technical capacity, international experience and connections with public institutions. NDBs, on the other hand, have in-depth knowledge of local contexts, and are particularly skilled in identifying project opportunities and channelling global resources towards national priorities, also thanks to their ability to provide financing in local currency, which helps to reduce exchange rate risks and contain capital costs. The synergy between these two entities can increase the effectiveness of investments by enabling strategic coordination with governments. - Mobilising private capital
While PDBs have strategic tools to attract private capital, such financing remains limited in many emerging and developing economies. In this context, risk management mechanisms, financial guarantees, mixed finance and public-private partnerships can incentivise private investments in energy transition and sustainable development projects. While acknowledging the private sector’s essential role in mobilising capital to close the funding gap for sustainable development goals, discussions also highlighted the need to improve the effectiveness of these mechanisms, ensuring that limited public resources are not redirected to private investments in low-risk and/or low-impact sectors and regions. - Development of Country Platforms
In these circumstances, Country Platforms are emerging as a coordination mechanism for mobilising financial resources and technical support in line with the priorities of the country of intervention. If well-structured, these operational platforms can improve coordination between national and international actors, facilitate access to public and private financing, and serve as implementation mechanisms for National Transition Plans. NDBs could act as an intermediary by coordinating financial institutions and providing technical and political support to local administrations.
A global and integrated agenda
The final communiqué of the 5th Finance in Common Summit reiterated the importance of collective and systemic action among PDBs, emphasising how complementary expertise can lead to greater efficiency in the use of capital and the achievement of common goals. Members also confirmed their commitment to actively contributing to the Fourth International Conference on Financing for Development (FfD4).
Meanwhile, at the G20, South African President Cyril Ramaphosa, in his opening speech, outlined the G20 priorities for the year, emphasising the need to strengthen resilience to natural disasters, mobilise public and private financial resources for a just energy transition, and, most importantly, to guarantee debt sustainability for developing economies. In addition, he highlighted the “African Leaders Initiative,” launched by seven former African heads of state to urgently address challenges related to national debt servicing. However, the meeting’s conclusions revealed that Finance Ministers and Central Bank Governors are struggling to reach a consensus on how to strengthen multilateral cooperation to address existing and emerging global risks. The discussions were notably impacted by Donald Trump’s recent remarks criticising renewable energy and climate programmes, as well as the absence of several ministers.
A new global financial architecture: opportunities for 2025
Despite the complex geopolitical landscape, 2025 presents several opportunities to advance the agenda for transforming the global financial architecture. The International Conference on Financing for Development (FfD4), scheduled for the end of June in Seville, Spain, offers a key moment to consolidate a financial governance that is truly oriented towards sustainable development and capable of addressing current challenges. Meanwhile, in the lead up to COP30 in Brazil, the Baku-Belem Roadmap provides another opportunity to outline a financial agenda aimed at mobilising 1.3 billion dollars by 2035—the estimated amount required to enable the transition in developing economies.
Photo by Marlin Clark
