LUXEMBOURG, Mar 13 – Mobilising private capital at scale requires a fundamental shift in how development opportunities are structured, according to experts speaking at the European Investment Bank Global Forum.
The discussion, held in Luxembourg, focused on how the European Union’s €300 billion Global Gateway initiative can mobilise significantly more private investment for industrial development, particularly in Africa.
Participants argued that the central challenge is not a shortage of capital but a shortage of investment structures capable of attracting institutional investors.
Hubert Danso, chairman of Africa Investor, said global capital markets are already flush with liquidity, but development opportunities are rarely designed in ways that match the requirements of institutional portfolios.
According to Danso, development finance has traditionally focused on making investments developmental. However, mobilising large-scale private capital requires the opposite approach: making development projects investable.
Global institutional investors collectively manage more than $300 trillion in assets. Yet that capital does not flow based on persuasive presentations or conference discussions. Instead, it allocates according to mandates, benchmarks and asset classes that can absorb investment at scale.
This structural issue was highlighted during the forum, where speakers noted that development finance institutions currently mobilise only about $0.20 to $0.38 of private capital for every development dollar invested in Africa. This is far below the long-standing target of mobilising $10 of private investment for each public dollar.
At the same time, António Costa pointed out that European financial instruments have demonstrated the ability to mobilise as much as €15 of investment for every €1 of public funding.
The disparity suggests that the problem is not the availability of capital but what experts describe as an “investability gap.”
Closing this gap is increasingly seen as a strategic priority for Europe as it seeks to deepen economic ties with African economies, strengthen industrial supply chains and expand energy partnerships.
However, institutional investors require investment opportunities that meet strict standards related to scale, governance, liquidity and transparency.
Historically, large investment ecosystems have developed only after such frameworks were created. For example, venture capital ecosystems were pioneered by the Yale University Endowment, while major infrastructure investment models were driven by pension funds such as CPP Investments. Responsible investment leadership has also been advanced by sovereign wealth funds like Government Pension Fund Global.
In each case, institutional investors played a role not only as providers of capital but as architects of entire asset classes.
Experts at the forum identified two priorities to unlock more capital for development.
The first is improving access to reliable investment risk data for Global Emerging Markets, enabling investors to evaluate opportunities using the transparency standards required by institutional portfolios.
The second is strengthening collaboration between major institutions including the European Investment Bank, the European Commission and the European Bank for Reconstruction and Development to jointly design scalable investment platforms.
The cost of failing to address this structural challenge is already significant. Developing countries collectively pay more than $15.6 billion each year in excess financing costs.
At the same time, institutional investors are estimated to have missed more than $6 trillion in potential returns over the past two decades because many development opportunities were never structured as investable asset classes.
Platforms such as Institutional Investor–Public Partnerships are being explored as potential mechanisms to align public institutions and institutional investors around bankable infrastructure systems capable of absorbing capital at scale.
Ultimately, experts say the challenge of mobilising private capital is not primarily about development finance. It is about investment architecture.
When development opportunities are structured in ways that meet institutional mandates and benchmarks, capital does not require persuasion. It reallocates automatically into asset classes capable of absorbing large-scale investment.
