European Development Finance Institutions

The Association of European Development Finance Institutions (EDFI) is a collaborative platform for 15 European bilateral Development Finance Institutions (DFIs). Established in Brussels in 1992 as a non-profit association, its primary mission is to foster private sector development in low- and middle-income countries. EDFI achieves this by promoting the joint interests of its members, shaping policy, driving innovation in industry standards, and facilitating cooperation with EU institutions and other international bodies.

The association was founded by seven European DFIs to enhance cooperation and knowledge sharing, a number that has since grown to 15 institutions. A significant milestone was the establishment of the EDFI Management Company (EDFI MC) in 2016. This entity was created to manage joint financing facilities in partnership with EU institutions, thereby increasing the efficiency and impact of their collective investments. Rodrigo Madrazo was appointed CEO of the EDFI Management Company in late 2022.

EDFI's business model centers on investing in private sector projects that are commercially sustainable but might not otherwise secure financing. The member DFIs, which are government-backed, have a higher risk tolerance and a longer-term investment horizon than typical private investors. This allows them to support enterprises in challenging markets, with a focus on creating jobs, boosting sustainable economic growth, and combating climate change in alignment with the UN's Sustainable Development Goals and the Paris Agreement. The association's combined portfolio stood at €60.2 billion at the beginning of 2024. The organisation and its members operate through a blended finance approach, using public funds to attract and leverage significantly larger amounts of private capital for projects in sectors like renewable energy, agribusiness, and financial services.

Keywords: development finance, impact investing, private sector development, emerging markets, sustainable investment, blended finance, climate finance, project financing, EU development policy, institutional investors, job creation, poverty alleviation, SME financing, renewable energy investment, sustainable agriculture, public-private partnership, financial inclusion, international development, global south investment, SDG alignment