The Why and How of Blended Finance : Recommendations to Strengthen the Rationale for and Efficient Use of Concessional Resources in Development Finance Institutions’ Operations
Blended concessional finance (BF), the use of catalytic capital from public or philanthropic sources to increase private sector investment—is becoming an important instrument to support the 2030 Agenda for Sustainable Development. Together with oth...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
International Finance Corporation, Washington, DC
2021
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/856201613568586386/The-Why-and-How-of-Blended-Finance http://hdl.handle.net/10986/35169 |
| Summary: | Blended concessional finance (BF), the
use of catalytic capital from public or philanthropic
sources to increase private sector investment—is becoming an
important instrument to support the 2030 Agenda for
Sustainable Development. Together with other Development
Finance Institutions (DFIs), IFC has been at the forefront
of developing and upholding high standards as an
implementing entity of concessional resources. Building on
these standards, this paper offers recommendations to
further strengthen the rationale for and efficient use of
blended concessional resources. Central among these is the
need to unpack better the rationale for BF, which requires
justifications for development impact, additionality and the
use of concessionality. The paper discusses ways to deploy
concessional finance more efficiently once the rationale is
correctly identified and articulated. It argues that the
Coronavirus (COVID-19) pandemic not only raises the urgency
to deploy BF efficiently and effectively, it also represents
an exceptional circumstance to consider the use of BF in portfolio. |
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