Business: Reformed CDC to help poorest countries
The UK's Development Finance Institution, CDC, marks a bold phase with it's new strategy, placing it back at the centre of Britain's efforts to help the poorest countries pull themselves out of poverty.
**The UK’s Development Finance Institution, CDC, marks a bold phase with its new strategy, placing it back at the centre of Britain’s efforts to help the poorest countries pull themselves out of poverty. **
Following a comprehensive review of CDC by the Department for International Development, which included a public consultation, CDC will direct its capital to where it is needed most and measure its success in reducing poverty, not simply generating profits.
For the first time, CDC will have explicit targets for development impact as well as a minimum rate of return.
Launching the new strategy in London, International Development Minister Alan Duncan said:
Today marks the start of a bright future for CDC. Our reforms have allowed it to regain its spirit and motivation, creating a world-beating development agency which tackles the root causes of poverty.
The new CDC will bring together business know-how and financial expertise to create new markets, new jobs and new opportunities for millions of the poorest.
Previously focused on investing through third party private equity funds, CDC will now be able to employ a full range of financial instruments to ensure that it is able to direct its capital to where it is needed most.
The UK Government’s own review of CDC recommended that CDC’s investments should focus more on the poorest regions, become more transparent, and prioritise reducing poverty and not just financial returns.
Launch of new strategy
Launched by CDC’s Chief Executive Diana Noble and International Development Minister Alan Duncan, the new strategy will:
- Give CDC the power to invest directly in countries and sectors where the development need is greatest. This will benefit the poorer countries in Africa and South Asia. Richer developing countries and regions like China, South East Asia and Latin America will be excluded from new investment commitments.
- Provide CDC with a new range of tools, such as debt, direct investments and guarantees to enable CDC to work more flexibly and creatively.
- Measure CDC’s success in terms of how their investments benefit the poorest, not simply in terms of how profitable they are. Targets will be reviewed annually with DFID.
- Open CDC’s work to independent scrutiny and analysis by publishing more evaluation and investment data on its website.