Tag: development finance

PhD students’ perspectives on the COP27 negotiations

The COP27 UN Climate Change Conference came to an end on 20 November. Since then, researchers have analysed the outcomes, highlighting both successes and failures. The SweDev secretariat asked two PhD students from Lund university who participated in the conference about their roles, experience, and reflections. Fabiola Espinoza Córdova and Alicia N’Guetta are both PhD students at the Centre for Sustainability Science at Lund University (LUCSUS) and are part of the European Union funded project Marine Coastal Ecosystems Biodiversity and Services in a Changing World (MaCoBioS). Alicia N’Guetta’s research also takes place in the project Recasting the disproportionate impacts of climate change extremes (DICE).

Research area and role at COP27

Fabiola: My research is embedded in the context of the MaCoBioS project and involves critically examining the implications of discourses on climate change adaptation.
In particular, I focus on Small Island Developing States (SIDS) in the Caribbean and Barbados as a case study to understand how adaptation informs local planning, considering issues of scale and associated power dynamics. I participated in COP27 as a researcher from the Lund University delegation.

Alicia: My research topics are loss and damage, adaptation, marine and coastal biodiversity and livelihoods. Specifically, I have been looking at loss and damage to fisherfolks in tropical areas, with the main case study being Martinique, a department and region of France in the Caribbean. As a researcher from the Lund University delegation, my role at COP27 was to understand the interactions, the negotiation process, the framing, and the challenges surrounding loss and damage by different actors.

Expectations and their fulfilment

Fabiola: My main objective in attending the COP was to observe the discursive disputes on adaptation and adaptation finance issues, particularly between Caribbean SIDS and developing country negotiators. That is, what ideas on adaptation are supported by negotiators, how they are produced, negotiated, and disseminated, and by whom. In addition, I wanted to establish contacts with Caribbean SIDS negotiators and other intergovernmental organisations involved in supporting adaptation in the Caribbean.

I would say that overall, I met my expectations. I had informal discussions with several SIDS negotiators and gain insights into their views on the process, what ideas they agreed with and what arguments they used to justify them. However, I must conclude that the process did not go as smoothly as expected. The discussions on possible solutions, compromises and balancing positions take place behind closed doors, making it difficult to fully observe how consensus is reached and the power dynamics that unfold. In addition, the SIDS delegations were rather small, so it was difficult to get in touch with the negotiators as they were busy with meetings for most of the day.

Alicia: Before the COP, I expected the issue of loss and damage to be on the agenda. I was also curious to see whether the Santiago network would be operationalised and whether funding would be made available for loss and damage. Progress has been made in all these areas. I had also hoped to meet different types of climate change actors who were particularly concerned with my research topics. Loss and damage was institutionalised in 2013 and since 2015, article 8 of the Paris Agreement has referred to the importance of: ”averting, minimizing and addressing loss and damage associated with the adverse effects of climate change”. Several events this year, such as the drought in Europe or the floods in Pakistan, show the urgent need to work towards these objectives.

Learnings and conclusions from COP27

Fabiola: The most important thing I learned from my participation in the COP is the importance of framing and discourse in shaping negotiation processes, which largely determine the influence of parties in the United Nations Framework Convention on Climate Change (UNFCCC) processes. While the media provides insight into some countries’ positions, it is invaluable to observe how the negotiations unfold and talk to the key actors involved for a better understanding of the processes.

I was particularly impressed and inspired to see how the SIDS parties fought for climate justice during the negotiations until the very end. While climate change has become a global issue and adaptation is now seen as a global goal to be achieved, financing for adaptation and loss and damage remain at the centre of heated debates between developed and developing countries.

The decision at this COP27 to establish a Loss and Damage Fund gives more hope to the most vulnerable countries to help them in coping with slow-onset events and climate disasters. The latter was seen as an achievement for vulnerable countries, particularly for SIDS. I felt privileged to be able to observe this process up close and look forward to incorporating this perspective into my research!

