Every two years since 2016, the World Bank has been convening its ‘Fragility Forum’ – an important gathering across the humanitarian, development and peace ‘nexus’ on improving its efforts in fragile and conflict-affected contexts (FCS). The forum is critical recognition that the World Bank’s primary mandate of poverty alleviation cannot be achieved if it does not achieve it in fragile and conflict-affected places where 75% of the world’s extreme poor live.

It was not lost on many participants that 2024’s edition comes in the context of a far less optimistic time than previous years. In 2016, it was estimated more than 1.2 billion people lived in areas affected by conflict and fragility – today, that number is up 600 million, to 1.9 billion people.

Yet, over this same time, foreign direct investment into these places has fallen markedly, highlighting the difficulty that the World Bank and other international financial institutions (IFIs) have had in stimulating private sector development in fragile places. The link between lack of investment and increased displacement, food insecurity and climate vulnerability is clear and cannot be forgotten.

These negative trends  have developed despite the fact that the main World Bank funds (IBRD/IDA) grew by an average of 26.2 percent per year in FCS over the past five years and IFC more than doubled its own account long-term finance commitments in FCS from USD 1.2 billion (cumulatively) in FY17–19 to USD 2.8 billion in FY20–22. MIGA, the World Bank’s risk and insurance arm, has also significantly expanded its portfolios in FCS up to USD 3.5B from USD 2.1 B over the last three years. All this has been achieved as the IFC’s own impact measurement and monitoring system showed the impact of IFC investments in FCS was higher than in non-FCS.

A conclusion one can draw is that this progress is important, but coming from a low base and not enough. Basic conflict sensitivity tools, key to doing no harm, are still being rolled out to staff – while partnerships, a cornerstone in efforts to scale up in FCS – are still largely with large UN bureaucracies rather than with more locally situated civil society and non-governmental organisations that can better help situate and de-risk investments.

These factors relate to one of the major challenges acknowledged by Anna Bjelde, the MD of the World Bank, in her opening remarks - that the Bank is still struggling with understanding how it can play a more meaningful role in conflict prevention, echoing words by Jim Yong Kim eight years ago at the 2016 forum. This is reflected in how the great scaling up of the Bank’s activity in FCS has been in places where conflict has already broken out, such as Ethiopia and Sudan for instance.

It is in this conflict prevention role that Peace Finance approaches provide hope and solutions for IFIs seeking tangible solutions to build resilience to conflict. Intentional Peace Finance approaches articulated by the Finance for Peace Peace Finance Impact Framework (PFIF) put an intentional peace strategy at the front and centre of a potential investment approach, rather than as post-hoc consideration or as a component of a due diligence process. This is clearly needed, as the Bank’s own midterm evaluation of its FCV strategy stated: “In some contexts, the World Bank Group’s [WBG’s] work with the private sector would benefit from a better acknowledgment of and reference to conflict dynamics.”

Practically, the PFIF can help IFIs find ways their investments can more intentionally improve social cohesion, trust between groups, as well as between society and the state, and potentially reinforce peace processes and political settlements. Often these outcomes mean benefits are more evenly shared and that communities have greater agency in the design of investments that affect and benefit them.

By doing so, the Bank and other IFIs can play a greater role in preventing conflict before its outbreak, but also play a more catalytic role to crowd-in private investment which often perceives risks in FCS as greater than what they actually are. With partners, we look forward to showcasing positive examples of Peace Finance approaches at the 2026 edition of the forum.

The World Bank’s biennial Fragility Forum took place at its headquarters in Washington DC at the end of February and this edition was titled “Adapting and Innovating in a Volatile World”. Finance for Peace took part in a session on ‘Building Peace and Profit for Private Sector Engagement in FCV (Fragility, Conflict and Violence) Contexts’, with our Head of Research and Senior Peacebuilding Advisor Daniel Hyslop introducing Finance for Peace and our work, including the partnership with the African Development Bank Group.

