J.P. Morgan has created the J.P. Morgan Development Finance Institution (DFI) to expand its development-oriented financing activities in emerging markets.

In consultation with leading development institutions, J.P. Morgan has created rules-based criteria to help identify business activities and opportunities that generate both financial and developmental returns.

“By defining eligible transactions and anticipating their impact, we can help attract much-needed private investment to developing countries,” said Daniel Pinto, Co-President of JPMorgan Chase and CEO of the Corporate & Investment Bank. “Our aim is to increase engagement with clients and investors interested in financing critical projects and transactions in emerging markets.”

The global development community has stated the importance of private capital to cover an estimated $2.5trn annual funding gap to achieve the SDGs by 2030.

There is also strong and growing demand from the investor community to attain both financial and developmental returns.

J.P. Morgan believes it can play a key role as these forces converge.

The JPM DFI will use J.P. Morgan’s global scale and resources to expand its efforts in development finance and mobilize private capital towards projects to support development in emerging markets.

The JPM DFI will channel financing and strategic advisory to public and private sector clients that promote economic and social development in countries eligible to borrow from the World Bank under the IDA, Blend, and IBRD lending groups.

Leading J.P. Morgan’s new effort is Faheen Allibhoy, a seasoned manager and investment professional with deep experience in emerging markets and development finance.

Allibhoy, who will be based in New York, had an 18-year career at the International Finance Corporation, most recently as Country Manager responsible for operations and client relationships in West Africa.

Daniel Zelikow, Global Head of J.P. Morgan’s Public Sector Group and Co-Head of the Infrastructure Finance and Advisory practice, will chair the DFI’s governing board.

“It’s an honor and privilege to join J.P. Morgan’s DFI,” said Allibhoy.

“J.P. Morgan’s global scale, expertise, and suite of financing capabilities provide an excellent platform to make a real difference in emerging markets.”

The United Nations estimates that achieving the Sustainable Development Goals – which seek to address basic infrastructure, food security, climate change, health, and education – by 2030 will require $5 to $7trn per year, with an annual investment gap of about $2.5trn in developing countries.

By galvanizing private capital towards this ambition, the J.P. Morgan DFI aims to help narrow the funding gap.

With its newly-launched Development Finance Institution, J.P. Morgan expects to attract additional investment into emerging economies – including connecting philanthropic or concessional funds with private capital to spur investment through blended finance models.

In 2019 alone, J.P. Morgan served clients in 82 of the 144 World Bank-eligible borrowing countries. The DFI estimates that J.P. Morgan will be able to finance development activities valued at more than $100bn annually from investment banking transactions alone, with additional contributions from its markets businesses.

The J.P. Morgan DFI intends to work with existing clients, both governments and those in the private sector, as well as prospective clients across the capital markets.