Alicia: COP very clearly highlighted the importance of science. Science was strongly considered in the discourses on why we need to act now, what we should think about and what our priorities should be. In my field of research, there are still significant gaps in conceptualising and measuring loss and damage, especially intangible losses such as loss of identity, biodiversity, knowledge, sense of place, etc. As scientists, we need to consider the context and the past, present, and future to fully understand climate change impacts.

I think that the COP, as the highest decision-making body of the UNFCCC is an important platform for all climate change actors to share, reflect and act to achieve previous agreement targets such as the Paris one. However, I strongly believe that a continuous increase in synergies between the three pillars of international climate change: mitigation, adaptation, and loss and damage is critical to address this global challenge.

Read about the COP27 post-match analysis, where an expert panel shared insights on the COP27 negotiations.


Interviews by Roksana Rotter, Communication and Research Intern for SweDev. Edited by Roksana Rotter and Alice Tunfjord, Associate, SweDev at Stockholm Environment Institute (SEI).

SweDev interview series: George Marbuah on development finance

Finance for development.

George Marbuah is a Research Fellow at SEI Headquarters and at the Stockholm Sustainable Finance Centre (SSFC). He is also part of SEI’s Development and Aid Policy Team. Marbuah and colleagues from ODI have examined the role of development finance institutions (DFIs) in promoting development in their recent research.

George Marbuah, Research Fellow at SEI and SSFC.

“DFIs are in a unique position to lead the transformation of the financial sector towards a low-carbon transition and become even more responsive to financial, socio-economic and climate crises.” said Marbuah.

An SEI report led by Marbuah published earlier this year examined the development plans of three African countries, Kenya, Ethiopia and Ghana, and the perspectives of six DFIs: Swedfund, Norfund, Finnfund, DEG, IFC and CDC (now British International Investment).

DFIs are specialized development organizations or financial actors that are usually majority-owned by national governments. They invest in private-sector projects in low- and middle-income countries to promote direct and indirect development impacts such as job creation, contribution to government revenue through taxes and sustainable economic growth while ensuring returns on investment.

In doing so, DFIs employ different strategies such as investing in domestic financial intermediaries (including banks and microfinance institutions through loans and debt financing, equity and/or the provision of additional non-financial services, including – but not limited to – technical assistance on setting standards on gender or the environment.

Q: What is the role of DFIs in developing countries in terms of achieving the SDGs?

A: Irrespective of where they invest, DFIs seek among other things to achieve development impact by ensuring that they provide additional capital and not replace existing private financing as well as non-financial services, generate decent employment and pay taxes as stipulated by the recipient country’s regulations.

By showing other investors that even risky investments are economically viable, DFIs can also have catalytic effect by bringing other investors, including DFIs, onboard to invest in unexplored opportunities. It is noteworthy that DFIs differ in terms of their mandate, size and business models, so it can be challenging to evaluate and measure their specific development impact and contribution to all the 17 SDGs. Nonetheless, shareholders in recent times have ramped up their expectations for DFIs to contribute more and respond to development objectives and global challenges and initiatives such as the SDGs and climate change (Paris Agreement).

The evidence we have observed shows that many DFIs are responding positively to these expectations and developing countries are the main beneficiaries of these efforts. Specific examples include Swedfund (Sweden), FMO (the Netherlands) and Proparco (France) explicitly demonstrating commitment that their investments contribute toward SDG 13 (climate action), other SDGs and the Paris Agreement in general. Several members of the European DFI association (EDFI) have either stopped or committed to stopping lending to fossil fuel projects by 2030. Notable examples include the European Investment Bank (EIB), IFU (Danish DFI) and Swedfund, which has invested in only renewable energy since 2014.

Q: Are there potential obstacles for DFIs contributing to national development goals?

A: Traditionally, most DFIs do not engage directly with national governments, a position we tried to question in our research with the aim of suggesting that there could be value in doing so, thereby taking advantage of additional commercial opportunities and enhancing the development impact of DFIs. We try to understand the role of DFIs regarding sustainable development that aligns with national development objectives or priorities that emphasize the SDGs in Ethiopia, Ghana and Kenya and interaction with the six selected DFIs for their perspectives on this issue.

