The European Investment Bank Global Forum in Luxembourg focused on the €300 billion Global Gateway initiative and the challenge of mobilising private capital at scale for industrial development.
Structuring opportunities for investors
Dr. Hubert Danso, chairman of Africa Investor, argues that the problem is not a lack of capital but a shortage of investable development. Global institutional investors manage more than $300 trillion, yet this capital allocates through mandates and asset classes, not persuasion or project presentations.
In the African context, the current development finance architecture translates into a stark mobilisation ratio: for each dollar that public development funds commit, only between $0.20 and $0.38 of private capital actually flows in. This performance sits far below the aspirational benchmark of $10 of private capital for every development dollar, a target that has been cited repeatedly in policy circles.
Institutions that mobilise capital in the trillions do so by creating asset classes capable of absorbing that capital. History shows this pattern: venture capital ecosystems were pioneered by the Yale University Endowment, global infrastructure allocations were driven by Canadian pension funds like CPP Investments, and responsible investment leadership was advanced by Norway’s Government Pension Fund Global.
Global Emerging Markets (GEMs) investment risk data must be democratised to enable global investors to analyse opportunities using transparency standards required by institutional portfolios. Partnerships between Global Gateway, the European Investment Bank, the European Commission, the EBRD and institutional investors should deepen to jointly design and scale investable asset classes for development.
The cost of a fragmented system
Developing countries have paid more than $15.6 billion per year in excess financing costs. Global institutional investors have missed more than $6 trillion in potential returns over the past two decades because these opportunities were never structured as institutionally investable asset classes.
European instruments have demonstrated the potential to mobilise up to €15 of investment for every €1 of public capital during the Forum. European Council President António Costa observed that this gap is not a capital gap but an architecture gap. As the EU seeks to strengthen industrial supply chains and deepen economic ties with Africa, mobilising institutional capital into large-scale infrastructure and industrial platforms becomes central to the credibility of the Global Gateway strategy.
