A webinar series on private finance in aid
Join Eurodad for two webinars that will take a close look at the relationship between private finance and aid.
Join Eurodad for two webinars this month that will take a close look at the relationship between private finance and aid.
On 13 November we will bring together a panel to initiate critical dialogue on the PSI agreement one year after it came into force. The intention is to foster a greater understanding about how the agreement, which changed what counts as aid, is being implemented - especially in terms of the Official Development Assistance (ODA) eligibility of PSIs. This will ensure a better understanding of how they work and provide everything CSOs need to know to engage with them in their own contexts.
The webinar will build on Eurodad’s report on PSI titled “Aid under threat: The shadowy business of private sector instruments,” and will address key questions about what the agreement means for the integrity of ODA and development finance in practice, the drivers, risks and opportunities, with a focus on the initial experience with PSIs in country and exploring alternatives.
The second webinar will take place on 26 November, and will focus on the promotion of guarantees as a financing instrument to allocate aid resources. It will be an opportunity to launch a report by Eurodad’s Farwa Sial and C.P. Chandrasekhar on guarantees for development and climate action.
Guarantees are increasingly being utilised as an instrument of development finance by providers of ODA. This has raised serious concerns among CSOs about the role of ODA and for what purpose. Guarantees can be understood as legally binding agreements under which a guarantor agrees to pay part or the entire amount due on a loan, equity or other instrument in the event of non-payment by the obligor or loss of value in case of investment.
As an outcome of last year’s PSI agreement it is now possible to quantify the “donor effort” of guarantees as ODA by applying a discount rate percentage to the guarantee amount. If the guarantee is eventually called in, then the full “grant equivalent” can be reported as ODA. In short, guarantees can be counted as ODA. Nevertheless, each donor has implemented guarantees in its ODA model in different ways and the impact of new PSI rules on guarantees remains to be seen.
To unpack these new developments, this panel will discuss the implications of counting guarantees as ODA, variations between different donor models and issues related to measuring financial and development additionality of ODA as guarantees. At the same time, it will be an opportunity to place this discussion in the broader trends of an increasing role of private finance in development and climate action.