Organisational features and culture determine whether development banks and development finance institutions (DFIs) can deliver mobilisation results. Even with clear strategies, outcomes depend on day-to-day systems – staffing, incentives, capabilities and collaboration – being configured for catalytic finance rather than traditional lending. This chapter examines how legacy metrics, coupled with skills geared to sovereign and senior-debt operations, hold back mobilisation. It reviews reforms that align incentives and responsibilities across departments, embed mobilisation in performance frameworks, and build capabilities in structuring, risk-sharing and investor engagement. The chapter concludes that strengthening the operational backbone – through staff incentives, capacity building and accountability – is essential to make mobilisation a core institutional practice. With supportive shareholder signals, performance systems, and mobilisation capacities, development banks and DFIs can move from ad hoc efforts to systematic crowding-in of private investment.
Mobilising Private Capital for Growth, Resilience and Prosperity
Abstract
Organisational features and culture, including staff allocation and embedded capabilities are decisive in shaping private capital mobilisation outcomes. Even when strategic priorities emphasise mobilisation, results depend on whether day-to-day systems and practices are geared to deliver. Mobilising private capital involves distinct delivery models and forms of engagement, requiring more complex structuring and broader stakeholder collaboration than conventional development finance such as sovereign lending and direct financing. These differences must be reflected in institutional design, staffing and incentives if mobilisation is to become a core function rather than remain a peripheral activity.
Institutions often have not yet translated mobilisation ambitions into organisational practices. Without mechanisms to cascade strategic mobilisation objectives into departmental workplans, team responsibilities and individual performance frameworks, stated targets risk remaining aspirational. Structuring transactions that are complex and resource-intensive, engaging with diverse external partners and deploying a broader set of instruments – such as guarantees, subordinated debt and equity – demands skills that are often underdeveloped or siloed in specialised teams.
Scaling up mobilisation is not merely a strategic or financial shift; it requires a transformation in organisational practices and culture. Technical skills need to be aligned with internal metrics and incentives, fostering a culture that rewards catalytic approaches with aligned risk tolerance, and mobilisation more broadly. Without such alignment, even the most robust institutional strategies are unlikely to translate into tangible mobilisation outcomes.
For key performance indicators (KPIs) to translate into outcomes, they must connect to staff incentives and behaviours at the departmental and individual level. A significant barrier to increased private capital mobilisation efforts lies in the misalignment of incentives. Traditional metrics have translated into operational behaviours that favour capital deployment over private capital mobilisation. As outlined above, capital deployment remains the cornerstone of the business model for most development banks and development finance institutions (DFIs). Financial commitments and disbursements continue to serve as main performance indicators at the institutional, departmental and individual levels. These incentive structures are not only internal choices but also shaped and approved by shareholders, for instance through mandate updates, strategies or corporate scorecard approvals (see also Chapter 1).
High-level metrics typically translate into annual objectives and staff performance frameworks, which shape staff evaluations, promotions and remuneration. For example, the European Bank for Reconstruction and Development (EBRD)’s Annual Bank Investment (ABI) (at least until 2019) and Japan International Cooperation Agency (JICA)’s disbursement volume targets remain the primary measures of institutional success (EBRD Evaluation Department, 2020[1]); (JICA, 2025[2]). Since then, EBRD has established a dedicated debt mobilisation team and is updating its mobilisation approach under its 2026–30 strategy to align with newly adopted mobilisation targets. Similarly, an internal Inter-American Development Bank (IDB) evaluation acknowledged that incentives focus on project approval, disbursement and output delivery rather than on mobilising third-party capital (IDB, 2024[3]). Even where secondary metrics exist, dominant key metrics around disbursements tend to render them marginal in incentive systems. In contrast, France’s Proparco embeds its shareholder-defined 1:1 mobilisation target directly into staff incentives. From 2025, achievement of this target will be linked to the collective performance premium of all employees, signalling a shift toward aligning remuneration and institutional culture with mobilisation outcomes. The Asian Development Bank (ADB) has also sought to realign incentives through its 2023 New Operating Model, which elevated private sector development to a top-line corporate priority. The reform embedded mobilisation metrics into staff performance frameworks, strengthened cross-departmental collaboration, and mainstreamed private sector development plans into country strategies.
Mobilisation efforts in development banks and DFIs often face misaligned incentives, as they do not directly contribute to traditional capital deployment metrics. While internal performance indicators prioritise own-account commitment (or disbursement), which are important for financial planning and balance sheet utilisation, they do not reward the additional effort or outcomes associated with mobilising external private investment. Its complexity relative to direct lending operations, requiring engagement with multiple stakeholders and bespoke risk-sharing arrangements, creates built-in disincentives for staff who prioritise simpler transactions that fulfil internal commitment or disbursement targets.
