The European Investment Bank Global Forum in Luxembourg recently discussed the €300 billion Global Gateway initiative, which aims to mobilise private capital at scale for industrial development. The core of this initiative is the need to mobilise private capital at scale for development finance.
Structuring Development as an Investable Asset Class
According to Dr Hubert Danso, chairman of Africa Investor, the answer lies not in the availability of capital but in the structure of opportunity. The world does not suffer from a shortage of capital, but from a shortage of investable development.
For decades, development finance has focused on making investment developmental. Yet mobilising private capital at scale requires the opposite starting point: making development investable. Today, global institutional investors manage more than $300 trillion in capital, but that capital does not allocate through persuasion or project presentations.
It allocates through mandates, benchmarks, and asset classes capable of absorbing capital at scale. This helps explain a stark reality: across Africa, the development finance system currently mobilises only $0.20–$0.38 of private capital for every development dollar invested.
Closing the Gap in Development Finance
European Council President António Costa noted during the Forum that European instruments have demonstrated the potential to mobilise up to €15 of investment for every €1 of public capital. The gap between $0.20 and €15 is therefore not a capital gap, but rather a gap in the structure of investment opportunities.
For Europe, closing this gap is not only a development priority but a strategic economic opportunity. As the EU seeks to strengthen industrial supply chains, expand energy partnerships, 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.
Institutional capital does not allocate simply because an opportunity appears persuasive. It allocates when opportunities are mandate-eligible, benchmark-compatible, and capable of absorbing capital at scale.
Democratizing Investor Access and Deepening Partnerships
Two priorities become clear: first, democratise investor access to Global Emerging Markets (GEMs) investment risk data, enabling global investors to analyse opportunities using the transparency standards required by institutional portfolios.
Second, deepen partnerships between Global Gateway, the European Investment Bank, the European Commission, the EBRD, and institutional investors to jointly design and scale investable asset classes for development. The cost of not fixing this investment architecture is already visible, with developing countries paying more than $15.6 billion per year in excess financing costs.
Related: Brent Park’s Beauty: Unveiling Engagement Rings in London
Global institutional investors have also missed more than $6 trillion in potential returns over the past two decades because these opportunities were never structured as institutionally investable asset classes. Dr. Danso argued that mobilising private capital at scale requires a shift in mindset, making development investable by aligning opportunities with institutional investors’ mandates.
This requires working with investors not only as providers of capital but as partners in designing and scaling asset classes capable of absorbing capital at scale. When development becomes investable, capital does not need persuasion – it reallocates automatically through mandates, benchmarks, and asset classes capable of absorbing capital at scale.
Historically, capital has mobilised when such architecture exists, as seen in the cases of venture capital ecosystems pioneered by the Yale University Endowment and global infrastructure allocations driven by Canadian pension funds such as CPP Investments.
They can unlock the potential for large-scale private capital mobilisation and drive economic growth in Africa by structuring development as an investable asset class.
Private capital mobilisation is not primarily a development finance problem, but an investment architecture challenge.
Development finance is key.
Dr. Danso and the Africa Investor team are working to make development investable by aligning opportunities with institutional investors’ mandates, similar to the vision of Africa investor’s financial vision.
Ultimately, the Global Gateway initiative can drive economic growth in Africa by mobilising private capital at scale for industrial development.
