Support to and engagement with the private (for profit) sector has been a long-standing area of development co-operation. Evaluations of private sector engagement help partners understand what works and what does not – including how to avoid causing harm – and support accountability for the use of public resources. Evaluating in this field presents specific challenges, including issues related to additionality, the complexity of market dynamics, attribution of impacts, and availability of data. The Network on Development Evaluation of the OECD/DAC (EvalNet) – made up of independent evaluation experts – is working with partners to address these challenges.

Evaluating blended finance

Blended Finance has emerged as a potential way to increase investments to achieve the goals of the 2030 Agenda and the Paris Climate Agreement. However, the evidence base on the effectiveness and impacts of blended finance is weak, and evaluation efforts already underway have met a number of challenges, as elaborated in the OECD Working Paper Blended Finance Evaluation: Governance and Methodological Challenges (2018). The G7, amongst others, have called for greater transparency and accountability, including better monitoring and evaluation.

EvalNet’s Working Group on Evaluating Blended Finance aims to contribute to improved evaluation practice by developing a common understanding of how to evaluate blended finance operations. Ultimately, this work will support more effective blended finance operations for sustainable development.

The working group is co-ordinated by Denmark, Germany, Norway and the Secretariat.

• Work Stream 1: Core concepts in blended finance: Assessment of uses and implications for evaluation
• Work Stream 2: Evaluating financial and development additionality in blended finance operations
• Work Stream 3: Evaluating blended finance instruments and mechanisms: approaches and methods

Evaluating support to private sector

With the Busan Partnership for Effective Development Co-operation, many donors have increased engagement with the private sector, including working with the private sector:

• As a direct recipient of development finance, including investments, subsidies and loans
• As a beneficiary of development co-operation, including work to improve the regulatory environment, promote pro-poor growth, aid for trade, and making markets work for the poor (M4P)
• As a contractor or implementer of sustainable development projects and programmes
• As a provider of development related finance
• As a partner in Public-Private Partnerships or other engagements aimed at combined the strengths of different stakeholders.

Related work

• DAC Evaluation Criteria
• Blended Finance Principles
• Evaluations on support to private sector development on DEReC