Parliament votes on the injection of private capital in the Belgian Investment Company for Developing countries (BIO)

The reform of BIO aims at opening BIO’s capital to private investors who are not only looking for profits but who are also concerned about the social and environmental impact of the projects they invest in. Currently, BIO is only working with public funds and it manages budgets of around EUR 740 million. With this money, BIO supports the private sector in emerging and developing countries in order to foster economic growth and sustainable development. Besides its shares and long-term loans, BIO also provides technical support in order to reinforce local capacity. In this framework, BIO puts the emphasis on the micro, small and medium enterprises that play a central role in the promotion of innovation, the creation of prosperity, revenues and jobs, as well as the mobilisation of tax revenues which in turn can be invested in the reduction of poverty.

The current law allows BIO to acquire shares in investment funds but does not explicitly foresee the possibility for BIO to create and manage such funds. The new law will allow BIO to create investment funds that will be financed essentially from the private sector for their means of operation and that will be managed by BIO. BIO will only be able to take minority shares. At no point can there be question of tied aid, as was the case in a distant past. The objective remains to support the local private sector in the South all the while fully complying with the OECD rules on development cooperation.

Involving the private sector more 
The reform is an element of the strategy of Deputy Prime Minister and Minister for Development Cooperation Alexander De Croo which consists, in the framework of the international development agenda, in putting the emphasis on an inclusive and sustainable economic growth in the partner countries of Belgium and to further involve the private sector to achieve the Sustainable Development Goals. This approach is entirely in line with the international agreements on development adopted last year at the UN. In this new framework, international development is not only a matter of States and non-governmental organisations but also of the private sector.

The World Bank estimated that to achieve the new Sustainable Development Goals by 2030, it is “not billions but trillions” that would be needed. It is impossible that such means are only harvested at the level of public institutions. It is on the private sector that they will largely need to be levied. Minister De Croo will convene this year a broad coalition of Belgian enterprises wishing to engage in favour of the Sustainable Development Goals.