“Unwanted Billions” Presentation Highlights at CFC-ACT Side Event, FfD4 Sevilla Based on the presentation by Igor Zelezetskii
At the CFC-ACT Fund side event during the 4th International Conference on Financing for Development (FfD4) in Seville, Igor Zelezetskii delivered a compelling presentation titled “The Unwanted Billions – How Inaccurate Credit Ratings Obscure Investment Opportunities in Developing Countries.” His session shed light on how flawed credit rating methodologies are locking out billions in private capital from agri-SMEs and climate-resilient infrastructure across the Global South, stifling growth and sustainability.
Key points from the presentation included:
- Massive Investment Losses:
In 2022 alone, Africa forfeited over $400 billion in income, investment, and asset value due to sovereign credit ratings that fail to reflect real economic fundamentals. These misaligned ratings result in inflated borrowing costs, capital flight, and missed opportunities in sectors critical to sustainable development—such as irrigation, agri-processing, and climate adaptation. - The Liquidity Paradox:
Despite vast pools of idle private capital in OECD nations, developing economies face chronic investment shortfalls. This paradox arises from rigid regulatory frameworks and outdated risk perceptions—perpetuated by flawed credit ratings—that divert capital away from where it’s needed most. - Human Consequences:
These “unwanted billions” translate into lost jobs, missed opportunities for women and youth, and persistent poverty in rural areas. The presentation cited Burkina Faso, where a single sovereign ratings downgrade caused the collapse of funding for a national horticulture cold-storage strategy—undermining livelihoods and food security. - The ACT Fund Response:
The ACT Fund, supported by a $20 million first-loss tranche from the CFC, is structured to de-risk private investments, provide data-driven technical assistance, and unlock financing for agri-SMEs that build climate resilience and generate measurable social and environmental impact. - A Clear Call to Action:
Investors, regulators, and development actors were urged to support innovative credit models, pilot risk-weighting reforms, and embrace blended finance tools that turn "unwanted billions" into catalytic capital for people, planet, and portfolios.
As the world grapples with interconnected crises—climate change, food insecurity, and rising inequality—blended finance must transition from a niche instrument to a cornerstone of development finance. The ACT Fund exemplifies a scalable model for redirecting the so-called “unwanted billions” into high-impact investments—strengthening food systems, empowering local economies, and fostering bottom-up resilience.
This session reinforced the CFC’s unwavering mission: to transform a global financial architecture that systematically excludes the communities most in need of sustainable investment. By exposing the biases embedded in credit rating systems and demonstrating the real-world consequences of capital misallocation, the presentation delivered a clear message: reform is not just necessary—it’s a pressing imperative.
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[CFC Media Relations Team]
[Email: managing.director@common-fund.org]
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