Development finance institution

They are often structured as a company that provides loans for projects that a government or nonprofit wants to encourage for non commercial reasons.

[1] DFIs can play a crucial role in financing private and public sector investments in developing countries, in the form of higher risk loans, equity positions, and guarantees.

[2] DFIs often provide finance to the private sector for investments that promote development and to help companies to invest, especially in countries with various restrictions on the market.

[2] As of November 2020[update], development banks and private finance had not reached the US$100 billion per year investment of climate financing stipulated in the UN climate negotiations for 2020.

[3] However, in the face of the COVID-19 pandemic's economic downturn, 450 development banks pledged to fund a "Green recovery" in developing countries.