With official development assistance under increasing strain and investment needs continuing to grow, the role of private capital in development is becoming ever more central. But while mobilisation volumes have risen, questions remain about whether this capital is reaching the places where it is most needed—and whether it is delivering meaningful development outcomes.

In a recent episode of ODI Global’s Think Change podcast, I joined Sara Pantuliano (ODI Global), Alfonso García Mora (International Finance Corporation) and Nazmeera Moola (Ninety One) to explore what is really driving private investment in emerging markets—and what it takes to translate mobilisation into impact.

The conversation focused on three core questions.

First, what are investors actually looking for?
Institutional investors continue to face real and perceived risks in emerging markets, including currency volatility, regulatory uncertainty and limited pipelines of bankable projects. As a result, capital tends to flow to lower-risk environments, often bypassing the most vulnerable countries.

Second, how are development finance institutions evolving?
Institutions such as the IFC are under growing pressure to mobilise private capital at scale. This has led to innovations in blended finance, guarantees and co-investment platforms—but also raises questions about how success is defined and measured.

Third, what determines whether private finance delivers development outcomes?
A key takeaway from the discussion is that the effectiveness of private finance depends less on the volume mobilised, and more on how transactions are structured. Risk allocation, pricing, incentives and governance all shape whether investments are additional, whether they crowd in further capital, and whether they generate tangible development and climate outcomes.

This points to a broader shift that is needed in the field: from a focus on mobilisation as an end in itself, to a more rigorous understanding of what works, where, and why. As highlighted in the Centre for Private Finance in Development’s emerging research agenda, the central challenge is not simply to unlock capital—but to ensure that it is aligned with development priorities and delivers measurable impact .

🎧 Listen to the full episode on the ODI homepage here