In practice, direct lending targets are at odds with private capital mobilisation, until or unless counterbalanced with mobilisation targets. This misalignment of objectives and incentives is identified by development finance providers themselves. In a survey of official development finance providers, incentives and institutional capacities were cited as the third most significant constraint to private capital mobilisation, after risk-return considerations and limited investment opportunities (Figure 5.1). Notably, among multilateral development banks (MDBs), internal incentives and expertise were ranked second – equal with risk-return barriers – highlighting the extent to which organisational systems and staff incentives can limit the integration of mobilisation into institutional practices.
Number of survey respondents
Source: Adapted from OECD (2023[4]), Private Finance Mobilised by Official Development Finance Interventions, https://www.oecd.org/dac/2023-private-finance-odfi.pdf.
Internal staff capacity generally focuses on direct lending and, in the case of development banks, sovereign lending, reflecting long-standing priorities. While these skills match the institutional legacy of direct lending, they are less applicable to private capital mobilisation. The extent of misalignment varies across institutions: sovereign-only lenders rarely develop expertise in private structuring or co-investment; MDBs with both sovereign and private operations often concentrate mobilisation know-how in their private-sector arms, which may not be sufficiently integrated with the wider institution; and private-sector-only DFIs have more experience but frequently rely on standardised senior debt rather than more complex mobilisation instruments. Development banks and DFIs that focus on direct lending have limited need to develop advanced financial structuring capabilities. Compared to private capital mobilisation, direct lending tends to involve fewer counterparties, more standardised terms and simpler due diligence and risk assessment procedures. In contrast, mobilisation requires technical capacity to design and execute complex financial structures, including securitisations. Unlike direct lending, securitisation demands specialised skills in asset pooling, risk tranching and marketing to investors. Development banks and DFIs seeking to mobilise capital at scale will need to invest in these capabilities or partner with actors who provide them.
Misalignment of incentives at the institutional level extends into staff performance management. Where staff are assessed based on own account investment or lending volume, there is little operational incentive to pursue mobilisation. EBRD’s internal review found that its reliance on Annual Bank Investment (ABI) targets discouraged the pursuit of co-financing options until internal investment goals were met (EBRD Evaluation Department, 2020[1]). Likewise, the World Bank’s 2020 evaluation observed that its emphasis on direct lending performance often outweighed any incentive to mobilise private capital, especially in the absence of constraints on lending volumes (Independent Evaluation Group, 2020[5]).
Frontline teams and origination units illustrate how weak incentives and mandates divert attention from mobilisation at the earliest stages of project development. These teams, traditionally focused on sovereign clients or direct private lending, are not often mandated or equipped to prioritise mobilisation. As they play an essential role in shaping transactions early on, they risk being biased away from approaches that support private capital mobilisation from their inception. When mobilisation objectives are not embedded into their planning, metrics or staff responsibilities, they risk being overlooked. At EBRD, the loan syndication unit responsible for private mobilisation was not integrated into the deal origination process, limiting its ability to influence pipeline development (EBRD Evaluation Department, 2020[1]). The World Bank noted similar gaps: mobilisation was not included in country-level strategies, scorecards, or memorandums of understanding with regional and sectoral leadership (Independent Evaluation Group, 2020[5]).
Capability constraints remain a major barrier. Mobilising private capital requires advanced financial structuring, familiarity with risk-sharing tools and the ability to engage with commercial investors. These capabilities are often not present in conventional project teams, especially those with a public-sector orientation. Internal evaluations and consultations for this report confirmed that many development banks and DFIs lack dedicated teams and capacity to structure transactions involving guarantees, equity or blended finance instruments more broadly. The World Bank’s 2020 review found that many staff lacked the financial expertise to design catalytic interventions (Independent Evaluation Group, 2020[5]). The IDB Group’s 2022 evaluation similarly found that staff across IDB and IDB Invest had limited understanding of guarantees, defaulting instead to standard loan products (IDB Office of Evaluation and Oversight, 2022[6]).
These gaps are particularly pronounced in institutions with a strong sovereign lending focus. The IDB Group expanded the role of Country Representatives to include private-sector engagement. However, its evaluation covering 2016-2021 found that effectiveness varied widely, in part due to the predominantly public-sector backgrounds of staff in these roles (IDB Invest Office of Evaluation and Oversight, 2023[7]). Similarly, many bilateral and national development banks are subject to civil-service rules and public-sector pay scales, which can make it difficult to recruit and retain staff with private sector or commercial finance experience.
While these challenges are systemic, several institutions have begun to address them through targeted organisational reforms. A notable example is IDB Invest, which incorporated private capital mobilisation into individual performance assessments in 2020 (IDB Office of Evaluation and Oversight, 2024[8]). Staff performance is now evaluated based on own-account investments and on mobilised finance, assigning both equal weight. This helped shift operational focus and was followed by a threefold increase in mobilised volumes.
