National Development Banks and development finance are increasing their role in channelling Official Development Aid in the Global South. The report is the outcome of a year-long research on the Belgian Investment Company for Development Countries (BIO), its governance structure, its relationship with Belgian and non-Belgian stakeholders, its investments (in agri-food and energy transition) and the processes behind accountability. 

The authors of the report are

The study evaluates the Belgian Investment Company for Developing Countries (BIO) in the context of sustainable and human rights-based pathways for international development.  The authors examine BIO’s legal framework in conjunction to its business model, environmental and social (E&S) policies, accountability, as well as its investment portfolio in agri-food and energy/climate change. As the first in-depth analysis of this kind on BIO, the research relies on data shared on its portfolio and internal policies, as well as interviews with BIO and its stakeholders in Belgium and the Global South.

BIO generates benefits, development impact and E&S awareness across a wide variety of countries and sectors. However, the linkages between its governance, business model and legal framework come with challenges, such as the unsolved tensions between different development objectives and its revenue-making model, the difficulty in ensuring positive impacts and control from its indirect finance and investments, and the struggle to offer a transparent model of internal and external accountability.

Some of these tensions and challenges could be addressed through more principled E&S policies, adopting a human rights-based approach, enhanced transparency, and better coordination between BIO and other development actors. However, many of the challenges, such as the limited oversight of indirect investments, requirements on size and return of investments, and a degree of influence on syndicated loans, are more difficult to address. That is because they depend on the international development finance sector as a whole, in which BIO operates. Therefore, reforming BIO to become a better sustainable development actor would require changes in development policy in Belgium, but also a more fundamental rethinking of private sector development as a way of ‘doing development’.

The study was commissioned by the Coalition Against Hunger (Coalition contre la faim), a network of Belgian civil society organisations.