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Designing an Israeli Development Financing Platform

On January 8, 2019, in a joint venture with the Prime Minister’s Office, the Milken Innovation Center/Blum Lab for Developing Economies hosted a Financial Innovations Lab to explore the creation of an Israeli development finance institution (DFI). The Lab was attended by 52 professionals from Israel and abroad, from both multilateral and bilateral DFIs, international financial investors, think tanks, investment banks, global banks, and philanthropic foundations.

The Lab discussion centered on the need for, advantages of, and design elements of an independent DFI whose sustainable capital structure and blended financial instruments (equity, debt, and guarantees) can meet the needs of private businesses involved in key development sectors, and draw private capital into Israeli-sponsored project partnerships. This report addresses the general need for development finance, the range of financial instruments used in various markets, some existing DFIs, and examples of successful DFIs to illustrate how they are organized, governed, funded, and managed.