Other institutions have taken steps to institutionalise mobilisation responsibilities across departments. At IDB Invest, mobilisation targets were rolled out to key origination units, including Corporates, Financial Institutions and Infrastructure (IDB Office of Evaluation and Oversight, 2024[8]). At the Development Bank of Southern Africa (DBSA), mobilisation KPIs were included in the annual scorecard for 2021-2024 period, with explicit ownership assigned to four Group Executives: Coverage, Transacting, Project Preparation and Investment and Debt Division (DBSA, 2021[9]). These examples show how formal accountability can embed mobilisation into mainstream organisational systems.
Several development banks and DFIs are investing in internal capacity. The International Finance Corporation (IFC) has an internal platform for sharing knowledge and experience on mobilisation, and Proparco created a dedicated team for private capital mobilisation attached to the Chief Executive Officer. Finnfund expanded its technical capabilities by hiring blended finance specialists and implementing structured staff training. In the context of a greater focus on mobilisation, DBSA launched a dedicated internal programme to expand advisory and structuring services aimed at catalysing private capital for infrastructure delivery. The Eastern and Southern African Trade and Development Bank (TDB) makes active efforts to recruit professionals with experience in international financial markets and global financial centres.
Despite these positive steps, reforms remain uneven. Many mobilisation activities rely on project champions, donor support or specific departments rather than being embedded in institutional policies and systems. Mobilisation outcomes are bound to remain below expectations for scaling if they are not addressed through operational reforms that make them part of mainstream organisational design, supported by management, resourced appropriately, and linked to institutional planning, performance management and recruitment frameworks. The IDB Group’s 2024-2030 institutional strategy introduced an impact framework to translate priorities into measurable metrics, alongside reforms to HR systems – signalling efforts to embed mobilisation and development impact into organisational culture (IDB Group, 2024[10]).
Strengthening organisational features and culture is essential to translating strategic mobilisation goals into delivery. Incentives tied to traditional capital deployment, limited structuring capacity and organisational cultures continue to hinder private capital mobilisation. For now, incentive systems for individual staff mostly disincentivise mobilisation and crowding-in private capital. Staff profiles need to be complemented with additional capabilities and capacities in financial structuring and mobilisation to ensure broader and deeper expertise across various institutional levels. The scale of change required in organisational systems and staff capabilities is unlikely to come organically from within existing structures and culture.
Addressing these gaps is critical to moving from ad hoc efforts to systematic mobilisation across sectors and regions. Institutions such as IDB Invest and DBSA show that it is possible to realign incentives, clarify accountability and build capabilities. They serve as important examples of how operational systems and institutional culture can be reformed as a lever to rethink development banking, integrating mobilisation in staffing, performance frameworks and internal processes.
References
[9] DBSA (2021), CORPORATE PLAN 2021/22 -2023/24, https://www.dbsa.org/sites/default/files/media/documents/2022-02/Corporate%20Plan%202021-22%20to%2023-24.pdf.
[1] EBRD Evaluation Department (2020), EBRD Mobilisation of Private Finance, European Bank for Reconstruction and Development (EBRD).
[3] IDB (2024), Evaluation of the Development Effectiveness Framework, Inter-American Development Bank (IDB), https://publications.iadb.org/en/evaluation-development-effectiveness-framework.
[10] IDB Group (2024), IDBStrategy+: Transforming for greater impact and scale, IDB Group, https://www.iadb.org/en/who-we-are/institutional-strategy?_gl=1*kh858f*_ga*NTE2NDQzOTAzLjE3NTMzODUwODc.*_ga_T7MXBVEPG7*czE3NTY1MDQxNTQkbzEzJGcwJHQxNzU2NTA0MTU0JGo2MCRsMCRoMA..
[7] IDB Invest Office of Evaluation and Oversight (2023), Corporate Evaluation of IDB Invest.
[8] IDB Office of Evaluation and Oversight (2024), Stocktaking of Private Finance Mobilization at the IDB Group, Inter-American Development Bank (IDB).
[6] IDB Office of Evaluation and Oversight (2022), Corporate Evaluation Evaluation of Guarantee Instruments at the IDB Group, Inter-American Development Bank (IDB).
[5] Independent Evaluation Group (2020), World Bank Group Approaches to Mobilize Private Capital for Development, World Bank.
[2] JICA (2025), JICA REPORT 2024, https://www.jica.go.jp/english/about/disc/report/2024/.
[4] OECD (2023), “Private finance mobilised by official development finance interventions”, OECD Development Perspectives, No. 29, OECD Publishing, Paris, https://doi.org/10.1787/c5fb4a6c-en.