Bridging, not mixing: Enhancing coordination between trade and development finance

As geostrategy reshapes global finance, closer alignment across export credit and development institutions is key to delivering scale, competitiveness, and impact.

The modern global economic landscape is undergoing a significant transformation. Characterised increasingly by a fragmented, multipolar structure, the current era is marked by greater uncertainty, polycrisis, and rising competition for resources and influence. In this high-stakes environment, national governments are adopting more geostrategic approaches to enhance economic resilience and strategic diversification. Central to this shift is a renewed emphasis on trade and investment promotion as tools to safeguard national interests. Specifically, nations are prioritising access to inputs crucial for the supply chains of the future – critical minerals and energy being the most prominent. As a result, export credit agencies (ECAs) are expected to take on enhanced roles; not merely as facilitators of individual transactions, but as key geostrategic actors vital for national security and competitiveness. To maximise impact in emerging and frontier markets, an enhanced approach is needed, which should entail greater efforts to coordinate trade finance with development finance to offer comprehensive ‘packages’ that benefit both the domestic economy and the partner nation.

The strategic necessity of coordination

Traditionally, trade finance (led by ECAs) and development finance (led by DFIs, public development banks, and development agencies) have operated in parallel universes. While ECAs focus on supporting domestic exporters and national competitiveness, DFIs and development agencies prioritise sustainable development and poverty reduction in partner countries.

What we are witnessing is, in effect, a ‘neorealist moment’ in international economic relations: the liberal assumption that trade flows would follow comparative advantage and converge toward shared rules has given way to explicit power competition, the subordination of commerce to statecraft, and the erosion of shared rules. Multipolarisation, the weaponisation of trade through tariffs and export controls, and the imperative of climate-driven capital reallocation are interacting not sequentially but simultaneously; public finance institutions sit at the intersection of all three.

The global financing gap for sustainable infrastructure is widening against this backdrop. Some countries, often operating outside the OECD Arrangement, can offer integrated packages that blend development and export support. A fundamental asymmetry makes this harder for OECD-adherent countries: DFIs can, and often must, provide concessionality, while ECAs cannot without triggering Arrangement disciplines or WTO subsidy rules, making co-financing the same transaction structurally complicated, not merely organisationally inconvenient.

The core principle: Bridge rather than mix

A critical distinction must be maintained in this enhanced coordination: the mandates of the respective institutions must be respected. While coordination is essential, it should not lead to institutional ‘mission creep’ or the dilution of specialised roles. The objective is complementarity, not substitution.

Much of today’s coordination failure is not a lack of goodwill but a structural mismatch: ECAs report to trade ministries and are measured on export volumes; DFIs report to development ministries and are measured on impact ratios. Bridging this requires joint performance metrics, not just joint task forces.

ECAs also help promote and uphold high-quality standards, including sustainability (ESG) and environmental objectives, for example through the Net-Zero Export Credit Agencies Alliance (NZECA). Yet development agencies and DFIs possess the expertise to support partner countries in ways that exceed the mandate of an ECA, such as:

• Infrastructure and reform: supporting the development of public infrastructure and conducive regulatory frameworks.
• Capacity building: investing in skills development, job creation, and institutional strength.
• Market development: facilitating access to domestic and international finance in emerging economies.
• Inclusivity and sustainability: supporting socio-economic, poverty, gender, and environmental objectives.

By coordinating these interventions, trade finance can follow and benefit from an improved investment climate, while development finance can leverage the technology and expertise brought by domestic exporters in an inclusive and sustainable manner.

Structural recommendations for national coordination

Moving from ad-hoc, isolated project cooperation to a more systematic, long-term strategy requires a ‘whole-of-government’ approach. This model integrates government ministries, public financial institutions, development institutions, and often the private sector around shared strategic objectives. There is no ‘one-size-fits-all’ template for national coordination, which must consider domestic settings, institutional history, and culture. Yet experience suggests some useful pointers.

The first step is establishing a central coordination point. Effective coordination can be based on a nucleus, e.g. a dedicated unit or a primary ministry, to steer the process at both the political/strategic and the technical/operational levels. This central point helps identify key strategic interests and ensures that interventions are not considered in isolation. A ‘concentric-circle’ approach can be effective, in which a tight nucleus for coordination maintains contact with a broader range of stakeholders, including private-sector actors and financial institutions.

Several nations have already pioneered these coordinated approaches. For instance, the collaboration between the Japan Bank for International Cooperation (JBIC), Nippon Export and Investment Insurance (NEXI), and the Japan International Cooperation Agency (JICA) can provide a unified financial offering of concessional loans, insurance, and development finance. Similarly, the ‘Team National’ approach adopted by the European Union’s Member States under the Global Gateway involves structured partnerships between the public sector (ministries, ECAs, DFIs) and the private sector (corporates and commercial banks). In this model, national institutions act as a ‘front office’ to identify and submit viable, sustainable projects to the Global Gateway Investment Hub, building relationships with partner countries and connecting national economic interests to global development goals.

To fill financing gaps, governments should develop more targeted financing mechanisms. This could include:

• Project-specific guarantees: providing de-risking instruments that enable ECAs to operate in higher-risk contexts or complex geostrategic projects.
• Technical assistance: funding due diligence and project preparation to reduce transaction costs and improve project bankability.
• Blended finance: combining grants, loans, and insurance or guarantees to create a comprehensive offer comparable to those of major global competitors.

Coordination is most effective when embedded in a project’s operational lifecycle. This requires breaking down institutional silos through joint project development, where ECAs, DFIs, and private actors collaborate from the outset of project identification; shared due diligence, integrating ESG assessments to increase efficiency and transparency; and shared data platforms to track project pipelines and lessons learned. Sequential co-financing has already proven its value in renewable energy projects in Sub-Saharan Africa and beyond, where DFI pathfinding capital brings a project to bankability, enabling ECA participation at scale.

The OECD, the Berne Union, and G7 coordination mechanisms on critical minerals and clean energy are natural homes for shared case libraries, harmonised due diligence standards, and ultimately clearer guidance on how concessional DFI tranches can coexist with Arrangement-compliant ECA support in the same transaction. National coordination should feed into, and benefit from, these broader multilateral frameworks rather than developing in isolation.

Finally, to move from ‘start-up to scale-up’ in this new era of coordination, governments should focus on three final pillars: pipeline creation, equipping diplomatic missions and embassies with business development capacity to identify and prepare project pipelines in partner countries; strategic communication, developing clear messaging to share best practices and build momentum around flagship projects; and smart metrics, with simple, transparent measurement systems that track the volume of coordinated financing and its impact on national competitiveness and the Sustainable Development Goals.

Fostering mutually beneficial partnerships for strategic interests

A geostrategic approach must not be purely extractive or self-serving. For partnerships to be sustainable and resilient, they must be explicitly win-win. This means working with partner countries to ensure that projects align with their own national planning priorities and development objectives.

Successful coordination should prioritise the creation of local added value, skills, and jobs. Facilitating ‘local content financing’ allows domestic exporters to work alongside local companies, improving local capacity while creating stable markets for the future. By addressing the developmental needs of emerging economies, nations build goodwill that facilitates deeper engagement and longer-term trade and investment opportunities.

The challenges of a multipolar world require a more sophisticated integration of national tools. By bridging trade and development finance through a whole-of-government approach, nations can secure their strategic interests while fostering genuine, mutual prosperity with their global partners. For ECAs, this means engaging earlier in project development cycles, building DFI literacy within their teams, and advocating within the OECD Arrangement for greater clarity on blended structures – not waiting for policy frameworks to arrive, but helping to shape them.