Now more than ever access to safe water and sanitation is critical to the health and resilience of the global community. It is vital to curb the spread of the COVID-19 pandemic today and to support the health of families tomorrow. Yet, two billion people do not currently have access to safe water and sanitation and two-thirds of healthcare facilities in low-income countries lack soap and running water. 

Convergence member, [Water.org](https://www.convergence.finance/institution/2fed618d-7733-4616-8865-d08245cb5a0c/view "Convergence Member | Water.org") has helped curate the upcoming R3 Co-Investment Convening that will take place on Thursday 6 August and focus exclusively on WASH investments.  The virtual convening will present a unique opportunity to highlight the importance of WASH as part of the COVID response and to build the resilience of vulnerable communities to future health shocks.

## Agenda:

__3:00pm - 3:20pm | Welcome by GIIN and Context Setting by Gary White, CEO & Co-founder, Water.org & WaterEquity__

__3:20pm - 3:40pm | Global Access Fund Presented by Mandira Reddy, Capricorn Investment Group, William Orum, Capricorn Investment Group, and Paul O’Connell, WaterEquity__

WaterEquity is the first-ever asset manager exclusively focused on solving the global water crisis. Co-founded by Gary White and Matt Damon of Water.org, WaterEquity was launched in 2016 to address the USD 18 billion market demand from individuals for affordable financing to meet their water and sanitation needs. WaterEquity’s third fund, the Global Access Fund, will invest in high-performing financial institutions across Asia, Africa, and Latin America, to enable them to scale their water and sanitation microloan portfolios. The fund will bring safe water and sanitation into the homes of at least 5 million people living in poverty, helping to reduce disease, keep girls in school, and increase economic potential. The Global Access Fund is a $150M fund with a 2:1 debt to equity ratio. WaterEquity is currently raising $40M in equity to accompany a $100M loan from the United States Development Finance Corporation (DFC) and $10M anchor equity investment from the Skoll Foundation.

__3:40pm - 4:00pm | Water Acceleration Access Fund (W2AF) Presented by Incofin and Corinne Bazina, Danone Communities__

Details forthcoming

__4:00pm - 4:20pm | Jibu Presented by Doug Spencer, Individual__

Jibu capitalizes and equips emerging market entrepreneurs to launch / grow franchises, with drinking water as the anchor product. The Jibu franchise network is now in seven countries in Sub-Saharan Africa with 2000 retail points, serving hundreds of thousands of customers daily. Jibu has developed a scalable franchise model that decentralizes production and distribution of drinking water and other essential products like fortified porridge and LPG in urban and peri-urban environments. The $2MM equity raise will fund a new CRM system, new product launches, and double the number of franchises by 2023.

__4:20pm - 4:40pm | Sanivation Presented by Meredith Shields and Carl Adams, Sorenson Impact Foundation__

Details forthcoming

WASH Co-Investment Convening

Water.org has helped curate the upcoming R3 Co-Investment Convening that will take place on Thursday 6 August and focus exclusively on WASH investments.  The virtual convening will present a unique opportunity to highlight the importance of WASH as part of the COVID response and to build the resilience of vulnerable communities to future health shocks.

Convergence Eventbrite

__Thursday, July 30th, 9am – 11:30am SGT (GMT+8)__

Registration closed. This seminar is at full capacity.

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Blending with Design and Preparation-stage Grants is a 2.5-hour (150 minutes) interactive seminar that will cover:
- How project preparation grants and design funding are used to mobilize additional private sector financing
- The potential of early-stage grants to accelerate the blended finance market
- Case studies on programs that leverage preparation-stage grants and design funding to build a pipeline of investable projects/funds/companies 
- Recommendations to practitioners on deploying these grants effectively 

Blended finance transactions can be complex, time intensive, and highly costly to structure and launch. Preparation grants support technical studies to prove a project’s viability. Design funding is used for feasibility studies, to assess the bankability of a transaction, or proof of concept, to complete design and structuring activities to launch a transaction. Both types of grants are instrumental in building the pipeline of investable opportunities.

