Upon completion of this course, participants will be able to:

• Analyze the specific **liquidity and funding risk drivers** unique to DFI balance sheets, including long-term project lending and market reliance.
• Develop and execute **DFI-specific liquidity stress tests** simulating market disruption, government funding withdrawal, and rapid loan disbursement.
• Design an optimal **Asset-Liability Management (ALM)** strategy to mitigate maturity and currency mismatches for long-term development assets.
• Establish an effective **contingency funding plan (CFP)**, identifying and securing potential sources of liquidity during market stress.
• Implement key liquidity risk metrics (e.g., survival horizon, funding concentration) and internal reporting dashboards.
• Understand the role and constraints of government guarantees and callable capital in supporting DFI liquidity profiles.
• Formulate policy on the prudent management of debt issuance, currency hedging, and capital market access.
• Develop an internal pricing mechanism for liquidity risk to ensure accurate costing of long-term development projects.

• Treasury and Funding Managers at Development Finance Institutions (DFIs).
• Risk Management and ALM (Asset-Liability Management) Specialists.
• Financial Analysts and Strategists focused on DFI Balance Sheets.
• Supervisory and Regulatory Staff overseeing DFI Prudential Risk.
• Internal Auditors focused on Liquidity and ALM Controls.
• Senior Management involved in Capital Planning and Funding Strategy.

• ALM Strategy and Mismatch Mitigation Workshops
• DFI Liquidity Stress Testing Simulation Exercises
• Group Activities on Designing a Contingency Funding Plan (CFP) Activation Protocol
• Case Studies on DFI Funding Crises and Recovery Strategies
• Expert Lectures on DFI Debt Issuance and Investor Relations
• Individual Exercises on Calculating Survival Horizon and Funding Concentration Limits

Unit 1: DFI Balance Sheet and Funding Risk Profile

• Mapping the typical DFI balance sheet: illiquid long-term assets vs. non-deposit liabilities (bonds, MDB loans).
• Identifying the core funding risk drivers: market access, refinancing risk, sovereign exposure.
• Review of international best practices and regulatory guidelines for DFI liquidity management.
• The challenge of funding development assets in local currency vs. hard currency debt issuance.
• The role of callable capital and sovereign support mechanisms in the DFI funding structure.

Unit 2: Liquidity Stress Testing and Metrics

• Designing **DFI-specific liquidity stress test scenarios** (e.g., sovereign debt downgrade, donor withdrawal, political crisis).
• Calculating the **survival horizon** under various stress assumptions for cash inflows and outflows.
• Monitoring key liquidity metrics: Net Stable Funding Ratio (NSFR) applicability, funding concentration limits, and unencumbered assets.
• Protocols for integrating market-wide liquidity data into DFI-specific risk assessments.
• Developing an internal monitoring dashboard for real-time liquidity risk indicators.

Unit 3: Asset-Liability Management (ALM) Strategy

• Implementing a strategic **Asset-Liability Management (ALM)** framework for long-term lending.
• Techniques for mitigating **maturity mismatch** between long-term loans and shorter-term market debt issuance.
• Managing **currency mismatch** risk through forward contracts, swaps, and local currency funding instruments.
• Internal transfer pricing mechanisms to accurately price liquidity, interest rate, and currency risk into project loans.
• Analyzing the impact of rapid loan disbursement cycles on short-term liquidity needs.

Unit 4: Contingency Funding Planning (CFP)

• Developing a robust **Contingency Funding Plan (CFP)** with clear triggers and activation protocols.
• Identifying and pre-positioning **contingent funding sources** (e.g., committed lines of credit, asset sales, government support).
• Protocols for securing collateral, managing communication with funding providers, and minimizing reputational risk during CFP activation.
• Reviewing the legal and operational feasibility of asset securitization as a contingent funding option.
• Designing a communication strategy for internal and external stakeholders during a liquidity crisis.

Unit 5: Policy, Governance, and Oversight

• Formulating the DFI's **liquidity risk appetite statement** and setting internal exposure limits.
• Governance requirements for the ALM Committee and Board oversight of funding strategy.
• Compliance protocols for regulatory liquidity requirements (adapted Basel standards).
• Auditing the effectiveness of the CFP and the backtesting of liquidity stress test results.
• Strategic considerations for optimizing the debt maturity profile and investor base diversity.