How sharing risks can mobilise investment for development

• Partnerships that help manage investment risks and turn project ideas into viable opportunities are crucial to mobilising finance for sustainable development.

GENEVA, Switzerland – A solar plant in a developing economy can use the same panels as one in Europe, but face financing costs at least twice as high. The difference is risk and how it is managed – a key topic at the World Investment Forum 2026, held in Doha, Qatar, from 25 to 27 October.

Reducing risks that hold back investment

High borrowing costs, limited capacity to prepare projects, and political, regulatory and currency risks continue to impede investment in many developing countries.

Geopolitical tensions and economic shocks add to these pressures, making investors more cautious and raising financing costs.

“When those risks look unmanageable, finance becomes more expensive, or disappears altogether,” said Pedro Manuel Moreno, acting secretary-general of UN Trade and Development (UNCTAD), in his remarks to the Forum.

The challenge is especially acute in least developed countries, where foreign direct investment fell by nearly 20 percent between 2015 and 2023.

Sharing risk to unlock finance

Guarantees, insurance and blended finance can help overcome these barriers by allocating risks to institutions best equipped to manage them, making projects more attractive to public and private investors.

Political risk insurance can protect investors against losses linked to conflict, expropriation, restrictions on currency transfers and breaches of contract. Between 2018 and 2022, such insurance covered around $150 billion in projects in developing countries.

Public-private partnerships can also help turn investment opportunities into projects by defining responsibilities, setting clear contractual obligations and establishing ways to resolve disputes.

But contracts alone cannot guarantee success: investors also need confidence that governments will honour their commitments and maintain predictable policies.

Stronger cooperation and partnerships

A Global Initiative for Investment Risk Sharing, proposed at the World Investment Forum, aims to expand access to risk-reduction instruments and attract capital to underserved markets.

The initiative calls for closer cooperation among governments, development finance institutions, export credit agencies, insurers and investors to improve financing conditions and make more projects investable.

A separate declaration of intention between UNCTAD and the Berne Union, the international association of export credit and investment insurers, seeks to enhance cooperation on trade and investment insurance and risk mitigation.

By strengthening risk-sharing mechanisms, project preparation and partnerships, developing countries can turn more development priorities into investable projects.

“Those are the risks we need to share,” said Moreno. “The more widely we share them, the further investment can reach. And the better the future we build.”