This is the third seminar in our four-part seminar series “A Closer Look at Blended Finance Instruments". Even if you missed previous seminars, you are welcome to register.

*The training has limited space to ensure a personal, intensive and practice-driven learning experience. All participants will receive the presentation slides afterwards. We recommend that no more than two representatives from each organization attend.*


Blending with Design and Preparation-stage Grants (Asia/West Coast)

Blending with Design and Preparation-stage Grants is a 2.5-hour (150 minutes) interactive seminar in our four-part seminar series “A Closer Look at Blended Finance Instruments".

Blending with Design & Prep-stage Grants (Asia/West Coast)

__Tuesday, July 28th, 10am – 12:30pm EDT (GMT-4)__

Registration closed. This seminar is at full capacity.

---


Blending with Design and Preparation-stage Grants is a 2.5-hour (150 minutes) interactive seminar that will cover:
- How project preparation grants and design funding are used to mobilize additional private sector financing
- The potential of early-stage grants to accelerate the blended finance market
- Case studies on programs that leverage preparation-stage grants and design funding to build a pipeline of investable projects/funds/companies 
- Recommendations to practitioners on deploying these grants effectively 

Blended finance transactions can be complex, time intensive, and highly costly to structure and launch. Preparation grants support technical studies to prove a project’s viability. Design funding is used for feasibility studies, to assess the bankability of a transaction, or proof of concept, to complete design and structuring activities to launch a transaction. Both types of grants are instrumental in building the pipeline of investable opportunities.

This is the third seminar in our four-part seminar series “A Closer Look at Blended Finance Instruments". Even if you missed previous seminars, you are welcome to register.

*The training has limited space to ensure a personal, intensive and practice-driven learning experience. All participants will receive the presentation slides afterwards. We recommend that no more than two representatives from each organization attend.*


Blending with Design and Preparation-stage Grants (Europe/East Coast)

Blending with Design & Prep-stage Grants (Europe/East Coast)

__Thursday, June 11th 2020, 9am – 11:30am Singapore time (GMT +8):__

[Register](https://register.gotowebinar.com/register/6008452121213452816 "Register for the event")

---

Blending with Technical Assistance is a 2.5-hour (150 minutes) interactive seminar that will cover:

  - How Technical Assistance is used in blended finance transactions;
  - How Technical Assistance can de-risk investments and strengthen development impact;
  - Case studies and trend analysis on the use of Technical Assistance in blended finance transactions; and
  - Recommendations to practitioners on deploying Technical Assistance efficiently.

Technical Assistance is a versatile development tool that can be deployed to mobilize additional sources of finance for the Sustainable Development Goals (SDGs). The use of grant-funded technical assistance facilities can strengthen commercial viability and developmental impact. Technical Assistance can be vital to support project preparation, project implementation, and the broader business and policy environment.

This is the second seminar in our four-part seminar series “A Closer Look at Blended Finance Instruments". Even if you missed the first seminar (Blending with Guarantees) you are welcome to register.

*The training has limited space to ensure a personal, intensive and practice-driven learning experience. We recommend that no more than 2-3 representatives from each organization attend. Registration is complimentary for members, applying the __discount code__ you received via e-mail. Non-members can register for a fee of $150.*



Blending with Technical Assistance (West Coast/Asia)

Blending with Technical Assistance (West Coast/Asia) is the second seminar in our four-part seminar series “A Closer Look at Blended Finance Instruments".

__Registration closed. This seminar is at full capacity.__


---

Blending with Technical Assistance is a 2.5-hour (150 minutes) interactive seminar that will cover:

  - How Technical Assistance is used in blended finance transactions;
  - How Technical Assistance can de-risk investments and strengthen development impact;
  - Case studies and trend analysis on the use of Technical Assistance in blended finance transactions; and
  - Recommendations to practitioners on deploying Technical Assistance efficiently.