The panel discussion was hosted at the World Bank offices on the Friday of the Fragility Forum week, with the day branded as Partners Day. In a full house, Elizabeth Hume, the Executive Director of the Alliance for Peacebuilding moderated the lively discussion which explored the potential of private sector partnerships to align peacebuilding and business ambitions.

The panellists were:

• Daniel Hyslop, Senior Peacebuilding Advisor, Interpeace’s Finance for Peace initiative
• Catriona Gourlay, Executive Director, PeaceNexus Foundation
• Frederik Teufel, Lead Coordinator, Partnerships, Innovation, Private Sector Development, African Development Bank Group
• Rob Jenkins, Assistant to the Administrator, U.S. Agency for International Development

Daniel Hyslop introduced the pioneering work of Finance for Peace at Interpeace to reduce the risk and cost of financing projects by integrating a peacebuilding dimension in their design. Finance for Peace has developed a model for this, the Peace Finance Impact Framework. Daniel introduced an example case from Ghana where the costs of raising capital for a project were significantly reduced with the inclusion of robust community dialogue and monitoring mechanisms. He highlighted that if such innovative financing mechanisms were to be scaled up with just a percentage of investment funding contributing to peacebuilding partnerships, this would amount to more than all aid for peacebuilding.

Catriona Gourlay reflected on the experience of PeaceNexus as a mission-aligned investor in both public and private markets. Through a peace-themed equity fund and other collective shareholder initiatives, PeaceNexus has engaged multinational companies to monitor their exposure to conflict risk and their performance in FCV contexts.  A common challenge for this work has been a lack of geographically specific data from companies. She called for more transparency from publicly listed companies on their operational footprint in FCV.

Frederik Teufel, African Development Bank Group, noted that peacebuilding organisations such as Interpeace and development banks are increasingly aligned and speak the same finance language. In response to rising instability, for example in the Sahel, he noted that governments, business and civil society are seeking new solutions. He cited the AfDB’s partnership with Interpeace’s Finance for Peace initiative as an example of pioneering work to integrate peacebuilding into the Bank’s instruments.

Rob Jenkins, U.S. Agency for International Development, confirmed that aid alone was insufficient to meet current peacebuilding challenges and that the US Global Fragility Act provided an opportunity for new collaboration with partners including business, especially in the pilot region of coastal West Africa.

We will share more about the team’s insights from the @World Bank #Fragility Forum in our next newsletter. If you have not signed up to it yet you can do so here: https://shorturl.at/abmZ1

This year’s Geneva Peace Week saw the Finance for Peace initiative of Interpeace host a policy briefing discussion jointly with the Permanent Mission of the Federal Republic of Germany to the United Nations in Geneva. The sessions was titled “Peacebuilding and private finance actors: investing in partnerships that create peace” and it attracted a full house on the second day of the Peace Week which celebrated its 10^th anniversary this year.

The session was moderated by Felix Kroll, Head of the Political Department at the German Mission, and the panellists included Finance for Peace’s partners representing the UN, a development finance institution and a civil society organisation from Mozambique:

Dr Roselyn Akombe, Chief, Peacebuilding Strategy and Partnerships Branch; Office of the Assistant Secretary-General for Peacebuilding Support.

Daniel Hyslop, Head of Research and Senior Peacebuilding Advisor; Interpeace – Finance for Peace initiative

Prof. Adriano Nuvunga, Director; Centre for Democracy and Development

Frederik Teufel, Lead Coordinator, Transition States Coordination Office; African Development Bank

The key points highlighted during the discussion were:

