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Strong safeguards are needed when investing public money via private financial intermediaries

Martin Atkin

25 Jan 2018 14:38:46

You wouldn’t just hand your money over to someone else to invest without asking them what they were going to do with it, would you? If you were a public body, at the very least you’d want to make sure it wasn’t used in a way that damaged the environment or undermined human rights. Increasingly, however, there are concerns that development finance institutions (DFIs - government-backed institutions that invest in private sector projects in developing countries) - are lending money to private sector financial intermediaries (FIs) to invest in infrastructure projects in developing countries - without ensuring that proper environmental and social safeguards are in place. These intermediaries - private commercial banks, private equity funds and infrastructure funds - are essentially go-betweens ...