Making Blended Finance Work for the Sustainable Development Goals

image of Making Blended Finance Work for the Sustainable Development Goals

The global community has spoken loud and clear: more resources must be mobilised to end extreme poverty and mitigate the effects of climate change. Blended finance - an approach to mix different forms of capital in support of development - is emerging as an important solution to help raise resources for the Sustainable Development Goals in developing countries. But scaling up blended finance without a good understanding of its risks could have unintended consequences for development co-operation providers. This report presents a comprehensive assessment of the state and priorities for blended finance as it is being used to support sustainable development in developing countries. It describes concepts and definitions, presents an overview of actors and instruments, and discusses lessons learned from blending approaches, tracking and data, and monitoring and evaluation. Its findings and recommendations are useful for policy makers and practitioners.

'Blended finance will contribute to faster economic growth, but to achieve this it is vital to get donors into alignment.'

Martin Wolf, Chief Economics Commentator, Financial Times

'Official development assistance continues to be a key way to finance efforts aimed at eradicating extreme poverty. However, the challenge is more than governments alone can manage. We must all think, work, finance and deliver development differently to mobilize private-sector resources and expertise to help the world’s poorest and most vulnerable people. Canada continues to promote innovative approaches to finance development and achieve sustainable growth for everyone.'

The Honourable Marie-Claude Bibeau, Canada's Minister of International Development and La Francophonie.

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Overview: What will it take to make blended finance work for the Sustainable Development Goals?

Blended finance is emerging as an approach to help bridge the financing gap for the Sustainable Development Goals. This chapter contains an expanded synthesis of the report, highlighting the challenges and opportunities for blended finance and outlining key policy recommendations. The chapter presents an overview of the main building blocks of blended finance – concepts, definitions, blended finance architecture and instruments – and highlights important gaps and challenges that need to be addressed. It presents policy recommendations for the development co-operation community and outlines the OECD DAC Blended Finance Principles to improve blending efforts. It highlights an agenda for action for research work in this area going forward.


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