Global initiative backed by partners across public, private, philanthropic sectors well-positioned to unlock billions of dollars for global development
15 July 2015 -- ADDIS ABABA, ETHIOPIA
A new global initiative called Convergence is announced today, which has the backing of a range of public, private, and philanthropic actors and the potential to unlock billions of dollars for global development. Convergence will be the world’s first platform blending private, public, and philanthropic capital for the greater good.
An independent organization based in Toronto, Convergence will help connect private investors and public and philanthropic investors for “blended finance” opportunities in emerging and frontier markets. It will magnify the impact of public and philanthropic investors’ development dollars by attracting private capital towards investments that deliver social, economic, and environmental impact, and in turn reduce risk and enhance returns of emerging and frontier market investments for private investors.
Convergence is being designed and launched by a core group of partners including Canada’s Department of Foreign Affairs, Trade and Development (DFATD), the World Economic Forum, Dalberg Global Development Advisors, and the Global Development Incubator. Convergence is a component of the Redesigning Development Finance Initiative led by the World Economic Forum and the Organization for Economic Co-operation and Development (OECD). DFATD has committed $18.5 million USD of catalytic funding for Convergence.
Now, a broader group of stakeholders from the public, private, and philanthropic sectors have come forth as early supporters of the platform, which will accelerate the blended finance ecosystem in which they all participate. These Founding Group members include the Bill & Melinda Gates Foundation, Black Rhino, the Government of Ethiopia, the Government of the Netherlands, the Government of Senegal, Mara Group, MasterCard, and The Rockefeller Foundation.
The Honourable Christian Paradis, Canada’s Minister of International Development and Minister for La Francophonie, formally announced Convergence’s forthcoming January 2016 launch at the Third International Conference on Financing for Development, where the international community meets this week to discuss how to finance the UN’s Sustainable Development Goals (SDGs). Minister Paradis commented, “I am proud that Canada has played a lead role in the creation of Convergence with the tremendous support of the other founding members. We know that post-2015, financing the SDGs will be challenging. Innovative initiatives like this will help expand the pool of foreign and domestic capital for projects that accelerate social and economic progress in the developing world.“
President Macky Sall of Senegal reiterated the need for new approaches, commenting, “I remain strongly convinced that the changes in international economic context requires defining new strategies that focus on innovative financing such as Convergence, as a complement to official development assistance.”
By building a deeper pipeline of opportunities and reducing search costs, Convergence will help private investors overcome significant barriers to investment in emerging markets, such as high design costs, lack of knowledge and data, and high search costs due to limited networks. “Convergence has the potential to help public, private and philanthropic investors approach partnerships in an entirely different way,” said Walt Macnee, Vice Chairman of MasterCard. “Tapping into private sector expertise to direct, target, and multiply development dollars will yield results that are mutually beneficial and ultimately amplify development outcomes.” The platform will also support public and philanthropic investors, who are under increased pressure to maximize the efficacy of their investments and are looking for new sources of capital and more flexible ways to deploy that capital.
For more information, please contact: Convergence Media Office [email protected]