When transparency pays off: how new data might just have unlocked $600 billion in new lending capacity.

After years of patient technical work by the small team of experts behind the Global Emerging Markets (GEMS) Risk Database, a significant breakthrough has just been announced. The GEMS consortium has spent considerable time and effort building, refining, and carefully releasing an increasingly granular dataset and accompanying report which includes the defaults and recoveries across sovereign and non-sovereign lending portfolios of leading multilateral development banks. Their persistence has now paid off in a remarkable way.

Last week, during the World Bank’s annual meetings, Standard & Poor’s (S&P) announced that it had revised its approach to assessing the risk associated with sovereign operations by multilateral development banks (MDBs). The change, made possible by the public release of the increasingly granular GEMS data, means that MDBs will in future need to hold less capital to cover their liabilities. In other words, S&P now recognises that MDB sovereign portfolios are less risky than previously assumed.

At an event in Washington DC on Thursday 16^th October, S&P estimated that this adjustment could free up between $600 billion and $800 billion of MDB capital over the next decade.

The long road to transparency

The path to this point has been long and demanding. Once the decision was made to make GEMS data publicly accessible, the consortium faced the enormous challenge of finding a way to disclose information that could not legally be shared at the investment level because of decades-old confidentiality agreements. The team succeeded in creating a model that anonymises and aggregates data while still allowing meaningful analysis by sector, country, and time period.

Although GEMS was established in 2009, it was only in recent years that significant pressure began to build for the public disclosure of its data. The initial push focused on releasing the data to better inform private sector investors, reduce perceived risk, attract additional private investment, and expand financing in emerging markets. While it was always recognised that the data could also help inform discussions about the multilateral development banks’ own capital adequacy requirements, that was not the main driver at the time.

At Publish What You Fund, we began examining GEMS in 2018 as part of our work on development finance transparency. Since then, we have met with the GEMS team and analysed their reports, engaged with the credit rating agencies, briefed journalists, met with lawyers to discuss issues of commercial confidentiality, and engaged with private sector investors and their networks to better understand their needs. We have also briefed shareholders, government officials, Executive Directors and the chairs of MDB risk committees, and engaged with ILX about their early use of GEMS data to strengthen investor confidence and support the launch of the ILX Fund.

We initially called for the release of the data and, over time, sought greater granularity and the inclusion of supplementary information such as recovery rates. Over the past seven years, we, together with fellow advocates, shareholders, journalists, private sector institutions and networks (see the list at the end), have maintained consistent pressure to ensure that data transparency remained a priority, particularly through inclusion in the Capital Adequacy Framework (CAF) report and the subsequent G20 MDB reform agenda.

Why this matters

The release of GEMS data has enabled credit rating agencies such as S&P to revisit their methodologies and recalibrate MDB risk assumptions. The implications are profound.

The $600 billion to $800 billion in additional headroom S&P estimates could be unlocked over the next decade is dramatically greater than the lending-capacity gains projected in the CAF report. While timeframes differ slightly, the G20’s implementation roadmap for the CAF estimated roughly $200 billion in extra headroom over ten years, while later G20 statements suggested as much as $357 billion might be achievable. The S&P-driven recalibration therefore exceeds those estimates several-fold, highlighting both the transformative power of high-quality data and the risk of under-investing in transparency.

Questions that remain

It is only right to acknowledge the GEMS team, who have undertaken the complex task of analysing and cleaning the data, then producing and publishing the reports. The reports now include default rates by region, sector and year. The difficulty is compounded by the need to adhere to strict guidelines imposed by the data’s origins in contracts signed by the MDBs-contracts which, given the approaches these institutions use, render much of their information highly confidential. At the same time, it is fair to ask a few questions. Should it really require this much time and effort to release data capable of having such transformative financial and developmental impact? And when transparency can unlock hundreds of billions in new capital, are MDBs truly allocating sufficient resources to their data and disclosure teams?

The GEMS consortium is already exploring ways to add returns data to the platform, expanding beyond risk and default information. This next step could help signal the true opportunities in emerging markets and strengthen the evidence base for investment. Beyond this there are discussions, not least those led by the Hamburg Data Alliance, about what other data such as interest rates, term sheets, deal structures – could usefully be disclosed to the markets to encourage participation.

Still, contractual barriers remain. MDBs’ agreements with clients routinely classify information as commercially confidential, requiring anonymisation and aggregation before it can be shared. Reforming these clauses could enable future data to be released directly, reducing the need for intermediated systems like GEMS and allowing deeper learning across institutions.

Looking ahead

The new headroom created by S&P’s recalibration represents a tremendous opportunity — but only if the capital is used wisely. Where this new capacity flows, how it is targeted, and whether it supports genuine impact will be the next tests. Ensuring that this financial space translates into real developmental outcomes must now be the priority.

It has taken years of advocacy, dialogue, and technical refinement to reach this point. The achievement belongs first and foremost to the GEMS consortium, whose perseverance has demonstrated the tangible value of transparency. The wider community of advocates, analysts, and shareholders who sustained the political and policy pressure played an important supporting role – keeping attention on the potential of data and helping to ensure that the effort stayed on the global reform agenda.

This is what meaningful progress looks like in development finance. It is complex, incremental, and often invisible – until suddenly, it unlocks hundreds of billions of dollars.

Endnote

Breakthroughs like this are only possible when a broad range of actors work towards the same goal. We claim only a very small role in this win. We’d like to acknowledge the extensive work of so many others in making this possible.

• Gregor Cigut (Head of the GEMS Secretariat) and Rapti Goonesekere (Senior Adviser to Risk & Finance Vice President at IFC)
• Center for Global Development (Nancy Lee, Karen Mathiasen, Charles Kenny, Samuel Matthews and Sam Attridge – formerly with ODI Global)
• The Centre for Development Finance Studies, including Thomas Venon (who also wrote this important piece)
• ODI Global, including Neil Gregory and Chris Humphrey
• Risk Control, William Perraudin (who undertook substantial analysis on MDB Sovereign loan credit performance and preferred creditor status in 2022 and 2024)
• The Global Partnership for Sustainable Development Data, Claire Melamed and Jenna Slotin.
• From the private sector, leading voices included those from Allianz Global Investors including Nadia Nikolova and Leticia Ferreras Astorqui, Marie-Aimee Boury of Societe General, from the Investors Leadership Network Amy Hepburn, and Hubert Danso of Africa Investor.
• From the media, Toby McIntosh of Eye on Global Transparency, Jessica Pothering of Impact Alpha, Adva Saldinger and Shabtai Gold of Devex.
• From the philanthropies, Ryan McMaster, Katherine Tan (now at Rockefeller), Iftin Fatah and Matt Eldridge of the Gates Foundation, and the team at Children’s Investment Fund Foundation (CIFF) who support our work.
• Finally it’s worth noting the work of the Hamburg Data Alliance (HDA), launched in 2024 by the German, UK, Canadian and Dutch governments, and hosted by the OECD. The HDA continues to push for greater transparency of MDB (and DFI) investment data.

Apologies to the many individuals and organisations not mentioned here by name, but sincere thanks to all who have contributed. Your efforts will be recognised not through words, but through the lives transformed by the investments made possible by this newly released capital.