Over the past 50 years, multilateral development financial institutions played a key role in supporting financing for key infrastructures, job creation and people’s livelihood improvement in developing countries. However, there are still financing demands equaling USD 1 trillion for infrastructure every year. Facing such increasing financing gaps, World Bank, International Monetary Fund and Asian Development Bank, pillars of traditional multilateral financial institutions, are unable to meet financing demands of countries in addressing climate change and sustainable development at this stage, and such funding gap is particularly important for developing countries.
In 2014, New Development Bank and Asian Infrastructure Investment Bank were established and since then, multilateral development financial institutions in China made breakthroughs. These institutions provide new channels for global development financing, and are expected to make up for that funding gap. However, it will be a challenge for policy makers and managers of new multilateral development banks to respond to diverse needs of borrowers and improve efficiency of bank operations while still taking into account concerns of the international community about various governance issues.
As China's environmental NGO, we have been tracking and researching governance of development finance since 2014 to form innovative systems and financing mechanisms which respond to global climate actions and green inclusive development at present and in the future.
