As part of the multilateral development banks’ (MDBs) commitment to the Billions to Trillions agenda and working toward achieving the Sustainable Development Goals, a group of MDBs published a harmonized framework for assessing additionality in their respective private sector operations (Additionality Framework).
The concept of “additionality” captures the clear and simple premise that MDBs should make a contribution beyond what is available in the market and not crowd out the private sector. Additionality is already a central principle for MDBs working in the private sector, and is one of the five common principles that MDBs have endorsed in 2012 to guide their engagement with the private sector to achieve development goals.
While the assessment of additionality is not new to the MDBs, the newly-developed Additionality Framework provides concrete guidance on the application of the additionality principle. The Additionality Framework develops and articulates:
- more detail on the principle of additionality
- common definitions for financial and non-financial additionality
- guidance on a common approach to the governance of additionality
- examples of types of evidence that help demonstrate the presence of additionality
While recognizing the assessment of additionality is context‑specific for each project within the boundaries of each MDB’s mandate, a harmonized approach will allow for a more effective and efficient conversation with shareholders on where and how to intervene to ensure that MDBs’ resources are used in the most catalytic manner possible and that they are directed where they are most needed, ultimately supporting the delivery of the 2030 Agenda for Sustainable Development.
