Grant Awards:

Multilateral Development Banks Challenge Fund

The application period is now closed.

About the Fund

The Multilateral Development Banks Challenge Fund (“the MDB Challenge Fund” or “the Fund”) is a $5.25 million fund that aims to fund innovative solutions and approaches that empower multilateral development banks (MDBs) to provide more financing to developing and emerging economies.

The MDB Challenge Fund’s overall goal is to accelerate MDB financing for the United Nations’ Sustainable Development Goals (SDGs) and the Paris Climate Agreement, in line with the recommendations included in the G20 Independent Review of MDBs’ Capital Adequacy Frameworks report released in July 2022.

The Fund will advance the overall goal through support to work that will enhance or build constructive relationships with MDB management and program teams, generate learnings and insights related to increasing MDB capacity, provide external independent support on technical aspects of the G20 report, and maintain momentum to pursue the G20 report’s agenda. Consultants, organizations, MDBs, academics, and think tanks may submit proposals to the Fund that aim to leverage the findings from the G20 report to benefit the Global South.

The Fund will be supported by a fund manager and technical expert, Maura Cravero, and governed by an advisory board with a representative from each of its three funders—the Bill and Melinda Gates Foundation, the Rockefeller Foundation, and Open Society Foundations. The Fund’s grant recommendations will be made by a technical advisory panel composed of experts and leaders in the financial inclusion sector, in partnership with the fund manager. The Fund is fiscally sponsored by the New Venture Fund (NVF), a 501(c)(3) public charity that incubates and hosts initiatives pursuing bold solutions to societal challenges from a range of angles. 

The application period is now closed. The Fund will announce successful applicants in the coming weeks.

Our Grantees

  • The project aims to increase understanding of what callable capital is and how it can be better integrated into MDB’s capital adequacy frameworks. In doing so, it will generate evidence and analysis to provide guidance for how Recommendation 2 of the Independent Panel report might be implemented; reduce uncertainty on the circumstances and likelihood of a capital call; and contextualize how callable capital fits into the broader framework of capacities, policies, and processes at MDBs.

    “Callable capital is central to the unique financial model of MDBs, but no one is sure what it is worth. In light of the huge development needs around the world and the scarcity of MDB capital, that is no longer acceptable,” said Chris Humphrey, Senior research associate at ODI and senior scientist at ETH Center for Development and Cooperation. “Our project is designed to generate evidence that can help government shareholders, MDB management and credit rating agencies better understand the financial strength and lending capacity of MDBs and take decisions accordingly. Making the best use of callable capital is a key part of modernizing the financial operations of MDBs to face the challenges of the coming decades.”

    Find out more on ODI's website

  • Publish What you Fund aims to create an improved mobilization reporting approach for leading development finance institutions, which will increase understanding around what works to mobilize private investment by proposing improvements to existing mobilization reporting practices. Through a collaborative effort with leading DFIs already working on these issues, it will seek to demonstrate the possible solutions with regards to investment level reporting of mobilization data.

    “The funding from the MDB Challenge Fund enables us to bring together experts and leading DFIs to explore mobilization methods and how they can be measured,” said Gary Forster, CEO of Publish What You Fund. “Improving the measurement of mobilization is vital if we want to learn about what works and how when crowding private capital into development finance deals.”

    Find out more at: https://www.publishwhatyoufund.org/projects/mobilisation-transparency/

  • The Caribbean Development Bank will explore new balance sheet solutions that would enable it to better cushion disaster-related shocks and to provide financing tailored to its members’ needs and challenges. The work on Climate Resilient Debt Instruments has to date predominantly focused on private sector creditors. This project will build the evidence base for consideration of the introduction of climate-contingent loans into MDBs’ activities, accounting for MDB specific features and considering what additional support may be required to enable the implementation of such mechanisms at scale. A holistic balance sheet approach will consider innovation on both sides of the balance sheet, developing a framework replicable by other development banks. Lazard Frères has been retained as financial advisor to CDB to implement this project.

  • In order to further build the MDB asset class and to support capital optimization efforts, IDB Invest will structure its first securitization comprising development related assets originated by the institution. The transaction will allow IDB Invest to increase its lending in the region and support the economic development of its member countries through Paris aligned private sector investments. The project will be designed with an eye toward scaling up the MDB investor base while exploring options for standardization and collaboration between MDBs.

  • The project will produce comprehensive analysis to support MDB’s efforts to develop markets in their own risk transfer mechanisms, creating a set of technical and analytical tools for Balance Sheet Optimization.

  • The project will aim to benchmark capital adequacy across MDBs to increase transparency for their shareholders, boards, and management, while providing metrics of credit standing that are alternatives to agency ratings.

