Course overview

This course introduces the principles, institutions, instruments, and practical techniques used to finance economic and social development. It examines how development finance institutions help address funding gaps where conventional commercial finance may be unavailable, too costly, or too risk-averse. DFIs commonly use loans, equity, guarantees, grants and advisory support to promote sustainable investment and positive development outcomes.bii+1

The course also covers project finance, blended finance, public-private partnerships, impact investment, risk assessment and development-impact measurement.

Learning objectives

By the end of the course, participants should be able to:

• Explain the purpose and role of development finance.

• Distinguish development finance from commercial banking, public finance and foreign aid.

• Identify the main types of development finance institutions.

• Evaluate development projects using financial, economic, social and environmental criteria.

• Assess project risks, repayment capacity and development additionality.

• Compare loans, equity, guarantees, grants and other financing instruments.

• Structure blended-finance and public-private partnership transactions.

• Prepare a basic project appraisal and financing proposal.

• Measure development impact using appropriate indicators.

• Recognise governance, compliance, sustainability and responsible-investment requirements.

Course modules

Module 1: Foundations of development finance

• Meaning, scope and evolution of development finance.

• The relationship between finance and economic development.

• Market failures and financing gaps.

• Infrastructure, enterprise, employment and inclusive-growth financing.

• Development finance and the Sustainable Development Goals.

• The balance between financial sustainability and development impact.

Module 2: The development finance ecosystem

• National, regional and multilateral development finance institutions.

• Ministries of finance, central banks and regulators.

• Commercial banks, institutional investors and private-equity funds.

• Donors, foundations, civil-society organisations and development agencies.

• The roles of institutions such as the World Bank Group, IFC and regional development banks.

• Coordination between public and private sources of capital.

Module 3: Development finance instruments

• Senior and subordinated debt.

• Term loans, lines of credit and concessional loans.

• Equity, quasi-equity and venture capital.

• Grants and technical-assistance facilities.

• Guarantees, insurance and credit-enhancement instruments.

• Leasing, factoring and local-currency financing.

• Green, social and sustainability-linked bonds.

• When to use each instrument.

Module 4: Financial markets and resource mobilisation

• Domestic and international sources of development capital.

• Capital-market development.

• Foreign direct investment and institutional capital.

• Securitisation and fund-based financing.

• Co-financing and syndication.

• Currency, interest-rate and refinancing considerations.

• Mobilising private investment without displacing commercial finance.

Module 5: Project development and preparation

• Identifying viable development projects.

• Feasibility studies and project-concept development.

• Technical, legal, commercial and environmental due diligence.

• Project sponsors, stakeholders and transaction advisers.

• Project preparation facilities.

• Common causes of project failure.

• Building a credible project information memorandum.

Module 6: Project appraisal and credit assessment

• Market and demand analysis.

• Technical and operational assessment.

• Management and sponsor evaluation.

• Financial modelling and cash-flow forecasting.

• Key ratios: debt-service coverage, loan-to-value, gearing and return measures.

• Economic cost-benefit analysis.

• Sensitivity, scenario and stress testing.

• Credit scoring, risk ratings and investment-committee papers.

Module 7: Project finance

• Corporate finance compared with project finance.

• Special-purpose vehicles and ring-fenced cash flows.

• Sources and uses of funds.

• Debt capacity and repayment structures.

• Security packages and lender protections.

• Off-take agreements, concessions and availability payments.

• Construction, operating and refinancing risks.

• Case study: financing an energy, transport or water project.

Project-finance training is a common component of professional development-finance programmes, alongside advanced project appraisal, risk management and funding structures.

Module 8: Blended finance and innovative funding

• Definition and rationale of blended finance.

• Concessional capital and the “additionality” principle.

• First-loss capital, guarantees and viability-gap funding.

• Risk-sharing between governments, DFIs and private investors.

• Impact investment and results-based financing.

• Climate finance and transition finance.

• Structuring a blended-finance transaction.

• Avoiding market distortion and excessive subsidy.

Module 9: Public-private partnerships

• PPP models and when they are appropriate.

• Build-operate-transfer, concessions and availability-payment structures.

• Public-sector obligations and contingent liabilities.

• Revenue risk, demand risk and affordability.

• Procurement, value-for-money and contract management.

• PPP project preparation and bankability.

• Case study: a public infrastructure transaction.

Module 10: Sector applications

Participants examine how development finance is applied to:

• Infrastructure and transport.

• Energy, renewable energy and climate resilience.

• Water and sanitation.

• Agriculture and agribusiness.

• Manufacturing and industrial development.

• Small and medium-sized enterprises.

• Housing and urban development.

• Healthcare and education.

• Digital infrastructure and financial inclusion.

Module 11: Risk management and responsible finance

• Credit, market, liquidity and operational risk.

• Political, regulatory and country risk.

• Environmental and social risks.

• Climate and transition risk.

• Fraud, corruption, money laundering and sanctions compliance.

• Governance and fiduciary controls.

• Portfolio monitoring and early-warning systems.

• Responsible investment and stakeholder engagement.

Module 12: Development impact and evaluation

• Defining development outcomes and outputs.

• Theory of change and results frameworks.

• Additionality and attribution.

• Employment, income, productivity and inclusion indicators.

• Gender, climate and social-impact indicators.

• Monitoring, evaluation and learning.

• Impact measurement alongside financial performance.

• Preparing an impact report for investors or a board.

Module 13: Policy, governance and institutional strategy

• The role of governments in development finance.

• Mandates, shareholder expectations and independence.

• Development-bank governance models.

• Financial sustainability and capital adequacy.

• State support, subsidies and policy-based lending.

• Portfolio concentration and capital allocation.

• Institutional performance measurement.

• Ethics and accountability.

Module 14: Practical capstone project

Participants work in groups to develop a financing proposal for a real or simulated development project. The proposal should include:

• Project rationale and development need.

• Market and stakeholder analysis.

• Technical and implementation plan.

• Financial model and funding requirement.

• Proposed capital structure.

• Risk register and mitigation plan.

• Environmental and social considerations.

• Development-impact indicators.

• Investor or investment-committee presentation.

Who should attend

This course is suitable for:

• Managers and officers working in development finance institutions and development banks.

• Government officials in finance, planning, infrastructure, trade and economic-development departments.

• Commercial-bank professionals involved in corporate lending, project finance or structured finance.

• Investment, private-equity, venture-capital and impact-investment professionals.

• Infrastructure, energy, housing, agriculture and healthcare project developers.

• PPP specialists, transaction advisers and financial consultants.

• Professionals working for donor agencies, international financial institutions and development organisations.

• Regulators and policymakers responsible for financial-sector or investment policy.

• Treasury, risk, credit, compliance and portfolio-management officers.

• Non-governmental and civil-society professionals involved in development programmes.

• Entrepreneurs and executives seeking finance for commercially viable development projects.

• University graduates and early-career professionals pursuing careers in banking, investment or public policy.

Recommended prerequisites

Participants should ideally have:

• Basic knowledge of accounting and financial statements.

• Familiarity with business or project finance.

• An understanding of economics or public policy.

• Basic Excel skills for financial-modelling exercises.