The power of better access to data

Mobilising capital for emerging markets and developing economies requires a collaborative effort, write Dirk Meyer and Melinda Bohannon

Emerging Markets and Developing Economies (EMDEs) offer compelling investment opportunities.

These markets are projected to be key drivers of global economic growth, with EMDEs expected to contribute about 65% of global economic growth by 2035. This expansion is supported by favourable demographics, abundant natural resources and technological as well as manufacturing capabilities¹.

As traditional markets mature, EMDEs offer potentially higher returns and diversification opportunities for investors willing to engage with these dynamic markets².

However, private capital flows into EMDEs remain far below what is needed to achieve the Sustainable Development Goals (SDGs). A study by the Climate Policy Initiative states that only 18% of climate finance in Africa comes from private sources – well below the private sector share in any other region³.

One key obstacle to investment in EMDEs is a lack of high quality, accessible data to enable firms to better price risk. Without this, investors rely on their perceptions of risk, which can be higher than is actually the case.

The African Development Bank Group's African Economic Outlook 2023 reported that, as a region, Africa had the lowest default rate on infrastructure project finance worldwide⁴.

The latest data releases of the Global Emerging Markets (GEMs) database also challenge the conventional view that EMDEs are high-risk destinations for investment.

Yet, this is not reflected in market pricing because investors lack access to high quality, granular credit risk and other data, limiting investors' ability to accurately price risk.

The question of how data can help to shift the EMDE investment narrative from risk to opportunity was a central theme at the OECD Community of Practice on Private Finance for Sustainable Development (CoP-PF4SD) Conference in Paris in early February.

The conference brought together representatives from governments, private sector, Multilateral Development Banks (MDBs), Development Finance Institutions (DFIs) and thinktanks. A key takeaway was that there is no shortage of ongoing efforts to improve data availability and transparency, but without better coordination, their impact will be limited.

Since private investors are hesitant to consider investments targeting EMDEs, governments, MDBs, DFIs, and private sector actors need to act to give more confidence in the system and tackle both real and perceived risks.

Collaboration between governments, investors, MDBs, DFIs, and other key players is needed to achieve real progress.

The Hamburg Data Alliance: A collaborative effort to drive change

2025 is a critical year for changing the context around private capital mobilisation. Addressing key challenges in improving the quality, accessibility, and availability of risk data for investments in EMDEs will help mobilise greater volumes of private investment to finance the global development, climate, and biodiversity goals.

Progress has already been made on some fronts. For example, the GEMs database has made important steps towards making more granular data available. But further work needs to be done, and GEMs alone will not solve the problem.

Founded at the Hamburg Sustainability Conference in October 2024, the Hamburg Data Alliance is a joint UK and German initiative bringing together governmental, non-governmental and private sector partners who want to make a step change in collaboration and improve availability of, and access to, comprehensive data.

The Canadian and Dutch governments have joined the steering committee alongside the OECD, the Association of European Development Finance Institutions (EDFI), the Private Infrastructure Development Group (PIDG), and Publish What You Fund to drive this change. Further institutions and initiatives make up a "friends group" for this Alliance.

The Hamburg Data Alliance, as a coalition of stakeholders that agree on the importance of enhancing data availability and transparency, aims at a dual approach: changing the ecosystem and identifying concrete actions towards the expansion of data access.

"The latest data releases of the Global Emerging Markets (GEMs) database also challenge the conventional view that EMDEs are high-risk destinations for investment. Yet, this is not reflected in market pricing because investors lack access to high quality, granular credit risk and other data, limiting investors' ability to accurately price risk"

The Fourth International Conference on Financing for Development (FfD4) in Seville, the 2025 Hamburg Sustainability Conference, and COP30 in Belém will be key moments to push for progress. And wherever policy makers and leaders gather to discuss private capital mobilisation, the idea of better data to allow better investment decisions will be on the agenda.

The Hamburg Data Alliance has gone back to foundational principles, identifying what investors need and where the data gaps are, what additional data sets are available, what challenges are inherent in aggregating and sharing data such as standardisation and legal requirements, and how to improve access to and create more awareness of what is already available.

We need to broaden our existing coalition to fulfil the Hamburg Data Alliance's aim to enable better risk pricing, enhance transparency and contribute to shifting the narrative of EMDE investment from risk to opportunity.

We call on interested public and private sector actors, NGOs, and experts to join and strengthen a more inclusive and collaborative drive to expand data access.

The message is clear: better data means better investment decisions. If we want to unlock private finance for sustainable development, we must bridge the data gap – together.

Dirk Meyer is a Director General at BMZ.

Melinda Bohannon is a Director General at FCDO.

For more information, contact Anne Laible (BMZ) and Henry Kenrick (FCDO).