Development Co-operation Directorate


Transition Finance Compendium

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.

Published on April 16, 2021

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