OVERVIEW
Building systemic public market strategies
This Public Markets Toolkit aims to equip readers with a deeper understanding of the opportunities that public capital markets offer to mobilise local and global capital, optimise MDB and DFI balance sheets, and recycle finite resources.
While acknowledging that public capital markets are not always the right fit for development finance activity, as costs and benefits must be weighed over both the short and long term, the Toolkit seeks to frame and evaluate these considerations in a more systematic and strategic way.
The Toolkit shows that many institutions are already leveraging public market channels in meaningful ways, and their transaction work has created valuable precedents for future action. But for capital acceleration to happen, the development finance system needs to move beyond periodic transactions to systemic public market strategies.
Investment at scale does not automatically happen when individual projects become bankable. It happens when market segments and asset classes emerge that investors can consistently allocate to.
The Toolkit is primarily aimed at development finance professionals within multilateral and bilateral development banks, government ministries, and national development agencies. It can also serve investors, regulators, civil society actors, and public capital markets practitioners.
The Toolkit consists of:
01
A strategic framework to help stakeholders structure their thinking
02
A library of case studies
03
Analysis of the recurring themes across these cases
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Recommendations to create a more coherent and strategic approach to public markets
STRATEGIC FRAMEWORK
Supply, Demand & Liquidity
Public capital market interventions by development finance actors can broadly be grouped into three categories: Supply, Demand and Liquidity. Together, they provide a comprehensive map of the ways public actors can engage with and, in contexts where those markets remain underdeveloped, help build public capital markets.
Many transactions span more than one category. This reflects how capital market interventions in developing markets work. The same transaction structure often has to solve supply and demand problems at once, particularly in thinner markets where neither issuers nor investors can be assumed to show up on their own.
The framework gives development finance actors structure and clarity for decision-making. It is most useful as a diagnostic lens to identify the gaps in a market and the most appropriate tools to address them. It is a way to ask which frictions a given transaction needs to resolve, rather than a strict taxonomy for classifying deals after the fact.
Supply
The institution brings an asset it already finances, such as an equity stake or a loan portfolio, to market as a listed instrument.
Demand
The institution helps another issuer’s IPO or bond succeed, as anchor investor or guarantor, or invests in funds that build demand across the market.
Liquidity
The institution strengthens the market infrastructure, reducing transaction costs and supporting the efficient distribution of new issuances.
CASE STUDIES
A library of concrete cases
The Toolkit contains a collection of 21 case studies, spanning equity and debt capital markets and 4 continents. Mapped to the strategic framework, they offer salient real-life examples from development finance experience.
Each case sets out the tools used and their observable effects. The cases are intended to help development professionals understand key transaction precedents and nuances, extract actionable insights, and build the evidence base for scaling public markets.
demand
CROSS CASE ANALYSIS
Public markets in practice
Individually, each case study is a discrete precedent. Read together, however, they reveal consistent patterns in how development finance actors have used public capital markets in practice. Some of these recurring themes include:
From Episodic Transactions to Systematic Market Segments
The single clearest theme across the case studies is an emerging, if still incomplete, shift from one-off transactions towards repeatable platforms. This shift is a significant undertaking, and the case studies represent early proof points. The objective is the facilitation of repeat transactions structured in ways that are familiar and accessible to institutional investors.
EXAMPLES
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Emerging Market Securitisation Program (EMSP)
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BOAD Titrisation: DOLI-P
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Credit Guarantee & Investment Facility (CGIF)
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InfraCredit
Anchoring Is the Connective Tissue of Demand-Side Interventions
Anchoring happens when a development institution commits to a cornerstone position ahead of or alongside a wider offer. This commitment provides credibility and a price-setting signal that can catalyse broader participation from other investors.
Anchoring is capital-light relative to its catalytic effect. It works because it solves a coordination problem, not just a capital gap: it gives price-taking investors a credible signal about credit quality and momentum, which often matters as much as the capital itself. This is particularly valuable in EMDE contexts where investor bases are thin, and issuers may struggle to generate sufficient momentum to complete a transaction.
EXAMPLES
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Thai Credit Bank
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Emerging Market Securitisation Program (EMSP)
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Credit Guarantee & Investment Facility (CGIF)
Exit Mobilisation Is Where Capital Recycling and Market Building Meet
A recurring pattern is the use of public listings as an exit route for assets that DFIs and MDBs already own, rather than as a financing tool for new assets. An existing equity position, built up over years of direct or private-equity-style investment, is transferred to public market investors via IPO or secondary sale.
Exit mobilisation recycles finite development finance capital. Each exit simultaneously supplies a domestic or regional exchange with a mature, de-risked asset. It is not simply a portfolio management decision by the exiting institution. Exit mobilisation is itself a supply-side market-building intervention.
EXAMPLES
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Umeme
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Rainbow Children's Medicare
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Thai Credit Bank
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InfraCredit
Liquidity and Market Infrastructure Are Structurally Critical
Market infrastructure is often the binding constraint that determines whether a subsequent bond issuance or securitisation can find genuine secondary market depth rather than being placed and held to maturity. These interventions address barriers that would otherwise limit the effectiveness of every supply- and demand-side intervention. A systematic public markets strategy cannot treat liquidity as the last mile.
EXAMPLES
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Frontclear
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Eco Invest
RECOMMENDATIONS
The Way Forward
Based on the strategic framework's mapping and the lessons learned from the body of transaction evidence, the Toolkit proposes the following top-line recommendations:
Many roads should lead to public markets scale
There is no single route. Public market innovation is already happening in different ways across institutions, depending on their organisational structures, capacities, and market contexts. The best way for DFIs and MDBs to create public market strategies is to fully integrate them into their existing operations.
Recurring allocations lead to scale
Investors look for a recurring, standardised supply of investment opportunities. This is what drives scale and a true broadening of the investor universe that invests in EMDEs. The development finance system must shift from periodic public-market transactions to building market segments investors recognise and regularly allocate to. Development finance actors should build institutional capacity around specific instruments rather than treating each transaction as bespoke.
Supply. Supply. Supply.
Lack of supply underlies every constraint to public capital markets optimisation for mobilisation and development. In both global and local EMDE capital markets, the development finance system has a unique role to play in encouraging supply and building liquidity. Without these market fundamentals, no other solutions will be sufficient.
Build linkages between EMDE assets and the largest pools of capital
Linkages between EMDE assets and the largest reservoirs of local and global capital do not fully exist yet. This is a major reason capital is not flowing at scale. This can be done in three ways:
Back financial products that can better represent and aggregate EMDE assets
One reason global investors do not allocate to EMDEs is that few products give them access, and those that exist don’t reflect the scale of the opportunity. Development finance actors hold a significant share of growth-asset stock and should partner with the asset manager community to create investable products that can bring global and local capital to public capital markets.
Public capital market divestiture from mature companies can super-charge supply and crowd-in investors
Development finance actors should consider public capital market exits for their significant private equity holdings across developing markets, particularly where they are a dominant investor in this asset class, and recycle this capital into the next generation of growth companies. This will boost quality supply in the market, while driving exit mobilisation and public capital market development.
Use technology to reduce friction and boost access
Technology is not a binding constraint on public capital market development or a panacea, but it can unlock supply and demand at the same time. New technologies can reduce transaction costs, build liquidity and support the democratisation of investment in EMDEs. Digital marketplaces could become valuable supply on-ramps, channelling a wider set of EMDE companies and projects into public capital markets.