Finding new pathways
Innovative development financing instruments
Since the UN conferences in Monterrey (2002) and Doha (2008) there has been much discussion of innovative development financing instruments. These mechanisms fall into three categories:
Raising additional public funds
Deploying public funds as a lever or catalyst for private capital
Using funding more efficiently.
Any individual innovative financing instrument may fall into one or more of these categories.
For an overview of innovative financial instruments used to raise funds for international development, visit the "Focus on Development" section of the KfW Development Research website, which can be found here (PDF 108 KB).
The Leading Group on Innovative Financing for Development, of which Germany is a member, was set up in 2006. Sixty-three countries, international organisations, foundations and NGOs are now part of the group: they exchange information and work together on a voluntary basis. A number of working groups are exploring the use of innovative financing instruments in different sectors.
Germany draws on instruments from all three categories:
At international level, the following innovative financing instruments are also in use or under discussion:
International Finance Facility for Immunisation (IFFIm), advance market commitments for vaccines, taxation of international financial transactions, an airline ticket levy and new market mechanisms under the Kyoto Protocol or a Kyoto follow-up agreement.