Challenges and recommendations for the Development Assistance Committee
Building on the evidence collected through seven country pilots, this Transition Finance
Compendium concludes that more could be done to build the resilience of ODA. The analyses
carried out suggests that official development assistance (ODA) trends should not
be observed in isolation of other sources of financing for sustainable development
since transition finance is about the progressive substitution of external financing
by domestic public resources and private investment mobilised. It finds that further
planning and co-ordination of DAC members’ exit and phasing-out strategies or decisions
could generate ODA efficiency gains and resilience; that the increasing complexity
of the financing for sustainable development (FSD) landscape creates not only opportunities
for access to additional sources of financing, but also risks; and concludes on emerging
recommendations for the DAC to better prepare transition, e.g. good practices/relevant
standards and tools for transition finance. It ends suggesting how the DAC can move
from transition finance diagnostics to implementation.
Throughout their journey towards sustainable development, countries face complex and evolving financing challenges. Donors thus need to constantly adapt their support to the changing financing needs of developing countries. The Transition Finance Toolkit provides them with the methodological guidance, evidence and assessment tools to implement a flexible approach to transition finance in their programmes. The content of the toolkit seeks to foster transparency and facilitate co-ordination among all development stakeholders.