  • The project will explore the potential for local currency solutions for MDB portfolio transfers, combining the objective of freeing up MDB capital with that of deepening domestic capital markets in smaller emerging markets, thus providing institutional investors, such as pension funds, in these markets greater opportunity to diversify and invest in highly rated assets. The proposal will focus on supporting priority longer-term investment needs, such as investments that assuage climate risk, or other priority sectors, such as renewable energy, infrastructure, and urban development, including housing.

    “FSD Africa is pleased to be selected among the beneficiaries of the MDB Challenge Fund. We have been at the forefront of innovation and are keen on supporting new ways of doing business to ensure finance works for Africa’s future. Leveraging on the grant FSD Africa intends to undertake detailed assessment and engagement with MDBs and other key stakeholders to curate an innovative approach to unlock MDB capital in a way that enhances efficiency, maximises impact and supports sustainable economic development in Africa,” said Mark Napier, CEO, FSD Africa.

  • The project will develop a new methodology for assessing concentration risk tailored to MDBs’ portfolio. This aims to provide an alternative to the leading methodology currently in use (e.g. in S&P supranational ratings), which was designed for commercial entities, usually holding much larger portfolios, and can be considered overly conservative when applied to MDBs portfolios that are structurally concentrated but also have other specific features.

    "MDB loan portfolios typically consist of a small number of borrowers and hence are exposed to a significant amount of single name concentration risk. The granularity adjustment method currently applied by some rating agencies can, however, substantially overestimate this risk when applied to such small portfolios. In this project, we will develop a new approach that accurately measures name concentration risk in small and highly concentrated portfolios. A more precise measurement of concentration risk may lead to a significant reduction of capital requirements and hence increased lending capacity for MDBs." said Professor Luetkebohmert-Holtz of the University of Freiburg.

  • The project, developed jointly with the University of Hertfordshire, will be investigating MDBs’ local currency practices, evaluating the scale of the risks and their determinants, and assessing current risk management frameworks, while testing whether the premise that these risks are currently overestimated by limiting the lending capacity of MDBs.

  • The Fund will support both MDBs and non-MDB entities with relevant expertise. For non-MDB applicants, the Fund will prioritize applicants that have the explicit support of an MDB and/or existing relationship(s) with MDBs. Eligible organizations include, but are not limited to:

    • MDBs

    • Consultants or researchers with expertise in MDB capital adequacy management

    • Financial service providers that would like to use innovative financial vehicles to partner with MDBs

    • Academics and think tanks

    Both charitable and non-charitable organizations are eligible to apply for Fund support, though the proposed projects themselves must have a charitable focus. Charitable organizations must have and show proof of 501(c)(3) charitable status or its equivalent. Non-charitable organizations must show proof of tax status and describe the charitable purpose and outcomes of their projects. Please see the Application Requirements section below for more details about both organization types, including a list of accepted charitability documents for US and international entities.

    Joint applications from multiple organizations are welcome; please see the Application Requirements section for more details about required information for joint applications. Additionally, organizations may submit more than one proposal, should they have multiple ideas for relevant projects. Please note that OFAC-sanctioned organizations are not eligible for funding.

  • The Fund welcomes a variety of proposals, all of which should:

    • Promote initiatives to increase MDB lending capacity in line with the G20 report recommendations.

    • Help build public knowledge by generating publicly shareable statistics and/or insights. While grantees are not required to release their work in the public domain, they are expected to share the knowledge gained from their project within the MDB and/or shareholder communities. If there are specific reasons why a grantee cannot share their work within those communities, such circumstances will be reviewed on a case-by-case basis. Please note that non-charitable grantees cannot limit sharing or use of knowledge gained from projects for their private benefit.

    • Leverage the insights from the G20 report to build momentum for reforms and innovations in MDB resource management.

    Projects may focus on areas of work such as:

    • Technical assistance to address potential barriers to leveraging shareholders’ capital contributions and maximizing financing, as determined by MDBs’ capital adequacy frameworks.

    • Operational funding to finance pilot programs or parts of programs to implement the G20 report’s recommendations and/or demonstrate how to implement MDB reforms on a larger scale.

    • New and in-depth analysis to build on the G20 recommendations.

    Sample proposals could include, but are not limited to:

    • Developing evidence or supporting analysis demonstrating how MDBs could adjust capital adequacy frameworks to expand lending in a prudent and sustainable manner or how CRAs could more accurately assess and reflect MDB risk in their methodologies.

    • New and innovative initiatives designed to support environmental sustainability through finance.

    • Designing or testing innovative financial strategies (including securitization proposals, hybrid capital, etc.).

    • Conducting feasibility studies and preparatory work supporting one or more of the G20 report recommendations.

