Blended Finance

What is Blended Finance?

Blended finance is an innovative investment approach that combines capital from public, philanthropic, and private sector investors with varying, and often complementary risk-return objectives to finance companies aimed at achieving positive social, environmental, and economic outcomes. In a blended finance model, public and philanthropic funding often serves to de-risk investments, providing first-loss protection or concessional terms that make the projects more attractive to private sector investors. The rationale is that by mitigating some of the perceived risks, these structures can mobilize additional private sector investors that would otherwise not have invested.

This approach is particularly prevalent in projects that target sustainable development goals (SDGs), where traditional funding mechanisms may not be sufficient or appropriate. The goal of blended finance is not only to address funding gaps but also to demonstrate the viability of projects that are perceived as riskier, thereby encouraging more private investment in the future.

Why Blended Finance

Blended finance is crucial in today's economic landscape because it addresses the critical funding gap obstructing the achievement of the Sustainable Development Goals (SDGs) by 2030. Traditional sources of development funding are insufficient to meet these goals, necessitating innovative solutions like blended finance to mobilize private capital. By reducing investment risks and enhancing potential returns, blended finance makes it possible for private sector investors to contribute to global challenges. This approach not only accelerates progress towards the SDGs but also opens up new markets and opportunities for investors, demonstrating that financial success can go hand in hand with social and environmental impact.

Partnerships & Network

The essence of scaling blended finance efforts lies in the profound strength of public-private partnerships. Since 2014, responsAbility has cultivated a robust network of partnerships. This network not only encompasses industry experts, advisors, and private investors. More importantly, it also includes public financiers, such as development finance institutions (DFIs), governmental bodies, and philanthropic donors. These public entities play a critical role by providing necessary funding, policy support, and strategic guidance, thereby amplifying our efforts in scaling blended finance. This strong network is essential in innovating and shaping the future of sustainable finance.

Our network of over 50 partners include: