The MDB-CPRI partnership: A formidable partnership for development finance

Multilateral development banks (MDBs) and insurers are quietly building one of development finance’s most scalable partnerships, as credit and political risk insurance shifts from a specialist tool into a platform for portfolio-level mobilisation.

For years, the drumbeat has been growing louder: the world’s MDBs must mobilise far more private capital to meet staggering global development needs. While solutions like bond issuances and co-lending get attention, credit and political risk insurance (CPRI) is one of the most powerful ways to mobilise private capital on a large-scale.

A partnership built for scale  

Insurers are ideal partners owing to their focus on diversification of assets, which MDBs offer easily, and their ability to match MDBs’ often unique structuring elements.  This is important as MDBs try to leverage more private capital to support their development agenda.

MDBs have been using CPRI for trade and long-term business for several years, directly and through brokers. What began as discrete risk-sharing experiments on single transactions has evolved into a profound, market-shaping force. The consistent, high-quality demand from MDBs hasn’t just absorbed existing insurance capacity; it has actively expanded the entire frontier of what the private market is willing to underwrite.  

Encouraged by the strong performance of MDB portfolios and a shared commitment to sustainable outcomes, insurers have stretched their own appetites. They now confidently offer longer tenors – in some cases up to 25 years for infrastructure projects – and venture into countries and sectors once considered too challenging. This has been a virtuous cycle: good for development and good for business, attracting more players and growing overall market capacity. 

The evolution towards portfolio-level mobilisation

The real breakthrough, however, came from moving beyond one-off deals to platform-level systems. The shift from transactional to programmatic approaches was a gamechanger. 

In 2017, IFC pioneered the world's first tracker-fund style, blind pool programmatic approach to procuring insurance on assets meeting pre-agreed eligibility criteria. It began with two insurers for USD 1 billion under the Managed Co-Lending Portfolio Program (MCPP) for Financial Institutions and within eight years replicated and scaled the structure four more times to cover both financial institutions and real sector assets, bringing the total to USD 15.5 billion from 19 participating credit insurers. This is only expected to grow further. Collectively, unfunded MCPP and standalone credit insurance has allowed IFC to significantly increase how much it is able to lend to its emerging market borrowers. In FY25, IFC procured close to USD 4 billion of insurance coverage on long-term assets between the MCPP and facultative approach.

Other MDBs, including ADB, EBRD, and DFC, have launched similar insurance-backed partnerships, showing how well-designed solutions and the right partnerships can scale efficiently at the portfolio level.

This growth is notable considering that insurers are taking risks on emerging market assets – typically considered risky by financiers and investors from developed countries. Their willingness to insure such assets through various MDBs and DFIs indicates that investments in emerging market assets may not be as risky as commonly believed. 

Insurance and structured finance innovation

The ultimate impact is measured on the ground. This mobilised capital translates into jobs, sustainable infrastructure, and economic empowerment, often in the world’s most challenging contexts. It quietly supports a growing body of evidence that well-structured emerging market investments can defy outdated risk perceptions. Innovation is often at the heart of MDB engagement with credit insurance partners. Insurance companies pride themselves on being able to underwrite risks that may be atypical or too complex for other forms of mobilisation partners to embrace in the initial stages. From insuring Basel III compliant Tier II instruments to covering assets in smaller developing countries, to adopting blind pool portfolio approaches and covering mezzanine tranches in Significant/Synthetic Risk Transfers (SRTs), insurers have embraced it all – often achieving good returns.  

For example, IFC recently created the Emerging Markets Securitization Program (EMSP), a USD 510 million first-of-its-kind global initiative, by securitising a pool of its existing assets through a collateralised loan obligation (CLO) structure. There again, credit insurance played a pivotal role, with four insurance partners wrapping the entire mezzanine tranche for USD 130 million. The structure demonstrates how, with the right partners, new solutions can be created to continue building asset classes for development. Similarly, IDB Invest’s Scaling4Impact benefited from the participation of credit insurance in its mezzanine tranche. 

Bringing proven models into the mainstream 

Yet a pivotal challenge remains. Too much of this powerful innovation lives within the specialised dialogue between MDBs and their insurance partners. To genuinely transform the financing landscape, these proven models must break out and become mainstream tools for commercial banks and local financial institutions. How do we bridge that gap? It requires a conscious shift from fragmented excellence to orchestrated replication. 

We must move our industry dialogues from discussion to accountability. Imagine if our conferences became forums not just for sharing ideas, but for reporting on agreed implemented actions. What if we reconvened with a shared log of progress, tracking how pilot solutions become standard practice? This calls for a culture that champions collective acceleration alongside healthy competition. The balance sheet of a single institution is finite, but our shared intelligence and willingness to replicate success can achieve an exponential impact. 

The foundation is solid, with MDB lending capacity likely to be stronger than ever before based on a new methodology introduced by S&P during the World Bank’s Annual Meetings. As their recent report notes, ‘The Multilateral Lending Institutions’ (MLI) criteria change will lead to meaningful improvements in capital positions and could unlock $600 billion to $800 billion in additional sovereign lending capacity.’[1] All eyes are now on the other major rating agencies to see if they will follow suit. The private CPRI market stands ready with billions more in risk-bearing capacity, grown in partnership and trust. The mechanisms are proven, and the need has never been greater. The combined impact would be profound, far beyond just a drop in the ocean towards development finance. The next chapter in global development won’t be authored by any single entity. It will be co-written by those who choose to partner deeply, share openly, and relentlessly focus on scaling the quiet engines that turn billions into the transformative finance our world needs.