At last blended finance may have its time in the sun
The use of catalytic capital to mobilise private sector investment has 'hardly met expectations'; that may be about to change.
Expert analysis by Toby Mitchenall
The climate crisis presents humankind with a need to mobilise capital urgently and at scale.
Blended finance – a longstanding way of mobilising capital with purpose, particularly into new geographies – should be a valuable tool in this endeavour. It is a deal structuring approach that uses catalytic capital – whether than be from a public or philanthropic institution – to encourage commercial private sector investment. Typically the mission-driven investor in a fund or deal takes on more of the risk to allow other commercial investors to participate on better terms. Those operating in the development finance sphere will be familiar.
A prominent recent example would be...