By Nibal Zgheib
Strengthening its support for women, the European Bank for Reconstruction and Development (EBRD) is joining the 2X Challenge, an initiative calling on the G7 group of nations and development finance institutions to step up their investments in the empowerment of women.
EBRD President Odile Renaud-Basso said: “At the EBRD we are very proud to joining the 2X Challenge. This highlights our strong commitment to promoting gender equality – as one of the strategic priorities of the Bank – through our investments, policy engagement as well as regional and global partnerships.”
The programme includes access to entrepreneurship and leadership opportunities, quality jobs, and products and services that enhance women’s economic participation in emerging economies.
The 2X Challenge announced Wednesday that it had raised double its original US$ 3 billion gender finance target. Building on this success, the initiative will now seek to raise at least a further US$ 15 billion by the end of 2022 as new members join its ranks.
On top of the US$ 6 billion raised between 2018 and 2020, the 2X Challenge has mobilised another US$ 3 billion from private investors that recognise the value of investing in women in the developing world. The founders of the 2X Challenge said today that the new, significantly more ambitious goal underlines the success of investing with a gender lens to help women access quality jobs, build resilient businesses and manage the devastating impacts of the Covid-19 pandemic.
Chair of the 2X Challenge, Jessica Espinoza said: “The incredible increase in gender-lens investing that the 2X Challenge is unlocking in this next phase will play a vital role in creating equitable, resilient and sustainable economies in the post-COVID-19 recovery. Investing in women is good business – and a catalyst for achieving all of the other Sustainable Development Goals.”
Even before the coronavirus pandemic, women in emerging economies had significantly fewer economic and business opportunities than men. Covid-19 has compounded this inequity, with new research showing US$ 1 trillion could be lost from global growth if female workers in those sectors hardest hit by the pandemic do not return to the workforce.
A growing body of evidence suggests that identifying effective ways to support women as entrepreneurs, leaders, employees and consumers will increase gender equity, reduce poverty and promote more inclusive and robust economic growth. Women represent a growth market bigger than China and India combined.
The 2X Challenge was founded by CDC Group (UK), Proparco (France), the Japan International Cooperation Agency and the Japan Bank for International Cooperation, the United States International Development Finance Corporation, FinDev Canada, the German Development Finance Institution (DEG) and Cassa Depositi e Prestiti (Italy). Other development finance institutions have joined the organisation, including, Swedfund (Sweden), FinnFund (Finland), the Dutch Entrepreneurial Development Bank (FMO), the Swiss Investment Fund for Emerging Markets, the Danish Investment Fund for Developing Countries (IFU), the Belgian Investment Company for Developing Countries (BIO) and the European Investment Bank (EIB). New members joining this round of the 2X Challenge are the World Bank’s International Finance Corporation (IFC), the EBRD and the Austrian Development Bank (OeEB).
Over the last three years, more than 200 deals have qualified for 2X investment. Latin American businesses secured the most 2X funding, followed by sub-Saharan Africa, where the volume of deals has quadrupled over the past 12 months.
A core aspect of the 2X initiative is the establishment of the 2X Criteria, which have quickly become a global industry standard for gender-lens investing.
Projects supported include PEG Africa, a solar power company providing home systems to customers in West Africa, in which UK development finance institution CDC has invested US$ 12.5 million. Thanks to the 2X Challenge, the company has doubled the percentage of women it employs in leadership positions in Ghana from 22 per cent to 44 per cent.
Another example is ENDA Tamweel, Tunisia’s leading microfinance institution. The company has received 2X financing from a number of DFIs to promote access to microcredit for women. Since 1995, Enda Tamweel has allocated over 2.8 million microcredits to 730,000 micro entrepreneurs. At the start of 2018, the institution was operating via a network of 86 branches and 3 mobile branches, serving 337,000 microentrepreneurs across the country.