1. Conflict is growing but peacebuilding funding is at a 15-year low. The need to catalyse funding from new sources is urgent.
2. This requires building a market for peace by bringing together the peacebuilding and finance sectors. The private sector has real potential to unlock wealth in fragile and conflict-affected settings (FCS), but, importantly, local communities will only benefit if peace-aligned approaches are used.
3. Peace Finance builds on the global momentum generated by the New Agenda for Peace, and the UN Secretary-General’s call for international financial institutions to become ‘agents for peace’, which combined with the High-Level Advisory Board process on multilateral institutions reform, paves the way for the 2024 Summit of the Future.
4. Peace Finance seeks to not only embed a do-no-harm investment approach but it to actively contribute to peace by shifting away from grant-based, short-term peacebuilding to longer-term engagement with private sector actors, through partnerships with development finance actors.
5. Peace Finance provides a catalytic way of de-risking the investment environment by using peacebuilding mechanisms and of creating additionality for both investors and local communities, which is key to unlocking more investments into FCS.

See below for key quotes by the speakers during session.

Dr Roselyn Akombe: “When peace agreements fail to integrate women, civil society members, the youth, and private sector actors, they often fail. It is time for us to start de-risking for communities, to ensure that returns upon investments are invested back into the communities we serve. The Summit for the Future offers the opportunity to entrench these narratives and build more partnerships to create the right market for peace.”

Daniel Hyslop: “Peace Finance is not just a nice thing to do. It is the key paradigm to de-risking investments first for communities and then for investors. This is what we are here to do.”

Felix Kroll: “Blended financing is key to incentivising companies and investors to invest in high-risk environments, where livelihoods, peace, and economic growth are needed the most.”

Prof. Nuvunga: “If the private sector takes shortcuts on issues such as governance, human rights due diligence, inclusivity, it will ultimately lead to conflict. We need to shift the mindset of the private sector operating in conflict-sensitive areas towards community-centric development models, through the co-creation of strategies for peacebuilding”.

Frederik Teufel: “Inclusive approaches to development ensure that we leave no one behind. Peace Finance seeks to go beyond a do-no-harm approach to actively contribute to peace in contexts that have been marginalised politically and economically. Its ability to convene a diversity of stakeholders and create alliances with the African Union, Regional Economic Communities and African governments also ensures African-led, locally-driven solutions.”

The panel discussion was moderated by the incoming Executive Director of Finance for Peace, Rosy Khanna (left), and joint by speakers (from left to right): AfDB Mozambique Country Manager Cesar Mba Abogo; Executive Director of Mozambican civil society organisation MASC João Pereira; Leonardo Nhavoto, Local Content Manager, TotalEnergies; and Sarah Logan,Lead Researcher of the Finance for Peace research in Mozambique, and Director of Msasa Consulting.

The session titled “Call for Action on Innovative Peace Positive Private Investments” was designed to help the forum audience put the concept of Peace Finance into context in a fragile setting on the African continent. This 12^th and final session was the only one at the forum to focus on one country a a showcase, and also the only one to bring together the civil society and the private sector. Through Mozambique as a case in point, the panel outlined how we can mobilise peace-positive development finance and private investment for Africa’s fragile and conflict-affected areas.

Sarah Logan raised the curtain on some of the initial findings of the AfDB and Finance for Peace initiative’s innovative, joint research project, which is identifying opportunities for conflict-sensitive and peace-positive investment in the country.

Helping to outline the country context to the audience, Cesar Abogo said: “Mozambique is writing a new chapter and it is proving to be a very resilient country. The African Development Bankis playing a pivotal role by investing in agricultural, transport, sanitation, governance, gender, and climate change… 70% of our projects aims to build resilience in Mozambique."

He went on to say: We want to build a virtuous cycle to further the development of the country and the joint research by Finance for Peace and AFDB will support this.”

Representing the civil society of Mozambique, João Pereira, Executive Director of MASC, underlined the importance of working with all parties in conflict resolution. This entailed creating opportunities for all. He said: “By creating infrastructure like roads, people will start to develop their own enterprises. By focusing on creating infrastructure, we create opportunity for the people.”

When studying a context such as Northern Mozambique it is impossible to ignore the impact of global operators such as TotalEnergies. All actors need to be part of the solution.