    • Facilitating greater transparency or exchange of information that could meaningfully contribute to more efficient MDB resource management.

    • Providing targeted education and governance support related to MDB capital adequacy.

    Ineligible project types include:

    • Projects that support business-as-usual activities.

    • Advocacy or education activities aimed at the general public.

    • Projects carried out by non-charitable grantees using grant funds to create intellectual property that the grantee will own and possibly use for non-charitable activities (unless certain criteria are met).

    The Fund is not intended to provide capital at risk, and the above examples should focus on leveraging current MDB resources. However, it may consider exceptional proposals.

    In addition to the content guidelines above, eligible projects must meet the following criteria.

    • The Fund will only support initiatives that will not be funded by existing resources—such as internal resources at MDBs or partner institutions—or where the Fund’s involvement would allow for material improvements in project quality or scope. Applicants will be required to explain why their projects must be funded with external philanthropic resources.

    • Proposals must be project-specific; the Fund will not award general operating grants.

    • Project activities and outcomes must set out to benefit the Global South in the long term.

    Preference will be given to:

    • Programs that are planned and ready for execution following receipt of funds.

    • Programs proposed by, in collaboration with, or with support from MDB management or shareholders.

    NVF may engage legal counsel to review proposed activities to ensure charitability requirements are met.

  • The MDB Challenge Fund, with a current size of $5.25 million, anticipates awarding 8–18 grants that each last 12–18 months. The maximum grant award will be $1 million; however, the Fund anticipates issuing most grants with proposed budgets up to $500,000. The Fund will consider a limited number of exceptional projects with proposed budgets above $500,000 and up to $1 million. The Fund reserves the right to modify the total amount requested for final approval.

  • The Fund will evaluate applications based on the following criteria:

    • Technical rigor: The proposal is well scoped and clearly articulated, with a robust technical foundation.

    • Innovation and additionality: The project would allow MDBs to go beyond established practices, either in substance or in ways of working. It is additional to business-as-usual activity and already-planned initiatives.

    • Impact: The project would have a concrete impact on MDBs’ practices and, in turn, on their financing volumes. This can be a direct impact on the operations of one or multiple MDBs, or an indirect impact through research/analysis or initiatives that affect MDBs as a group. This theory of impact should be clearly articulated.

    • Capacity: The applicant has the skills, experience, and resources to deliver the project, as well as the support or relationships with MDBs or their shareholders to make the project likely to have concrete effect.

    • Risk: The proposal identifies key risks and mitigating actions.

    The application review process will begin with the fund manager’s review for eligibility and alignment with the Fund’s goals and priorities. The fund manager will then recommend eligible applications to the technical advisory panel. The technical advisory panel will score applications using a predetermined rubric and will advance applications for the advisory board’s review and evaluation. The advisory board will vote on grant applications and make final recommendations to the NVF board, which will approve final grants.

    Those involved in the review include:

    Fund manager:

    • Maura Cravero

    Technical advisory panel:

    • Arunma Oteh: Scholar and member, Global Leadership Council, Saïd Business School, University of Oxford

    • Betsy Nelson: Member of the supervisory council of Luminor Group; Former Vice President Risk and Compliance and Chief Risk Officer, European Bank for Reconstruction and Development

    • Frank Sperling: Managing partner, TF Consulting LLC

    • Frannie Leautier: Senior partner and CEO, SouthBridge Investment; expert chair, Independent Review of MDB Capital Adequacy Frameworks

    • Hans Peter Lankes: Visiting professor in practice, Grantham Research Institute on Climate Change and the Environment, London School of Economics and Political Science; visiting senior fellow, Overseas Development Institute

    • Jinkang Wu: Senior consultant; former deputy director, Ministry of Finance, People’s Republic of China

    • Nancy Lee: Senior policy fellow, Center for Global Development

    Advisory board:

    • Laura Barbosa de Carvalho, Global Director, Equity, Open Society Foundations

    • Lily Han, Director, Innovative Finance, The Rockefeller Foundation

    • Karen Mathiasen, Senior Program Officer, Development Policy and Advocacy, Bill & Melinda Gates Foundation

  • The Fund has designed its reporting requirements to minimize the burden on grantee recipients as much as possible.

    The Fund will expect ongoing engagement with grantees (e.g., monthly check-ins), and specific modalities will be discussed with successful applicants. At the end of the grant period, each grantee must submit a final narrative report, a final financial report, and a list of all intellectual property and assets purchased or created with the grant. (Please note that, in general, grant-funded intellectual property created by non-charitable organizations must be used solely for charitable purposes in perpetuity, and non-charitable entities are not typically allowed to use grant funds to purchase capital assets.) Grantees will participate in a conversation with the Fund’s advisory board at the close of the grant period to discuss the overall grant process, lessons learned, and findings.

