Samantha Power, head of USAID, announces new development fund at Davos 2023

The US Agency for International Development (USAID) is launching a new development fund aimed at boosting the private sector's contribution to global development. Samantha Power, the USAID Administrator, announced the fund while speaking at the World Economic Forum’s Annual Meeting 2023 in Davos, Switzerland.

“We want to get the word out that this new fund exists,” Power said. “We hope that companies will take the opportunity to act in partnership with us.”

The fund — titled the Enterprises for Development, Growth, and Empowerment (EDGE) Fund — is designed to create new private sector partnerships that advance development objectives. The fund is being established with an initial $50 million from the US government.

The EDGE fund is being launched as the need for humanitarian aid is increasing significantly worldwide. Last month, the United Nations appealed for a record $51.5 billion in aid for 230 million people in nearly 70 countries for 2023. The appeal constitutes a 25% increase from the ask in 2022.

“The needs are going up because we’ve been by smitten by the war in Ukraine, by COVID-19, by climate,” Martin Griffiths, the UN’s Under-Secretary-General for Humanitarian Affairs and Emergency Relief Coordinator, said in a statement. “I fear that 2023 is going to be an acceleration of all those trends.”

Unlocking private sector contributions has long been a challenge for development agencies and non-government organizations. One of the main issues, experts say, is the perceived risk of investing in distressed regions of the world.

“The problem is not financial resources, the problem is where we house them and how we invest in them," Vera Songwe, the Chair of the Board of the Liquidity and Sustainability Facility, said during the Annual Meeting. “On the [African] continent we have quite a number of countries that have the right policy environment and need liquidity.”

Private businesses whose commercial operations positively contribute to development needs are invited to apply to receive support from the EDGE fund. Several organizations are already set to receive support from the EDGE, USAID announced.

In Barbados, for example, the Blue-Green Bank in Barbados is slated to receive EDGE funding — along with co-funding from other sources — to support climate mitigation efforts such as resilient housing and water conservation. Meanwhile, the EDGE fund is set to support the Global Alliance for Trade Facilitation, which facilitates trade in burgeoning democracies like Zambia, Malawi and the Dominican Republic.

“The idea is that these resources exist,” Power stated, adding that the fund can help show business executives that “the barrier to entry is lower than you otherwise might have seen it.”