At the start of his remarks, Leonardo Nhavoto, Local Content Manager at TotalEnergies in Mozambique, said: “Having Mozambique as a case study of conflict finance is bittersweet for me. Hopefully ten years later we can look back at this 5^th edition of this 2023 Africa Resilience Forum and note that things have changed a lot.”

“When conflict hit in the north, it was a moment of shock. The first stage of action for us was very humanitarian actions. We are now in the third phase, and the local government has returned to the area. We need to assess if the conditions are there for the local people to return. Total has an MoU with the government for vocational training.”

The joint research project between Finance for Peace and the African Development Bank continues in Mozambique until the end of the year.

The Finance for Peace initiative took centre stage at Africa Resilience Forum 2023 in Abidjan, Cote d’Ivoire, the biennial event highlighting financing in fragile contexts and organised by the African Development Bank.  

Concluding the milestone event, Finance for Peace hosted two panel discussions, providing the audience a more practical understanding of the currently existing peace-positive finance structures and initiatives. Moving from theory to practice, the final session provided an overview of Mozambique as a case study, and the country where Finance for Peace and the African Development Bank have started their joint Peace Finance research project. 

Session 11: Creating the Structures and Environment for Peace-Positive Finance – Finance for Peace Initiative 

The panel discussion was moderated by incoming Executive Director of Finance for Peace Rosy Khanna (left), with speakers representing different, prominent actors who are furthering peace in fragile and conflict-affected settings through their mandate (from left to right): Ambassador Deike Potzel, Director General for Crisis Prevention, Stabilisation, Peacebuilding and Humanitarian Assistance, Federal Republic of Germany; Dr Roselyn Akombe, Director, Peacebuilding Strategy and Partnership Branch, UN Peacebuilding Support Office; Hanna Mebrahtu, African Union Peace Fund representative; and Frederik Teufel, Lead Coordinator, Transition States Coordination Office, who delivered the concluding remarks of the session.

This session, focusing on innovative models such as the Finance for Peace initiative, brought together actors that have been developing Peace Finance structures and approaches in different contexts. Building on the ‘Innovating Financing for Peace’ event organised in Berlin in 2022, the panel discussion provided an update on how innovative approaches for Peace Finance are being developed, and their next steps.

The German Federal Foreign Office (GFFO) funds the Finance for Peace initiative. Representing the GFFO at the three-day forum, Ambassador Deike Potzel said: “I'm thrilled so many actors are now buying into the idea of Peace Finance. I have a feeling we can now get something really going. Everyone knows what green finance is. Now it’s time to focus on blue finance, Peace Finance.”

She added: "We need to talk more about the political will to change conflict dynamics. You need good governance and rule of law in order to facilitate livelihoods and make development possible. Peace-positive investment is one pillar of the solution, of what needs to be done", Ambassador Potzel said. “Partnerships are crucial, we need you all on this. We need Peace Finance Champions.”

Adding the voice of the UN Peacebuilding Support Office to the call for innovative solutions, Dr Roselyn Akombe said: "Ownership of the African continents is important because solutions that come from the outside do not meet our needs."

She mentioned the importance of measurable progress and results, and highlighted the conservation efforts of Burundi’s Kibira National Park through social cohesion is an example of how blended financing can support peace.

Representing the African Union Secretariat’s new Peace Fund, Hanna Mabrahtu noted: “The money that government spends in conflicts can be allocated to other areas. To education for example…there needs to be a redirection of the resources.” She added: “Sustainable and predictable financing has been the main challenge in financing peace. The African Union’s Peace Fund makes funding available at the early stages of conflict.”

Finance for Peace initiative’s Rosy Khanna summarised the session: “The potential is enormous and there is a lot of opportunity. But it will take time. There are no straight roads in development. The road is bumpy but at the end there is success.”

“Standard setting is important, and I am proud to say that Finance for Peace has developed a Peace Finance Impact Framework to avoid peace washing.”

