EU Global Gateway and the €300bn challenge of making development investable
Mobilising private capital at scale requires designing opportunities around institutional investors’ mandates and creating asset classes capable of absorbing capital.
At the European Investment Bank Global Forum in Luxembourg, the €300 billion Global Gateway initiative confronted a defining question for development finance: how can private capital be mobilised at scale for industrial development?
The answer will shape not only the future of development finance, but also the credibility of Europe’s ambition to build deeper economic and industrial partnerships with Africa.
The discussion — reflected in the panel conversation linked below — highlighted a deeper structural issue facing development finance.
For Dr Hubert Danso, chairman of Africa Investor, the answer lies not in the availability of capital but in the structure of opportunity.
The world, he argues, does not suffer from a shortage of capital. It suffers from a shortage of investable development.
Until development is structured as an investable asset class, the world’s largest pools of capital will remain structurally unable to allocate at scale.
For decades, development finance has focused on making investment developmental. Yet mobilising private capital at scale requires the opposite starting point: making development investable.
Today global institutional investors manage more than $300 trillion in capital. But that capital does not allocate through persuasion, conferences or project presentations. It allocates through mandates, benchmarks and asset classes capable of absorbing capital at scale.
This helps explain a stark reality highlighted during the Forum.
Across Africa, the development finance system currently mobilises only $0.20–$0.38 of private capital for every development dollar invested — far below the long-stated $10 mobilisation benchmark.
Yet, as European Council President António Costa noted during the Forum, European instruments have demonstrated the potential to mobilise up to €15 of investment for every €1 of public capital.
The gap between $0.20 and €15 is therefore not a capital gap.
It is an investability gap.
For Europe, closing this gap is not only a development priority but a strategic economic opportunity. As the EU seeks to strengthen industrial supply chains, expand energy partnerships and deepen economic ties with Africa, mobilising institutional capital into large-scale infrastructure and industrial platforms becomes central to the credibility of the Global Gateway strategy.
This distinction matters because global institutional investors are not short of capital. What they lack is a sufficient pipeline of investment structures capable of meeting the scale, liquidity and governance requirements of modern institutional portfolios.
Institutions that mobilise capital in the trillions do not do so by presenting projects. They do so by creating asset classes capable of absorbing capital at scale.
History offers clear examples of how capital mobilises when such architecture exists.
Venture capital ecosystems were pioneered by the Yale University Endowment. Global infrastructure allocations were driven by Canadian pension funds such as CPP Investments. Responsible investment leadership was advanced by sovereign investors such as Norway’s Government Pension Fund Global.
In each case, investors were not merely providers of capital.
They were architects of asset classes.
Institutional capital therefore does not allocate simply because an opportunity appears persuasive. It allocates when opportunities are mandate-eligible, benchmark-compatible and capable of absorbing capital at scale.
Until that threshold is met, institutional capital does not gradually arrive — it simply does not allocate.
Two priorities therefore become clear.
First, democratise investor access to Global Emerging Markets (GEMs) investment risk data, enabling global investors to analyse opportunities using the transparency standards required by institutional portfolios.
Second, deepen partnerships between Global Gateway, the European Investment Bank, the European Commission, the EBRD and institutional investors to jointly design and scale investable asset classes for development.
The cost of not fixing this investment architecture is already visible.
Developing countries have paid more than $15.6 billion per year in excess financing costs. At the same time, global institutional investors have missed more than $6 trillion in potential returns over the past two decades because these opportunities were never structured as institutionally investable asset classes.
Platforms such as Institutional Investor–Public Partnerships (IIPPs) could help align public institutions and institutional investors around bankable infrastructure systems capable of absorbing capital at scale.
As Dr. Danso argued during the Forum:
“Mobilising private capital at scale requires a shift in mindset. The task is not simply to make investment developmental — it is to make development investable. That means aligning opportunities with institutional investors’ mandates and working with them not only as providers of capital, but as partners in designing and scaling asset classes capable of absorbing capital at scale.”
Ultimately, private capital mobilisation is not primarily a development finance problem.
It is an investment architecture challenge.
When development becomes investable, capital does not need persuasion.
It reallocates automatically — through mandates, benchmarks and asset classes capable of absorbing capital at scale.
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