Blended finance is the strategic use of public or private funds, including concessional tools, to mobilise additional capital flows (public and/or private) to emerging and frontier markets and represents one approach that has the potential to attract new sources of funding to the biggest global challenges.
Understanding the indispensable role of Official Development Assistance (ODA) in financing the Sustainable Development Goals (SDGs), the international community acknowledged the need for significant additional development finance – and accorded a prominent place to private sector participation. The vision underpinning the 2030 Agenda is broad and ambitious, calling for an equally broad and ambitious financing strategy.
The OECD Development Assistance Committee (DAC) in February 2016 agreed to develop ‘an inclusive, targeted, results-oriented work programme’ on blended finance :
These mechanisms will provide the much needed recommendations to bring together public and private investors for the use and deployment of blended finance to achieve the SDGs.
Infographic - The Private Sector : The Missing Piece of the SDG puzzle
Development Co-operation Report 2016 : The sustainable development goals as business opportunities
"Blended finance offers huge, largely untapped potential for public, philanthropic and private actors to work together to dramatically improve the scale of investment in developing countries. Its potential lies in its ability to remove many bottlenecks that prevent private investors from targeting the sectors and countries that urgently need additional investment.....The time is right for development funders to take bold action and actively commit to embracing the blended finance approach in a mainstream and systematic way."
Maximising bang for the buck: Risks, returns, and what it really means to use ODA to leverage private funds, Paddy Carter (Development Matters, 15 November 2016
"...the pressure is mounting to find more creative ways to leverage private finance using ODA. But how?"
For more information, questions or comments, send an email to: DAC.Contact@oecd.org