Among other things, our interaction with the sampled DFIs suggests that country-level development plans do not necessarily drive their investments and in certain cases, these plans may present obstacles to investment. These barriers also vary from case to case. To the extent that DFIs differ in mandate, size and resources, including capacity, several of them are constrained by lack of capacity and in-country office presence in all the jurisdictions they invest. It takes time and expertise to review and synthesize national development plans whose quality is often questioned by many DFIs. Most small bilateral DFIs would rather respond to their shareholder needs by creating global sector and instrument strategies and not by specific countries, with the exception of large multilateral DFIs such as the IFC of the World Bank Group.

Additionally, national strategic documents may lack detailed data that could be used to identify existing investment gaps. Certain countries are not clear about their consideration of the SDGs, a premise many bilateral DFIs use for their investment decisions. Of the countries reviewed, only Ethiopia was explicit in the mention of the SDGs in its development plan, while Ghana and Kenya did it implicitly.

Moreover, the national development goals may not fit with the DFIs’ strategies and their willingness to distribute their resources for which they want to be accountable. A risky business climate due to an unstable political administration and governance with weak institutions may also be a hindrance depending on the DFI’s structure, credibility and historical position.

According to several DFIs, since the continuity of government programmes and policies is uncertain, national development plans should not be the major determinant of DFI investment decisions. Instead, DFIs should invest according to their own strategies and engage in targeted dialogue with governments and their plans where necessary. These discussions should focus on finding value in opportunities that complement those that exist in the private sector, with the aim of increasing development impact. In particular, DFIs expect that such targeted interaction should lead to improving the business and regulatory environments to protect their strategic investments, resulting in enhanced impact.

Q: What measures can DFIs take to align their investments with the countries’ development plans? 

A: Among our key findings is that most DFIs do not significantly consider national development plans in their operations. To the largest extent, investment decisions are driven by internal objectives and strategies. At the same time, DFIs do acknowledge that there may be opportunities to engage more with national governments, albeit in a limited and targeted way. We suggest the following four steps DFIs can undertake to realize the benefits of these types of engagements:

Step 1: policy documents to identify strategic sectors besides private sector opportunities.

Step 2: Compare strategic sectors with current investment activities, including country investment portfolios, to understand where and how they fit together. This step will help DFIs determine where funding is lacking. The caveat here is that not all DFIs have the capacity and resources to tailor their investment strategies to each country’s priority sectors. While larger DFIs with more resources could undertake these activities, smaller ones may allocate their limited resources in a more strategic way, such as prioritizing where they invest the most.

Step 3: Engage with key stakeholders to secure support or buy-in for identified sectors and aligned sector investment strategies. They could be business associations and industry players, other private investors or DFIs and relevant government agencies.

Step 4: Scope out opportunities for feasible investment in target priority sectors compatible with their overall strategies.

Q: SweDev aims to connect development researchers across Sweden to strengthen collaboration with practitioners. What are the key research findings that you would like to share with our community? 

A: This is an important study to share with the SweDev network. The findings could be useful to better understand what DFIs are doing and can improve. The implications can also guide other actors in the development sector on how to align their investments or activities with localized needs that are likely more impactful. The four steps mentioned above can be quite useful in such an exercise.

The study also serves to correct certain misconceptions about DFIs and how they operate and recognize that we need to start discussions with governments by moving away from traditional approaches and looking at the bigger picture. Perhaps the question we may want to answer in the future resolves around the role of government (and policies) and other actors in making DFI investments even more impactful in recipient countries.


Written by Roksana Rotter, Research Intern and Ylva Rylander, Communications Officer within SweDev at SEI. Edited by George Marbuah and Vivian Tse at SEI.

Gambling on Development

Nairobi National park, Africa.

SweDev and SEI invited Stefan Dercon, Professor of Economic Policy at the Blavatnik School of Government and Director of the Centre for the Study of African Economies at the University of Oxford, to highlight the outcomes from his latest book “Gambling on Development: Why some countries win and others lose”.

