NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

By Theresa Smith

While global climate-oriented blended finance accounts for 50% of deals launched annually, the aggregate finance level to address climate matters has dropped 60% over the last two years.

This is according to global blended finance network Convergence, which has just released their annual State of Blended Finance report. Blended finance is a structuring, not investment approach. It is the use of catalytic capital from public or philanthropic sources to increase private sector investment into developing countries to realise SDGs.

The report found a significant decline in aggregate financing levels for climate in recent years. Between 2019 and 2021, $14 billion was invested into climate-oriented blended finance transactions. This is a 60% decrease compared to the $36.5 billion invested between 2016 and 2018.