Over time, the Italian Cooperation System has strengthened an innovative approach to financing for development, integrating traditional instruments and market mechanisms to maximise the impact of interventions in partner countries. This strategy is based on the belief that effective and coordinated use of public financial resources can serve as a catalyst for mobilising private capital, significantly expanding the scope of cooperation initiatives.
The financial architecture of Italian Cooperation initiatives is therefore based on a variety of complementary instruments, ranging from grant resources to mixed finance instruments. These include the Revolving Fund for Development Cooperation, which is one of the main mechanisms through which Italy supports sustainable development projects in partner countries, promoting investment in infrastructure, essential services and strategic productive sectors. The revolving nature of the Fund allows for the reinvestment of returned resources, ensuring its sustainability over time and encouraging a multiplier effect of interventions.
A key feature of Italy’s approach to financing for development is its ability to build partnerships with national and international financial institutions, developing co-financing strategies that enable support for large-scale projects. In particular, a traditional and well-established partnership with Cassa Depositi e Prestiti (CDP) enables Italy to combine its technical expertise in cooperation with the financial experience necessary to carry out structural interventions in key areas of sustainable development. This model of collaboration also extends to multilateral development banks and international financial institutions, including primarily the African Development Bank and the World Bank, promoting Italy’s participation in joint global and regional initiatives.
Particular attention is paid to the development of impact financing, a fast expanding segment that combines financial return objectives with measurable social and environmental results. Italy actively promotes the dissemination of expertise in this area by organising training and refresher courses for players in the Italian cooperation system. These activities, developed in collaboration with the Italian Agency for Development Cooperation (AICS) and international partners, aim to strengthen the Italian system’s ability to design and manage interventions using innovative financial instruments, such as social impact bonds, green bonds, and mixed finance mechanisms.
Within the framework of the Mattei Plan for Africa, financing for development also plays a central role in the bilateral debt swap initiative as a strategic lever to support Africa’s economic and social growth. In view of ensuring concrete and effective implementation of the Plan, Italy is structuring an integrated financial offering that combines public resources, guarantees, and de-risking tools, aiming, inter alia, to attract private investment in key sectors such as renewable energy, digital infrastructure, sustainable agriculture, and the development of small and medium-sized enterprises. This approach recognizes that mobilizing private capital is essential to closing the financing gap for the Sustainable Development Goals, estimated at trillions of dollars per year for developing countries.
The Seville Conference on Financing for Development
A particularly significant moment in Italy’s commitment to financing for development was the Fourth International Conference on Financing for Development, held in Seville from June 30 to July 3, 2025. On that occasion, Italy took a leading role in the international debate on the topic, launching a Call to Action – co-sponsored by over ten countries and five international organizations – aimed at strengthening capacity-building for Public Administrations in partner countries as a cross-cutting priority for cooperation initiatives.
Italy’s stance in the Seville Conference emphasized that capacity building in financing for development is a strategic investment to ensure the sustainability and effectiveness of cooperation interventions. Through the transfer of technical and managerial skills, partner countries can improve their ability to mobilize domestic resources, design effective fiscal and tax policies, as well as manage public debt sustainably. This approach helps strengthen the financial autonomy of developing countries, reducing their dependence on external aid and promoting endogenous growth.
In the Seville Conference Italy also outlined its bilateral debt swap initiative for African countries with debts towards Italy. Implemented between 2026 and 2035, it envisages using the funds converted into financing for development programs agreed upon by Italy and the debtor countries, in the spirit of the Mattei Plan for Africa. The initiative is a concrete response to the alarm over the debt issue constantly raised by countries of the global South in all relevant multilateral forums, and was also one of the priority themes of Jubilee 2025. It further strengthens the Mattei Plan’s vision of a strong partnership between Italy and Africa, a continent particularly vulnerable to debt, and is a concrete example of how innovative financial instruments can be used to support sustainable development and economic resilience.