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.
The mix of financial resources accessible to developing countries varies over time. It depends on several, varying factors such as income levels, eligibility to specific financing instruments or support measures.
The transition finance fact sheets outline the key transition criteria and implications:
Countries’ access to finance can also be influenced by exogenous shocks and specific vulnerabilities, including natural disasters, commodity price shocks or humanitarian crises. For more information, consult the transition finance country studies.
Transition presents both opportunities and challenges for developing countries and partners. As income per capita increases, countries progressively lose access to concessional finance. This enhances the risk of financing gaps in critical sectors such as health or education. With rising income per capita, however, countries may simultaneously increase their capacity to collect domestic resources and attract private investment.
The transition finance toolkit helps development partners and recipients better understand, anticipate and respond to the financing challenges faced by countries at each stage of their development. It also aims to optimise their access to financing in order to reap the full potential of the emerging opportunities.
Your guide to implementing a transition finance approach
Lessons from case studies in various transition contexts