“The fragility lens, the peace lens, has to become part of the language of development and part of the language for development finance. I would like to thank the AfDB for coming along with us on this journey. This forum has embraced it in a very powerful way.”

Frederik Teufel of the AfDB concluded: “This is a beginning of a journey. When we work with a peace institution, we realise we’re serving the same people.”

“Official development assistance is not sufficient to solve the problems. We need to tap into the capital markets. We need to have the standards for peace-positive investments in place. Mozambique has a lot of potential for this, as we will hear during the next session.”

“We are transforming development finance. We see the willingness of all these actors to do something new. Setting ourselves clear goals, we are very excited to work with all of you, our partners on this journey.”

More information:

Ambassador Potzel’s video from the forum: https://x.com/AA_stabilisiert/status/1709992026043781374?s=20

The three-day Africa Resilience Forum 2023, titled “Financing Security, Peace and Development for a Resilient Africa” and organised by the African Development Bank, started in Abidjan, Cote d’Ivoire, yesterday. Interpeace and its Finance for Peace initiative were featured prominently as one of the key partners of this milestone event. Peace Finance, an approach developed by the Finance for Peace initiative, was highlighted as a solution to the vicious cycle of conflict and underdevelopment.

A video by Finance for Peace to showcase Peace Finance was shown as part of the opening of the forum, helping to frame the event. The video was filmed as part of the joint research project by Finance for Peace and the African Development Bank in Mozambique.

Elhadj As Sy, Member of the Governing Board of Interpeace, was invited to speak on the opening panel titled “The Case for Peace-Positive Approaches that link Humanitarian, Development, Peace and Security Need”. He spoke passionately, outlining the importance of the peace, development and humanitarian nexus in providing sustainable approaches.

He said: “The key word is trust, between communities and governments. If that trust is broken, people remember. Any actors need to consider this question: Are we contributing to the problem, or are we solving it. We need to be building resilience of communities, building the path of a sustainable peace.”

Other speakers on the opening panel, jointly developed with Aswan Forum, included African Development Bank’s Vice President for Regional Development, Integration and Delivery Marie-Laure Akin-Olugbade; Gilles Carbonnier, Vice President, International Committee of the Red Cross; and Noura Hamladji, Deputy Assistant Administrator and Deputy Regional Director, Regional Bureau for Africa. The discussion on innovative financing solutions to advance peace was moderated by Ahmed Abdel-Latif, Director General, Cairo International Center for Conflict Resolution, Peacekeeping and Peacebuilding (CCCPA). 

Sitting next to As Sy, VP Marie-Laure Akin-Olugbade of the African Development Bank said: “In order to deliver on the Peace Finance agenda, we need to build innovative partnerships. We cannot pretend to be able to do everything alone, but we can work together.”

“We particularly like all the work Interpeace is doing on Peace Finance, and there is a lot of potential there.”

Ambassador Deike Potzel, Director General for Crisis Prevention, Stabilisation, Peacebuilding and Humanitarian Assistance, Federal Republic of Germany, also attended the Africa Resilience Forum. Witnessing the signing of the memorandum of understanding between Interpeace and the AfDB, she said:

“I am so delighted to have witnessed the signing of the MoU between AfDB and Interpeace, to address the issues we are talking about today. This is about making the systems fit for purpose and shrinking the needs.”

“We are also listening to the UN Secretary-General who has called for sustainable fnancing for peace, which is also a part of the New Agenda for Peace. We need to unlock the different sources of funding including the private sector, DFIs and IFIs.”

Ambassador Potzel added: “This is what we are passionate about. We want to make this happen. I want to thank the AfDB for picking up the baton, and I also want to thank Interpeace for working on standards for peace, which is most important. The blended financing might help business not to shy away from the fragile contexts. This is where the future is.”

The 5^th Africa Resilience Forum continues until Thursday when Interpeace’s Finance for Peace initiative hosts two panel discussions titled creating the structures and environment for Peace-positive finance and call for action on innovative peace positive private investments.