DfID to channel billions more aid money through private equity arm

DfID to channel billions more aid money through private equity arm

Date: 22 November 2016

Responding to news that DfiD was to divert an increased amount of aid money to its private equity arm, CDC, from £1.5 billion to as much as £6 billion, Nick Dearden the director of Global Justice Now said:

“From a luxury housing and shopping complex in Kenya, to gated communities in El Salvador, the CDC has an appalling record of funding developments in the global south that make a mockery of any notion of aid money going to help vulnerable communities that lack access to basic resources.
“It’s simply astounding that the government is planning on boosting it’s funding to this private equity outfit by billions despite the sustained criticism that CDC has faced from development experts. CDC managers have repeatedly been accused of being more interested in maximising returns than the development impact of the projects they were financing
“This is evidence that DfID is increasingly committed to a highly financialised, highly unequal, highly ideological form of ‘development’ which helps big business and not ordinary people. Many UK taxpayers would be genuinely shocked if they knew that billions of pounds of aid money was going to private equity institutions in the UK like CDC rather than to alleviate the conditions of poverty of vulnerable communities in the developing world. UK aid could be used to strengthen public services, support civil society, and build democratic and accountable institutions instead of corporate pork barrel projects or on companies that are profiting from poverty.”

The Guardian has listed some of CDC’s luxury investments:

• In El Salvador, a company that received $3.3m from CDC in 2004 built 10 gated communities amid growing local concern that such developments are putting pressure on water resources and privatising what the little green space left in the country.

In Kenya, $25m has been put into a 13-hectare (32-acre) mega-development in Nairobi called Garden City with hundreds of upmarket flats, a business hotel and what will be east Africa’s largest shopping centre.

• In Mauritius, more than $24m has gone to a developer whose portfolio includes a 170-hectare “aspirational ocean lifestyle village“, with luxury beachfront homes from $500,000 and an elite boarding school managed by the Berkshire-based Wellington College.

• In India, one CDC-backed business has developed what it describes as “South Asia’s first truly international luxury apartment project”, home to “a Forbes billionaire, prominent entrepreneurs, CEOs, directors and chairmen”.

Further reading:

What’s the point of 0.7% aid target if it gets spent on malls and luxury hotels?

0.7% on aid: a small contribution towards justice and equality