Development Finance
Institution

Spurring additional capital to advance the UN Sustainable
Development Goals

What we do

The J.P. Morgan Development Finance Institution (JPM DFI) was established in January 2020 to mobilize finance in support of the UN Sustainable Development Goals (SDGs) in emerging economies. The JPM DFI seeks to expand J.P. Morgan’s sustainable development-oriented financing activities by i) applying its impact methodology to assess the anticipated impact of transactions; ii) originating and structuring sustainable development finance transactions; and iii) identifying sources of capital interested in financing opportunities with measurable development impact. By supporting the origination and distribution of financial products to institutional investors, acting as investors or lenders, who are interested in financing sustainable development, the JPM DFI aims to build sustainable development as a traded asset class.

Annual reports

What we offer

The JPM DFI applies its impact methodology to assess transactions with public and private sector clients and official development institutions (ODIs) that may promote economic and social/sustainable development in countries eligible to borrow from the World Bank. In particular, the JPM DFI offering includes:

Impact
assessment

Using the JPM DFI methodology to assess the anticipated development impact of transactions and assist clients in communicating the expected contributions of their transactions towards advancing the UN SDGs.

Structuring

Creating scalable financing structures with the goal of catalyzing investment from both private and public sector investors.

Distribution

Identifying sources of capital that seek investments with both financial returns and sustainable development impact.

Our clients

Corporates and
sovereigns

As Development Finance Structuring Agent (DFSA), we assist corporate and sovereign clients in preparing disclosures of the anticipated development impact of their intended projects or activities in emerging markets. We provide a development impact assessment, a report that applies our methodology to the transaction, produces an intensity score, and provides a framework for reporting on the impact of the transaction over its time.

Investors

The JPM DFI assists investors to identify investment opportunities in transactions with anticipated contributions to the UN SDGs.

Official
Development
Institutions
(ODIs)

The JPM DFI collaborates with ODIs (such as national and multilateral development banks) on transactions with sustainable development impact. For example, J.P. Morgan may serve as a bond underwriter for the ODIs and may work with DFIs that act as an anchor investor in a transaction.

Insights

| 00:04:21

Unpacked: Development Finance

Learn how development finance plays an important role in funding sustainable projects, like clean water, in emerging markets, and why there’s a push for private institutions to play a more active role in having an impact.

Video Play Button
Group Created with Sketch.

| 00:04:21

Unpacked: Development Finance

Learn how development finance plays an important role in funding sustainable projects, like clean water, in emerging markets, and why there’s a push for private institutions to play a more active role in having an impact.

AUDIO DESCRIPTION

Affordable and clean energy, widespread access to healthcare and education, quality jobs and infrastructure, safe and sustainable cities. These are pretty ambitious goals for developing countries, so how can we get there? By raising about an extra 2.5 trillion dollars of annual financing until the year 2030.

This is: Development Finance Unpacked

Back in 1944, the concept of development finance was born. Institutions like the World Bank were created to fund the rebuilding of vital infrastructure and services across efforts of war-torn European countries.

Since then, development finance has evolved into what it is today: Funding projects that improve the quality of life and well-being of people in developing countries.

In September 2000, a critical milestone took place when all United Nations members agreed on a set of development goals to achieve by 2015 called the “Millennium Development Goals.”

The idea? To rally world leaders around efforts to fight extreme poverty, expand access to quality jobs and healthcare, and more.

As 2015 approached, the United Nations formed 17 new Sustainable Development Goals to be achieved by 2030. They aimed to advance progress on things like: clean water, infrastructure, education, sustainable farming, improved mobility, and more.

Sustainability is the connecting force between them, emphasizing the necessary balance between economic growth, social inclusion, and environmental protection.

The estimated total investment needed to achieve the SDGs in emerging economies ranges between 3.3 to 4.5 trillion dollars per year.

Currently, we’re only half way there. According to the United Nations, there is a 2.5 trillion dollar gap of development finance – per year – until 2030.

Historically, the development financing has primarily come from public institutions, which are owned and operated by government shareholders.

It can also come from multilateral institutions, like the World Bank. They receive funding from multiple member governments and use it across projects in developing countries. Currently, around one hundred and forty countries are eligible to borrow from the World Bank.

However, this annual funding gap can’t be closed by public institutions alone. To do it the private sector – think multinational corporations or financial institutions – must play a leading role.

