Development Finance Institution (DFI) is the umbrella term for a specialised bank or subsidiary which provides finance for projects in the global South that would otherwise struggle to raise capital.
They are usually majority-owned by national governments and get their capital from development funds or benefit from government guarantees. In 2016 the investment portfolio of the 15 European DFIs was €38.1bn.
Their central aim is to foster growth, reduce poverty and improve people’s lives by “promoting economically, environmentally and socially sustainable development through financing and investing in profitable private sector enterprises”. But all too often they do the opposite.
European DFIs have bankrolled projects that have driven deforestation, land grabs, and caused other social and environmental ills. European governments must ensure that the vast sums of public money invested by European DFIs in private sector enterprises in the developing world are subject to genuine accountability and transparency.
DFI related resources
European Development Finance Institutions and land grabs: The need for further independent scrutiny
This study highlights the role of European Development Finance Institutions (DFIs) in possible land grabs and questionable forestry projects in Africa. It documents nine such cases involving eight of the European DFIs. It raises...
Taking stock: Tracking trends in European Aid for forests and communities
Forests and forest-dependent communities are under increasing pressure due to infrastructure projects and the demand for agricultural commodities. Although there is growing recognition of the importance of forests in mitigating...