‘Blended’ finance is key to achieving global sustainability goals, says report
Tackling climate change and achieving the world’s sustainable development goalswill require publicly funded and private sector banks and institutions to be far more willing to join forces to provide “blended” finance to projects, according to a new study.
Blended finance is the term given to the use of public or philanthropic capital to spur private sector investment in projects aimed at achieving the sustainable development goals. Already, this market is worth about $50bn globally, but experts said on Tuesday this sum could double within the next three to four years.
In a report to be presented on Wednesday at the World Economic Forum in Davos, the Business and Sustainable Development Commission found that private sector investors could take advantage of blended finance to gain access to rapidly growing markets in the developing world.
The commission has set up a taskforce specifically to consider blended finance and how to encourage growth in the sector. In its report, the taskforce found that there was great fragmentation across the market and called for public and private investors to pool their resources to create more giant funds, worth more than £1bn each, to take over from the smaller funds, of about $100m in size, which currently dominate the blended finance landscape.
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