The OECD methodology for measuring private finance mobilised by official interventions has been developed in partnership with experts from development and international finance institutions (DFIs and IFIs), as well as the climate community through the OECD-led Research Collaborative on Tracking Finance for Climate Action. Since 2017, reporting on mobilised private finance is an integral component of the CRS data collection on development finance (official development assistance, private sector instruments and other official flows). The methodology to measure and report these amounts to the OECD is instrument-specific and was developed according to the following principles:
- Accuracy (avoiding double-counting when aggregating data from multiple providers)
- Fairness (as per attribution, in cases where more than one official provider is involved in a project mobilising private finance).
- Feasibility (pragmatism in terms of data availability)
The objective of this data collection is two-fold: i) to improve data on the volume of resources made available to developing countries (shown from the recipient perspective); and ii) to valorise the use by the official sector of mechanisms with a mobilisation effect (shown from the provider perspective).
More importantly, the methodology for reporting on mobilised private finance to the Development Assistance Committee (DAC) reflects the principles of causality (a key condition to the OECD methodology) - meaning that the private financiers would not have invested in a development activity in the absence of the official sector intervention, and pro-rated attribution. It covers the main leveraging mechanisms identified as being used by providers to mobilise private finance, namely: syndicated loans, guarantees, shares in collective investment vehicles (CIVs), direct investment in companies (DICs) or special purpose vehicles (SPVs), credit lines, project finance, simple co-financing arrangements and, to some extent, technical assistance. See the section below for the definition of each leveraging mechanism.