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he 2030 Sustainable Development Agenda, adopted by the UN in September 2015, drew attention of the international community to the problem of finding resources to finance various initiatives and programs necessary to achieve the Sustainable Development Goals (SDGs). The availability of the required long-term financing from state budgets and multilateral development banks (MDBs) remains limited, and its structure is not optimal due to unstable market conditions and cyclical fluctuations in the global economy, as well as a number of long-term economic trends. At the same time, private investment, primarily from the largest institutional investors, could become another important source of additional financing for development, which could partially compensate for the abovementioned deficit. Given that, on the one hand, private investors have considerable funds, which they are not inclined to invest in infrastructure development for various reasons, and on the other hand, MDBs’ investment in this sector remain limited, despite their vast experience and unique institutional characteristics, demand has increased for multilateral banks to perform a more active role in developing and using new financial instruments, addressing information problems and providing their own financial resources, that is, co-financing projects with the private sector. This article examines the main approaches used by the MDBs to mobilize private investment, assesses their “major catalytic role” of co-financing with the private sector, and gives some recommendations on strengthening their mobilization role. According to the author, the data on direct private investment mobilization provided by MDBs indicate the need to expand the use of mobilization tools. In this regard, measures aimed at solving the main problems in this area - the limited MDBs’ resources and their conservative credit policy – seem to be the most promising. Among these measures are easing capital requirements for banks, optimization of “concessional windows”, and partial transfer of MDBs’ obligations to private investors, including through creating investment platforms and special funds. Although these mechanisms in various forms have already been adopted by key MDBs, given insufficient levels of mobilization, it is necessary to remove obstacles to their more active use.

The new global agenda, with Agenda 2030 at its core, is ambitious, comprehensive, and universal. The three central goals now are to reignite growth, deliver on the sustainable development goals (SDGs), and meet the ambitions of the Paris climate agreement aimed at mitigating climate change and adapting to its effects. Achieving these goals will require a significant scaling up and reorientation of investments, especially for sustainable infrastructure and human development.Implementing this agenda is urgent, as the world is witnessing the largest wave of urban expansion in history and more infrastructure will come on stream over the next 15 years than the world’s existing stock. This is also the last opportunity to manage remaining significant demographic transitions. The capital investments and technological choices made in the coming two decades will lock-in carbonization, urbanization, and demographic trends that will determine the future of humanity and our planet for the rest of the century and beyond. The backdrop for achieving these ambitions is challenging. In many countries, investment and productivity growth have decelerated, there is growing inequality and persistent unemployment, fragility and tensions are rising, and the incidence and vulnerability to shocks has grown. At the same time, major opportunities exist to tap the potential of new technologies and the growing capacity of the private sector. Today’s hyper-connected world requires a mix of activities spanning private goods, national public goods, and regional/global public goods to meet the challenges of sustainable development. The agenda requires government intervention to reach adequate scale, to take social and environmental sustainability seriously, and to manage spillovers across sectors and borders. It also requires stepped up international cooperation to drive transformative change and mobilize financing on an unprecedented scale. With their highly effective capacity to help countries strengthen policy and institutional foundations and to leverage finance, multilateral development banks (MDBs) have a central role to play. They are trying to respond, but human and financial constraints and unclear and expanded mandates from shareholders are holding them back. Clarifying their mandates and addressing the constraints are essential to enable them to scale up and make more effective their support for the new global agenda. The unique financial structure of the MDBs allows them to leverage contributions from MDB shareholders and multiply them into financing at low cost. This financial capacity can in turn further crowd-in other sources of finance, especially from the private sector. With better system-wide coordination, MDBs can scale up their impact to deliver for increasingly differentiated clients, but this requires shareholder consensus on, and financial support for, expanded efforts. Independent evaluations suggest that each MDB is individually performing well, but the system as a whole is not delivering enough. This paper suggests ways to improve policy and operational coherence among MDBs and outlines how better shareholder governance could bring this about. It focuses on the need for stepped-up financing of investments in developing countries, but should be viewed in the broader context of managing globalization, especially with regard to trade and financial stability.

Since its establishment, the New Development Bank (NDB) has been actively seeking to establish cooperation with other multilateral financial institutions. This strategy was stimulated by the fact that projects funded by multilateral banks often require large-scale investments and significant expert resources, or are associated with risks that a single lender cannot undertake independently. The purpose of this article is to study the mechanisms of cooperation between the NDB and “traditional” multilateral banks, as well as the national development banks of the BRICS grouping of Brazil, Russia, India, China and South Africa. This article seeks to forecast the future of cooperation in order to better understand the overall prospects of the NDB. To do so, existing formats of engagement between the NDB and other development banks are analyzed, as are their approaches to participation in joint projects. The article finds that the NDB, despite its differences from the “traditional” banks, seeks to establish an effective division of labour and cooperation with them, primarily because of their common goal of reducing the large-scale deficit in infrastructure investments. Despite the fact that none of the projects approved by the NDB so far involves other multilateral development banks, the launch of official cofinancing with them is expected in the very near future. Depending on the scenarios of NDB expansion, its joint loan portfolio with other multilateral banks in five years could reach $58 to $82 billion. As for national development banks of the BRICS, the NDB has also laid a formal framework for cooperation with them, even while it has not yet resulted in any concrete projects. Thus, in order to successfully implement its strategy of engagement with other financial institutions in the future, the NDB needs to intensify practical cooperation with national banks in the areas identified in the relevant declarative documents.