The topic of the SEI and SweDev dialogue was how countries are managing growth and sustainable development. Professor Dercon was introduced by George Marbuah, SEI Research Fellow.

“It was a pleasure to host Professor Dercon who delivered a great and interesting keynote about why some countries win and others lose in development. Drawing on his extensive academic research and policy experience, he provided new insights on why this may be the case. Professor Dercon provocatively argued that the answer lies not in specific policies per se in many developing countries, but rather in a ‘development bargain’, where the elite in a particular country is able to ‘shift from protecting their own positions to gambling on a growth-based future’.”

George Marbuah, SweDev member and SEI Research Fellow

Gambling on Development: Why some countries win and others lose

The book draws on Professor Dercon’s academic research and his policy experience across three decades and 40-odd countries, exploring why some countries have managed to settle on elite bargains favoring growth and development and others did not.

“Aid is a little bit like dancing the tango, it should be led by someone and I think it should be led by the country,” said Dercon during his presentation.

Professor Stefan Dercon

Watch the recording:

SEI and SweDev dialogues on development research. Video: SEI / SweDev.

Professor Stefan Dercon

Stefan Dercon is a Professor of Economic Policy at the Blavatnik School of Government and Director of the Centre for the Study of African Economies at the University of Oxford. Professor Dercon combines his academic career with work as a policy advisor, providing strategic economic and development advice, and promoting the use of evidence in decision making.

SEI and SweDev dialogues on development research

“We had an exciting dialogue with over 30 participants from the global south and Sweden, who posed questions to Professor Dercon. We invite development researchers around the world; both Swedish researchers, international researchers, and researchers from the global south, to give a short talk about their ongoing or finalized research.”

Janet Vähämäki, Director of SweDev and SEI Development and Aid Policy Team Lead

The series of dialogues on development research, an initiative taken by the Development and Aid Policy Team at SEI Headquarters and the Swedish Development Researchers Network (SweDev), kicked off in the end of 2021. Our research-based community has raised the need for learning spaces and dialogue platforms for development research. This dialogue with Stefan Dercon was part of SEI’s and SweDev’s dialogue series on development research.

@SweDevNetwork @SEIresearch
#Agenda2030 #SustainableDevelopment #DevelopmentResearch #DevelopmentPolicy

Read about the dialogue with Professor Dercon

Read about the book

New report: Understanding the role of development finance institutions (DFI)

Makati, Manila.

The SEI report “Understanding the role of development finance institutions in promoting development: an assessment of three African countries,” is now launched.

About the report by Stockholm Environment Institute (SEI)

The report seeks to understand the role of development finance institutions (DFI) in supporting the objectives of national development plans, particularly those emphasizing the SDGs, set by the developing countries within which DFIs invest.

The authors focus on DFIs that provide finance to the private sector under concessional terms, seeking a profit. The analysis of DFI funding is set within the broader context of the role played by financial flows, such as commercial finance and foreign aid (i.e. Official Development Assistance, ODA), in supporting national development objectives. Three country case studies are used as a lens for the analysis, namely Kenya, Ethiopia and Ghana.

The report defines the role that DFIs play as investors as well as their potential contribution to development outcomes, including the achievement of the Sustainable Development Goals (SDGs).

Finally, the report identifies opportunities where DFI investments could support sectors deemed as strategic by governments following the DFI investment principles of financial additionality, development impacts and catalytic effects. The paper suggests four steps that DFIs could follow to increase their level of funding towards strategic sectors. These are:

  • to identify the strategic sectors
  • compare these with current DFI investment activities
  • discuss how DFIs could support investments in these sectors with key stakeholders (private sector, other financing institutions and the government), and
  • to invest in the target priority sectors.

Comments from the authors

Regarding the purpose of the joint research, George Marbuah, Research Fellow at SEI Headquarters, said:

“DFIs can be even more strategic and transformational with their investments by aligning their portfolios with country development strategies. This report shows how DFIs can enhance their development impact in Africa.”


Text adapted by the SweDev Secretariat from the original publication post on the SEI website.