How to Remove Barriers to the Spread of Sustainable and Transformational Finance

Blended finance is a form of mixed financing in which public funds are used to raise private capital in pursuit of impacts linked to the pursuit of the Sustainable Development Goals (SDGs). Innovative blended finance structures have proliferated in recent years. The challenge for public authorities with these structures is to anchor a private finance investment strategy in overall public planning. Furthermore, by co-investing with the private sector, the public sector develops a good understanding and appropriate pricing of the risks that the private sector is prepared to bear, and can thus better calibrate the need for concessional funds and subsidies. This article highlights how our approach to blended finance can help remove certain barriers to scaling up sustainable finance, not only in terms of bankability, but also in terms of coordinating public policies and private investments and standardizing impact measurements, in order to ultimately bring about the emergence of a new asset class and new sustainable economic models.