BIO uses its ex-ante development assessment tool to structure and document the development rationale of a given investment, direct or indirect, by indicating how and to what extent the investment is expected to contribute to BIOs Development Goals (BDGs).
To specify the extent, every potential investment is assessed on each development goal in terms of being primary, secondary or not relevant. The tool also evaluates BIO’s financial and non-financial additionality to the project, with a similar scoring methodology.
The BDGs are specified for each investment. For instance, agriculture projects will contribute to food security and rural development; renewable energy projects’ main goals are the access to basic services (i.e. electricity) and the fight against climate change; while investments in microfinance institutions are expected to improve access to financial services (financial inclusion).
All investments need to be “financially additional”, meaning that BIO contributes funding that is unavailable in the client’s local market nor offered by international commercial banks. For non-financial additionality, BIO aims at adding value to a project by offering services other than financing; by, for example, contributing expertise through a seat on a client’s Board Committee, improving the E&S management system or helping develop product lines to reach poorer clients. Some of these non-financial services can be co-funded by BIO’s MSME Support Fund.
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