Additionality
The Bank assesses and evaluates additional inputs ("additionality") created from its intervention of providing non-sovereign EDPF loans. Additionality can be classified into financial additionality and value additionality as per the definitions provided by the OECD DAC.
- Financial Additionality : A transaction is considered financially additional if public funds are extended to an entity which cannot obtain finance from private markets with reasonable terms due to the high-risk or low-return nature of the project it intends to implement, or if such public support catalyzes investment from the private sector that would not have otherwise invested, which consequently, contributes to the development goals of developing countries.
- Value Additionality : A transaction is considered value additional if the public support provides expertise and knowledge, promotes environmental and social standards or fosters sound corporate governance that the private sector is not offering.