Private organizations can offer more capital, access to investors, structuring expertise and a global network.

It could be a direct investment like opening a factory, or a portfolio investment, like an asset manager buying a bond from a government to provide clean water.

Let’s look at an example of how development finance works. Let’s say a government agency in Saharan Africa, to build new infrastructure to provide clean water. While this may intuitively feel “developmental”, a development finance institution will thoroughly evaluate whether this qualifies as a development finance opportunity.

Certain questions could include: Will the infrastructure serve areas that struggle to access clean water? Will it be resilient to climate change? Does the agency provide quality jobs and training to employees?

If a project meets the necessary requirements, the development finance institution will connect this opportunity with potential investors – usually those interested in supporting development finance activities, like an impact investor or an ESG investment fund manager.

From there, projects that support the SDGs and have impact in developing countries, receive their needed funding and we move one step closer to closing that 2.5 trillion annual dollar gap.

Impact Disclosure Taskforce: Advancing the UN SDGs
How Can Sustainable Finance Make a Global Impact?
JPM DFI: Catalyzing sustainable developments
Mobilizing private capital toward sustainable development

Deals and
transactions

Learn about the deals the DFI team has led and the impact they are having in advancing and supporting emerging markets.

Improving connectivity across Africa

J.P. Morgan acted as joint global coordinator, joint bookrunner and DFSA for AXIAN Telecom’s debut $420 million five-year bond in February 2022. AXIAN Telecom operates across Africa and is a leading provider of telecommunications, mobile money services and digital infrastructure. The transaction is expected to bolster the company’s operations in Tanzania, Togo and Uganda and to improve telecom connectivity in Africa.


Supporting trade expansion in Latin America

In February 2022, J.P. Morgan acted as mandated lead arranger, sole structuring agent and DFSA for Yilport Holding’s $127 million ECA-covered loan for the expansion and modernization of the Puerto Bolívar Port terminal in Ecuador. Upon completion, the port is expected to become the largest container terminal on the Pacific Coast of Latin America, enabling the country to increase and diversify its exports.


Funding a large-scale infrastructure project in Brazil

In August 2022, J.P. Morgan acted as the guarantee issuer and DFSA for Acciona's syndicated letter of credit to fund the construction of São Paulo Metro Line 6, the largest public-private infrastructure project (in terms of funding) in Latin America. Upon completion, the São Paulo Metro Line 6 is anticipated to have a capacity of over 600,000 passengers a day, which will improve mobility for the 260,000 inhabitants of Brasilândia, a low-income neighborhood. The Brazilian Development Bank provided 6.9 billion BRL ($1.3 billion) with J.P. Morgan guaranteeing 283 million BRL ($54 million).


Helping LATAM Airlines rebuild

J.P. Morgan acted as lead left bookrunner and DFSA for LATAM Airlines' $1.15 billion dual-tranche bond offering and joint lead arranger, joint bookrunner and DFSA for the company's $1.1 billion Term B loan in October 2022. The financing supports LATAM Airlines in emerging from Chapter 11 bankruptcy and is anticipated to help improve its route network and climate change mitigation efforts.


Financing solar projects in India

J.P. Morgan issued a green standby letter of credit of 1.05 billion Indian Rupees ($13.2 million) and acted as DFSA for ReNew's power purchase agreement (PPA) with Amazon in October 2022. ReNew is constructing a 210-megawatt solar power project in India under a long-term PPA with Amazon's energy trading entity. The project supports Amazon's global objective of powering its operations with 100% renewable energy by 2025.


Contacts

Arsalan Mahtafar
Arsalan Mahtafar
Executive Director
Head of the JPM DFI
+1 (212) 270 8088
Full bio
Allie Barry
Allie Barry
Vice President
+1 (212) 622 3185
Full bio
Mia Lu
Mia Lu
Associate
+1 (212) 622 3104
Full bio
Stephanie de Lesseps
Stephanie de Lesseps
Analyst
+1 (212) 464 0173
Full bio
Daniel Rocha Correa
Daniel Rocha Correa
Analyst
+1 (646) 824 8668
Full bio
Jiten Wignarajah
Jiten Wignarajah
Executive Director, Development and Multilateral Institutions Coverage
Development and Multilateral Institutions
+44 (207) 134 7675
Full bio
Daniel Zelikow
Daniel Zelikow
Vice Chair
Chair of the JPM DFI Governing Board
+1 (212) 585 3758
Full bio

