Policy Updates

On November 14, 2024, USAID announced a series of investments totaling US$54 million with the private sector to mobilize climate finance at COP29.

Building on previous successes which mobilized US$30 billion for climate finance to address development since 2021, USAID announced US$9 million for USAID's EDGE Fund, all for different investments in climate funds.

USAID will also invest US$28 million for the Columbia Invest for Climate activity and an additional US$6 million to the Partnership for Green Investments in Southeast Asia.

On November 11, 2024, Japan and the US released it's strategy to enable the ADB to increase climate-related lending by up to US$7.2 billion over the next five years.

Japan has committed a sovereign guarantee of US$600 million, while the US provides US$1 billion, marking the first-ever use of sovereign guarantees specifically for climate finance. These guarantees will allow the ADB to lend more for climate initiatives without requiring new capital from member countries, setting a precedent for other development banks to follow.

This initiative supports the ADB’s long-term goal of providing US$100 billion in climate finance by 2030. Projects benefiting from this expanded lending include a sustainable aviation fuel program in Pakistan, partially funded by US$45 million from the ADB under this scheme. The guarantees will extend for 25 years, providing stability for long-term climate investments while addressing pressing environmental challenges in affected nations.

Japan’s leadership in this effort aligns with its broader commitment to addressing global climate issues. The ADB is sharing its model with other MDBs, including the WB and EIB, to enhance climate-related financing mechanisms. This approach responds to the estimated need for over US$2 trillion annually by 2030 to enable LMICs to transition to clean energy and adapt to a changing climate.

On November 6, 2024, the results of the 2024 US Presidential Election were announced with former US President Donald Trump (Republican) as the winner, leaving many development experts to speculate on how the upcoming Trump administration will impact US development policies and funding.

From his previous term in 2016-2020, Trump was not supportive of the multilateral system, including the UN. Many of his previous decisions were reversed by the Biden administration, such as budget cuts to USAID, and will likely be reinstated upon his return to office.

Trump's presidency could impact Global Health in particular by once again withdrawing from the WHO, reinstating the Global Gag, and cutting funding for UNFPA. Climate funding, an already a contentious issue on Capitol Hill, faces an uncertain future.

Localization is one of the areas where there may be bipartisan agreement. Faith-based organizations and private sector partners working with the DFC are also groups that may find favor in the next administration.

On October 31, 2024, a joint event by the CGD and the MFAN saw US development experts recommend priorities and policies for the next US administration. The discussion was framed by a set of detailed recommendations released by MFAN.

The document, Building on a Legacy of Progress: Opportunities to Reform U.S. Foreign Assistance, covers a range of issues, including improved coordination with other national and global partners, creating a stronger path for country partners to transition to self-reliance, catalyzing innovation and strategic risk taking, and elevating transparency and evidence for better accountability.

The event included remarks by two former USAID Administrators, Mark Green and Gayle Smith, followed by a panel of senior former US government officials who reflected on their own experience, the need for a stronger US development experts to recommend priorities and policies for development approaches that meet the times, and their priorities for the future.

On September 19, 2024, the US pledged an additional US$80 million in funding to Malawi, Tanzania, and Zambia as part of the Feed The Future program which supports agricultural growth and resilient food systems using the Feed the Future Accelerator.

This is in response to the needs created by Russia's invasion of Ukraine as well as the impact of recent droughts and macroeconomic shocks.

The Accelerator will support the growth of a regional breadbasket by combining the region's fertile land, its diverse farming systems, and reform-minded governments. This aims to stimulate economic growth and simultaneously improve the resilience of food producers.

On September 18, 2024, the White House released the US Strategy on Global Development which outlined a whole-of-government approach to build on the 75 years of US investments in global development.

The strategy has five main objectives:

• Reducing poverty through inclusive economic growth and quality infrastructure;
• Investing in health, food security, and human capital;
• Decarbonizing economies and increasing climate resilience;
• Promoting democracy, human rights, and governance while also addressing fragility and conflict; and
• Responding to humanitarian assistance needs.

The strategy noted the need to build stronger systems to address the lost development gains from COVID-19 and to accelerate progress toward meeting the SDGs. The strategy highlighted the need to build stronger partnerships while recognizing the leadership role that the US is committed to.

On August 7, 2024, the USAID and the US DFC announced a package of assistance and guarantees intended to help underserved women succeed as entrepreneurs and support climate adaptation and clean energy.

DFC pledge to provide US$42 million in loan guarantees through a local Dominican bank to catalyze up to US$87 million in local currency.

The US pledged a further US$43 million in grant funding to address several issues to build a more resilient and prosperous country, and will specifically address gender equity and equality needs.

On June 27, 2024, USAID announced US$66 million to Zambia, which is designated by the US as a Feed the Future accelerator county, to mitigate worsening drought conditions, strengthen food security efforts, and build local resilience.

Zambia's crop loss has reached between 60-95% due to drought conditions, increasing food prices by 83%. USAID is providing emergency assistance to address the urgent nutritional crisis, as well as help farmers in Zambia strengthen longer-term resilience.

The US and Zambia are working together to help implement the Feed the Future program, including through implementation of the Feed the Future Accelerator effort.

On May 23-25, 2024, the G7 Ministers of Finance met at a summit in Stresa, Italy, where the ministers voiced support for contributions to the IDA, WHO, Gavi, and the Global Fund in the resulting communiqué.

The G7 ministers supported efforts towards a successful 21^st replenishment of the IDA by the end of 2024 through an ambitious policy and financing package. Notably, they did not give a concrete signal that the critical US$100 billion threshold requested by the World Bank will be crossed, nor any indication of the US$120 billion expected by African leaders.

The ministers reaffirmed their dedication to strengthening the governance and finance of the global health architecture and voiced support for refinancing processes of several GHIs, such as Gavi, the Vaccine Alliance, the WHO, and the Global Fund, and expressed support for the Pandemic Fund. The communiqué called on the donor community to coordinate efforts and increase investments in global health in line with their capacities to ensure sustainable funding and maximize the impact of available resources.

Following the summit, the C7 pointed out the G7's lack of ambition and financial commitment to international development, including climate adaptation. International civil society organizations criticized the lack of any reference to allocating SDRs to global solidarity.

On May 23, 2024, as part of the state visit of Kenyan President William Ruto's visit to the US, the US and Kenya announced a number of new programs, commitments, and partnerships covering a wide range of topics including governance, democracy, criminal justice reform, free elections, civil society protections, corruption, and human rights.

DFC announced a new US$250 million financing agreement with Kenya to support the private sector in building renewable energy, digital connectivity, and affordable student housing. In addition, DFC will be opening a DFC regional office in Nairobi, which will serve as a base for increasing private sector development in Kenya and across Africa.

USAID and Kenya announced new partnerships in education and STEM-related fields between US and Kenyan universities to promote high education and post-high school education. Microsoft and Mastercard are also part of the effort to increase science, technology, and math education in Kenya as a way to improve economic growth.