Application Timeline

The Fund, in keeping with its values of transparency and collaboration, has designed an iterative proposal development process that includes opportunities to work directly with the fund manager to brainstorm ideas, pressure-test proposed projects, and complete applications. Interested applicants should complete the following steps:

  1. (Optional) Discuss your program and project ideas with the fund manager before the application deadline by contacting Maura Cravero at maura.cravero@newventurefund.org.

  2. (Optional) Attend a webinar to ask questions related to the application process or receive guidance on the grant portal, Foundant. The Fund will hold two webinars: on December 5 from 10–11 a.m. ET (intended for time zones in Europe and the Americas) and on December 6 from 7–8 a.m. ET (intended for time zones in Asia and Africa)

  3. (Recommended) Fill out and submit a brief Intent to Apply form no later than December 16.

  4. (Required) Submit an application through Foundant by January 27, 2023.

Application Requirements

All applicants are required to submit the materials listed below for their respective organization type. Charitable and non-charitable organizations have the same list of required documents other than proof of charitable/tax status and the narrative for proposed use of funds. Please note that organizations submitting joint applications must provide the organizational and financial information requested for the partner that will receive the funds.

All required forms provided by NVF are available here. Applicants must download these forms to complete them before uploading them to the Foundant application portal. Non-US individuals requiring a W-8BEN-E form should request one by emailing mdbchallenge@newventurefund.org.

Charitable Organizations

Proof of Charitable Status

  • For US-based entities

    • Most recent Form 990F or W-9

  • For entities not based in the US

    • 501(c)(3) Equivalency Determination letter dated within the last two years* 

*Please note that entities that do not have an Equivalency Determination will not be considered charitable entities for the purposes of this RFP and will undergo the same restrictions as non-charitable entities

Grant Proposal Cover Sheet (form provided by NVF)

Proposed Use of Funds (these materials will be collected under the Proposal Narrative and Financial Requirements and Compliance sections of the application)

  • Narrative

  • Proposed budget

Organization Budget

List of Key Organization and Project Staff

  • An overview of the organization’s leadership, staff members, and their roles in your decision-making process. Please provide a list of staff members (including their positions and gender) and brief biographical information for key staff (full CVs are not necessary)

List of Organization Board Members

  • A list of the organization’s board of directors, including the officers, their affiliations, and brief biographical information for each

Current Year Financial Statements

  • A list of your organization’s most relevant committed, pending, and potential funding sources. Please list the main funders of your organization, providing the funder’s contact information (email address or phone number), the total amount received, and the purpose for which the grant was provided.

Audited Financials (most recent)

[If relevant (non-US)] International Applicant Financial Overview Form (form provided by NVF)

Banking Information (form provided by NVF)

  • (non-US) International Wire Form

  • (US-based) NVF EFT Form

Non-Charitable Organizations

Proof of Tax Status*

  • W-9 or W-8BEN-E if non-US entity. You can find instructions for how to fill out the W-8BEN-E here. If you are a non-US individual, please email mdbchallenge@newventurefund.org for a copy of the W-8BEN-E form.

*If proof of tax status is not applicable given the applicant’s organization type, the Fund will accept proof of valid legal existence

Grant Proposal Cover Sheet (form provided by NVF)

Proposed Use of Funds (these materials will be collected under the Proposal Narrative and Financial Requirements and Compliance sections of the application)

  • Narrative**

  • Proposed budget

**Narrative must include an explanation of how the project is charitable, as defined by the US Internal Revenue Service and in accordance with section 501(c)(3) of the US Internal Revenue Code

Organization Budget

List of Key Organization and Project Staff

  • An overview of the organization’s leadership, staff members, and their roles in your decision-making process. Please provide a list of staff members (including their positions and gender) and brief biographical information for key staff (full CVs are not necessary)

List of Organization Board Members

  • A list of the organization’s board of directors, including the officers, their affiliations, and brief biographical information for each

Current Year Financial Statements

  • A list of your organization’s most relevant committed, pending, and potential funding sources. Please list the main funders of your organization, providing the funder’s contact information (email address or phone number), the total amount received, and the purpose for which the grant was provided.

Audited Financials (most recent)

[If relevant (non-US)] International Applicant Financial Overview Form (form provided by NVF)

Banking Information (form provided by NVF)

  • (non-US) International Wire Form

  • (US-based) NVF EFT Form

Contact Us

For general inquiries:

mdbchallenge@newventurefund.org

To preview application ideas with the fund manager or schedule a time to connect:

maura.cravero@newventurefund.org