Frequently asked
questions

The JPM DFI augments JPM’s existing emerging markets client offering by addressing the growing demand from institutional investors for transactions with credible impact disclosure and reporting. By applying the JPM DFI impact methodology, we help our emerging markets clients assess the anticipated development impact of their transaction and communicate that impact in a standard format to the investor community. Through increased investor engagement, we hope to create a “virtuous cycle”, whereby more emerging markets issuers recognise the benefit of setting clear sustainable development targets which can be measured and tracked. This improved disclosure from emerging markets clients should further support investor confidence and capital flows into sustainable development assets in emerging markets.

The JPM DFI does not have its own balance sheet capacity. The JPM DFI provides its services in conjunction with J.P. Morgan’s Corporate & Investment Banking (CIB) products. The CIB, among other things, originates and structures financial instruments for distribution/syndication to the ultimate institutional investors to such assets. The JPM DFI helps emerging markets corporates and sovereigns assess the anticipated development impact of their financing needs and identify institutional investors seeking to provide capital or risk mitigation products to projects and transactions with sustainable development impact. In doing so, the JPM DFI seeks to scale up the CIB’s origination of such transactions and accelerate the mobilization of capital to these investment opportunities.

In recent years, we have seen a growing interest in ESG and impact investing from all market participants. As the ESG wave grows, we have observed meaningful changes in behavior and increased interest in ESG products from investors (ESG-aligned funds), corporates (focus on ESG frameworks and targets) and commercial banks (public commitments). J.P. Morgan has also advanced its ESG strategy by forming new teams focused on climate change and sustainable development, and by announcing a $2.5 trillion target by 2030 to finance and facilitate transactions that address climate change and contribute to sustainable development. In 2021, transactions assessed by the JPM DFI accounted for the largest contribution to this target.

The UN Sustainable Development Goals (SDGs) are at the heart of the 2030 Agenda for Sustainable Development, adopted by all United Nations Member States in 2015. The SDGs are 17 interconnected global goals and 169 unique targets aimed at ending poverty, improving health and education, reducing inequality, and spurring economic growth – all while tackling climate change and working to preserve our natural ecosystems. While some of the goals (e.g., SDG 7 Affordable and Clean Energy and SDG 13 Climate Action) are directly aimed at mitigating the adverse impacts of climate change, a focus on economic, social, and environmental sustainability is a common feature underlying all of the SDGs.

This material (including market commentary, market data, observations or the like) has been prepared by personnel in the Development Finance Institution at JPMorgan Chase & Co. It is not the product of any Research Department at J.P. Morgan (“JPM Research”) and has not been reviewed, endorsed or otherwise approved by J.P. Morgan Research. Any views or opinions expressed herein are solely those of the individual authors and may differ from the views and opinions expressed by other departments or divisions of J.P. Morgan. This material is for the general information of our clients only and it is not intended as an offer or solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction or a recommendation for any investment product or strategy. All transactions (including potential transactions) presented herein are for illustration purposes only.

Information has been obtained from sources believed to be reliable but J.P. Morgan does not warrant its completeness or accuracy. In no event shall J.P. Morgan be liable for any use by any party of, for any decision made or action taken by any party in reliance upon, or for any inaccuracies or errors in, or omissions from, the information contained herein and such information may not be relied upon by you in evaluating the merits of participating in any transaction. J.P. Morgan is not obligated to update any information contained herein or to inform you if any of this information should change in the future. The information contained herein does not constitute a commitment or undertaking by any J.P. Morgan entity to underwrite, subscribe for or place any securities or to extend or arrange credit or to provide any other services to any person or entity. All products and services are subject to applicable laws, regulations, and applicable approvals and notifications. J.P. Morgan is the marketing name for the investment banking activities of JPMorgan Chase Bank, N.A., J.P. Morgan Securities LLC (member, NYSE), J.P. Morgan Securities plc (authorised by the PRA and regulated by the FCA and the PRA) and their investment banking affiliates.

RESTRICTED DISTRIBUTION: This material and statements made herein are proprietary and confidential to J.P. Morgan and are for your personal use only and are not intended to be legally binding. Any distribution, copy, reprints and/or forward to others is strictly prohibited.

© JPMorgan Chase & Co.