Publish What You Fund has just commenced work on a new DFI Transparency Index, as part of our DFI Transparency Initiative. This comes after almost three years of in depth research into the disclosure policies and practices of some of the world’s leading bilateral and multilateral Development Finance Institutions (DFIs). Our initial research report, along with our DFI Transparency Tool (which forms the basis for the DFI Transparency Index), was publicly launched in November 2021. You can watch the launch here.

The DFI Transparency Index has three broad aims: 1) to assess the transparency of the world’s foremost DFIs, 2) encourage DFIs to carry out their functions in a transparent manner, and 3) to track and encourage progress and facilitate peer learning, while holding DFIs to account. The DFI Transparency Index will look at both the presence and quality of information and consider how the value of different types of information varies according to the needs of data users and what is possible within current DFI systems.

Methodology and selection criteria

We carried out an extensive review of the DFI Transparency Index assessment approach from January to April this year. A summary of the process and changes is available here and the final methodology paper can be downloaded here.

We have completed the selection process for DFIs to be included in our first DFI Transparency Index. Our selection criteria focus on the primary mandates of the institutions, their size, the geographic scope of their work, and their suitability for assessment according to current reporting practices. Owing to the vastly different sizes of multilateral and bilateral DFIs, and their varying mandates, we have developed selection criteria for the two groups of DFIs:

1. Institutions must be involved in the provision of development finance to countries on the Organisation for Economic Co-operation and Development’s Development Assistance Committee (OECD DAC) list of official development assistance (ODA) recipients. Trade finance institutions, including export import banks, are excluded from the assessment.
2. Multilateral DFIs (sovereign and non-sovereign): Institutions must have a total asset size over US $15 billion. For DFIs that operate separate institutions under a group, then total group assets may be considered.                                                                             Bilateral DFIs: Institutions must have a total asset size over US$500 million.
3. Institutions must work internationally.
4. Institutions must demonstrate a fundamental commitment to transparency through the maintenance of a database or list of active investments.

Our selection is guided by data from the Finance in Common Public Development Banks (PDB) Database.[1]

Timeline

The first round of data collection and analysis for the DFI Transparency Index started in the week commencing 9^th May 2022. In July 2022, the first round of scores will be sent to both DFIs and independent reviewers to review. This provides an opportunity for DFIs to understand where they can improve, and to adapt their practises accordingly before we conduct our second round of data collection and analysis in August and September 2022. From October to December 2022 we will start producing our report, which will include a ranking of DFIs according to their performance. This report will be publicly launched in January 2023.

The difference between the DFI Transparency Index and the Aid Transparency Index

The main differences between the DFI Transparency Index and the Aid Transparency Index are the organisations being assessed and the indicators which we are using. While the Aid Transparency Index has, for many years, included a number of DFIs, it also features aid agencies, philanthropic foundations, UN agencies and Ministries of Foreign Affairs. The DFI Transparency Index will only feature multilateral and bilateral DFIs focussing on those making either sovereign and/or non-sovereign investments. Meanwhile the indicators which we will be using are uniquely tailored to respond to the needs of stakeholders who are impacted by DFI investments along with those who work with, partner with and monitor DFIs.

One other difference is the extent to which both indexes measure the quality of publication to the International Aid Transparency Initiative (IATI) Standard.  The Aid Transparency Index is significantly focused on publication in the IATI Standard, as this is accepted as the global standard for aid data. Recognising that there are elements of IATI publication that are not relevant to DFIs, and that there are important aspects of DFI activity that cannot currently be published to the IATI Standard, we have adopted a more nuanced approach to assessing DFI transparency. Where possible, the indicators of the DFI Transparency Index are aligned to the IATI Standard and publication to the Standard is incentivised. However, we include numerous indicators that do not specify publication to the Standard.

Full list of DFIs

The list below outlines the DFIs who will feature in the 2022 DFI Transparency Index process. Please note, we will be assessing the sovereign and non-sovereign portfolios of DFIs separately.

Multilateral DFIs

• African Development Bank (AfDB)
• Asian Development Bank (AsDB)
• Asian Infrastructure Investment Bank (AIIB)
• Development Bank of Latin America (CAF)
• European Bank for Reconstruction and Development (EBRD)
• European Investment Bank (EIB)
• Inter-American Development Bank (IDB)
• IDB Invest
• International Finance Corporation (IFC)
• Islamic Development Bank (IsDB)
• Islamic Corporation for the Development of the Private Sector (ICD)
• World Bank (WB)

Bilateral DFIs

• Austrian Development Bank (OeEB)  [Austria]
• Belgium Investment Company for Developing Countries (BIO)  [Belgium]
• CDC/British International Investment (CDC/BII)  [United Kingdom]
• Finnfund  [Finland]
• German Investment and Development Company (DEG)  [Germany]
• Dutch Entrepreneurial Development Bank (FMO)  [Netherlands]
• The Investment Fund for Developing Countries (IFU)  [Denmark]
• Norwegian Investment Fund for Developing Countries (Norfund)  [Norway]
• Promotion and Participation Company for Economic Cooperation (Proparco)  [France]
• Swedfund International AB (Swedfund)  [Sweden]
• Swiss Investment Fund for Emerging Markets (SIFEM)  [Switzerland]
• US International Development Finance Corporation (DFC)  [United States]

[1] Xu, Jiajun, Régis Marodon, Xinshun Ru, Xiaomeng Ren, and Xinyue Wu. 2021. “What are Public Development Banks and Development Financing Institutions? Qualification Criteria, Stylized Facts and Development Trends.” China Economic Quarterly International, volume 1, issue 4: 271-294.

[2] For DFIs that conduct both sovereign and non-sovereign operations, we will analyse these activities separately.