The G20 is committed to promoting infrastructure investment and has called on multilateral development banks (MDBs) to increase their infrastructure lending to help boost global growth. Alongside long-standing MDBs such as the World Bank and Asian Development Bank (ADB), new MDBs such as the Asian Infrastructure and Investment Bank (AIIB) and the New Development Bank have been established, and G20 members would like both old and new multilateral banks to scale up their infrastructure investment by developing a pipeline of bankable projects. Even with all the MDBs investing more, they will not be able to satisfy the global need for infrastructure. What they can do, however, is start to fill the infrastructure gap by catalyzing private investment and cooperating on standards and regional infrastructure. Concerns have been raised about the geo-political implications of the new MDBs which underscore the need for MDB cooperation. There are challenges to and opportunities for this cooperation. The G20 needs to be clear about the role it can play in encouraging MDB cooperation and infrastructure investment, and must also be aware of the limitations on its role given that each MDB has its own mandate. Specifically, the G20 can downplay the perceived trade-off between efficiency and standards in the MDBs, encourage cooperation on new standards for sustainable or green infrastructure, invest in the Global Connectivity Alliance as a coordinating body for the MDBs and help align the G20 work on infrastructure with the United Nations Sustainable Development Agenda

Most experts on multilateral development banks (MDBs) mention the possibility of large-scale co-financing in their forecasts concerning their future operations. However, interaction between MDBs and other actors, including co-financing, is rarely considered as a research problem for analytical and scientific papers. Yet this type of cooperation is one of the most important factors of effectiveness for the entire system of MDB financing. Thus, working in partnership with governmental institutions (development assistance agencies, export credit agencies, etc.), MDBs help attract additional financial resources and expertise in the countries where they are active. Working on state, regional and global levels, multilateral banks cooperate not only with governmental institutions, but also with private sector and civil society representatives. Such cooperation benefits both parties. In addition to mobilizing additional financial resources, it improves project preparation and implementation, taking into account national peculiarities, while partner institutions get a chance to use their experience and expertise. Given the recent establishment of the New Development Bank (NDB) and Asian Infrastructure Investment Bank (AIIB), they are unlikely to achieve their main goal of narrowing the infrastructure financing deficit in developing countries without active cooperation with other institutions. This article discusses the results and examines the prospects of the NDB and AIIB cooperating with traditional MDBs. It also focuses on the new banks’ engagement with other financial institutions, including commercial banks and national development banks. The author analyzes interbank memorandums and agreements as a formal basis for cooperation between various institutions, and examines in detail the examples of co-financing infrastructure projects by the new and traditional MDBs, as well as new multilateral cooperation mechanisms established by development banks. The author concludes that the new banks’ strategies differ from those of other institutions, and each has its own advantages. The AIIB seeks to establish cooperation primarily with large institutions to use their considerable experience and explore co-financing opportunities for large-scale projects. The NDB, with limited membership and geographical representation, focuses on, inter alia, cooperation with MDBs with a small number of participants, national development banks and commercial banks, which allows it to adopt the best international practices and gain experience in specific countries, receive consultative support for issuing bonds and improve financial management.

This article examines the role of multilateral development banks (MDBs) in financing education development at the national level. It evaluates the share of national expenditures spent on education, analyzes loan structures by stage of education, and highlights key measures and instruments. In the context of the global economic slowdown, expected to continue for the long term, the most important objective is to identify new drivers of economic growth as traditional sources are exhausted. One of the main sources of economic growth is human capital, especially with regard to the gradual transition from an industrial economy to a service and knowledge economy. Human capital accumulation is particularly important in developing countries. Most developing countries face insuperable obstacles in building human capital accumulation particularly with regard to education development. The potential contribution of MDBs to human capital accumulation has been underestimated and there is a lack of empirical research on this issue. An evaluation of current experience will help identify opportunities for MDBs to increase their role in education performance, which in turn could have a positive impact on economic growth in developing countries. This article addresses this issue by studying MDBs’ financing of education projects in emerging economies. The authors collected a database that includes information on the volume and structure of financing with a breakdown by education stage. It was based on more than 500 projects funded by key MDBs. Sources included loan and grant agreements, project interim reports and project completion reports. The authors calculated an average annual ratio of MDB education financing to public expenditure for each country in the final selection. Results showed that the ratio of average annual MDBs allocations to average government expenditures on education is relatively low — between 1.5% and 4.0% for most countries. The largest share can be seen in relatively small countries, where government expenditures stay at low levels. Large developing countries such as Brazil, India, Indonesia and Mexico are lead in terms of absolute volumes of financing from MDBs. The authors also show that most projects during period researched aimed at reducing inequality, developing infrastructure, improving teacher qualifications and reforming the management of education system. The authors also give recommendations for the BRICS New Development Bank.