13 December 2021

G7 Development Finance Institutions create platform to boost investment in fragile states

  • New DFI collaboration will be based in London and headed by Vivianne Infante, CDC’s Ethiopia Country Director

Development finance institutions funded by the G7 nations have announced the launch of a new platform designed to boost investment in fragile and conflict-affected states in Africa.

The Africa Resilience Investment Accelerator (ARIA) aims to unlock investment in fragile states through collective influence and by pooling expertise to overcome the challenges of providing capital in these countries.

Historically, DFIs have tried to originate investments in fragile states with mixed results. ARIA aims to engage proactively in such markets in a way that would improve investment-readiness – both a country’s readiness to benefit from DFI investment and DFIs’ abilities to invest in these economies.

The UK’s FCDO will support ARIA, which will be incubated in CDC’s office in London. Vivianne Infante, CDC’s current Ethiopia Country Director, will be seconded to run ARIA for the first two years.

She said: “DFIs have a mandate to provide investment to those that need it the most. Fragile states are desperately in need of capital to provide jobs and bring economic growth but investing in these markets is complex and challenging. ARIA’s work will be vital in addressing these challenges.”

ARIA will also identify several countries in which it will provide targeted coverage, develop expertise and arrange country missions. The intention is for ARIA’s country activities to foster greater collaboration amongst DFIs, with a longer-term ambition for more coordinated activities.

It is expected that ARIA’s work will uncover additional investment opportunities in targeted countries.

UK Minister for Africa Vicky Ford said: “Providing honest and reliable finance is one of the most effective ways to support countries to recover from conflict, create jobs and boost economic growth.

The Africa Resilience Investment Accelerator will help development finance institutions to support the G7’s landmark commitment of providing $80 billion of investment in the African private sector by 2027.”

ARIA’s areas of focus will be:

  1. Market mapping: The development of a tool containing investment-related information, including key sectors, relevant local partners, financial intermediaries, potential investees and barriers to investment.
  2. Integrity: A group to exchange views and experience around challenges relating to integrity, especially in investment due diligence processes, and to agree on common standards, approaches to work collectively to leverage information sharing across DFIs.
  3. Conflict Sensitivity: The harmonisation of best practices around conflict sensitivity, including the development of common standards and tools that the DFI community can use to manage investment activities in areas that are at high risk of conflict.

ARIA will be a key partner to the Oxford Fragility Forum. The Forum will remain the thinktank and academic stronghold at the forefront of issues around investment in fragile countries. ARIA will act as an action-driven platform where ideas discussed at the Fragility Forum can be put into practice.

The members of ARIA are: CDC Group, US International Development Finance Corporation, Proparco, FinDev Canada, Cassa Depositi e Prestiti (CDP), in its role as Financial Institution for International Development Cooperation (Observer), JICA (Observer), Swedfund, International Finance Corporation, African Development Bank, European Investment Bank (Observer) and the European Bank for Reconstruction and Development (Observer).

ARIA’s website is: https://www.ariainvests.org/

CDC is becoming British International Investment