OECD DAC Blended Finance Principles for Unlocking Commercial Finance for the Sustainable Development Goals

Organisation for Economic Co-operation and Development (OECD)

Blended nance is a key tool for direct mobilisation of commercial capital and o ers an opportunity to move towards fully market-based nancing in support of the SDGs. The private sector plays an important role in developing, launching and executing projects in developing countries. Both dimensions of the private sector, as the nancier and as the investee, are crucial in the context of blended nance. The Principles focus primarily on commercial actors as a source of potential nancing for development that has not yet been targeted towards the SDGs.

The Principles have been developed in close co- ordination with other international initiatives on blended nance. This includes notably the DFI Enhanced Principles on Blended Concessional Finance for Private Sector Projects4 which address critical blended nance topics at the operational level by taking the perspective of implementing institutions. Meanwhile, the Business & Sustainable Development Commission has focused on gathering the private sector perspective.

The Principles are targeted at the policy level, re ecting the development mandate of DAC donors, and the policies and instruments under their political oversight. They aim to ensure that blended nance is deployed in the most e ective way to address the nancing needs for sustainable development as set out in the Addis Ababa Action Agenda (AAAA), by mobilising additional commercial capital and enhancing impact. Whereas both concessional and/or non-concessional development nance can be part of blended structures, the use of concessional resources requires particular care, given its scarcity. Moreover, potential competitive distortions need to be minimised and complementary objectives, such as structural reforms, pursued.

Website: http://www.oecd.org/dac/financing-sustainable-development/development-finance-topics/blended-finance.htm

    01 January, 2018
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