Technical Assistance is a versatile development tool that can be deployed to mobilize additional sources of finance for the Sustainable Development Goals (SDGs). The use of grant-funded technical assistance facilities can strengthen commercial viability and developmental impact. Technical Assistance can be vital to support project preparation, project implementation, and the broader business and policy environment.

This is the second seminar in our four-part seminar series “A Closer Look at Blended Finance Instruments". Even if you missed the first seminar (Blending with Guarantees) you are welcome to register.

*The training has limited space to ensure a personal, intensive and practice-driven learning experience. We recommend that no more than 2-3 representatives from each organization attend. Registration is complimentary for members, applying the __discount code__ you received via e-mail. Non-members can register for a fee of $150.*



Blending with Technical Assistance (America/Europe/Africa)

Blending with Technical Assistance (America/Europe/Africa) is the second seminar in our four-part seminar series “A Closer Look at Blended Finance Instruments".

The world is currently fighting the Covid-19 pandemic and its devastating humanitarian and economic impact. Countries are overwhelmed with the additional burden that the outbreak is imposing on public health systems and national budgets.

The effects of the global crisis will be long-lasting, but the crisis is also an opportunity. The shifts in the global financial system is a chance to set the world on track for a sustainable recovery, and ensure there is financing for sustainable development, for everyone. The private sector has an important role to play, in solid collaboration with the public sector.

The Global Investors for Sustainable Development, [GISD](https://url11.mailanyone.net/v1/?m=1jaYoU-0006pq-4T&i=57e1b682&c=_SN6osRAQuexVInTW4uP5YIr5IJwQ6FLtaKQ_pv8ra2za9D10FOmyQaGuLxd7MQX2voNG75CMRkJGUpcGE64BCK0H-LTNlAyNob2MTKIe5Tm6pXY71hXf6BQnAFNuJeCNcOyDrkh2BVxe1uRScxsYEqeeDmXHmVQ0eK12lx_nwIYxZbCGELRbZy0d4_fguHzU7JJJV2b93Mlqn6dQOHF4jsMETEe2xf56L7XMDzVkQcRc8gHxr_VrvZ4VYjaAIaCEYgxsuFnscggRTfKGPvhdO5eeeGTf2kfPzKawkvOcMEuPAOcJhLGq1IMTJd4dxM9gp9RV6HFa3Kq7P4LlDHHw0mCbMavcR6NjZslSdo0QvWKJATx2vC8RUNZ9ezpLbqFMcDvCyFJZdjQdIIy7Jn9D9-1iZ1w99XGgL_CD5HUsopAknTvAb76ujKVLt_qpwGouWSLHRiDi_SSQ2n-AcFS33jaNoHSsl7T9IXFqSAycquKuuw1bMifSX5xCgb8L58xTf0-Up6Zmn1vEofTjRUdrfgbVwjOS9psPk_YIlAh8gyNdu4xBe-d7WHNwFuACyjscISXq6bZi7B7ULPEIuqN53BNhtdQPHwmmMIPnMDTjueOTUhXTcikioGVxIi2aLZLKrxT9JqThLqK88yy6ZuZiyv5UIXS0vjW7zxOSa8o91vZpT95EpDsurOHsTuvfE8I), is an initiative launched by the UN Secretary-General in 2019, with inspiration from the Swedish alliance SISD (among others). In conjunction with their global digital GISD conference in Stockholm, Sida together with UN DESA is organizing a [global on-line conference](https://www.sida.se/Svenska/aktuellt-och-press/development-talks/inbjudningar/building-back-better/ "Building Back Better") on how to build back better from Covid-19 pandemic through long-term investment in sustainable development. This special Development Talks public session will explore the role of investors in scaling up long-term investment for a sustainable recovery. How can investors, development actors and the UN work together to support reaching the 2030 Agenda, in a post-pandemic world?

With 10 years left to the delivery of the 2030 Agenda with the Global Goals, we are entering a Decade of Action to step up the efforts. Welcome to a virtual call to action, with finance and development leaders in joint action for a more equitable and sustainable world. 

Live stream: [https://www.youtube.com/watch?v=vqyw5W16JEk&feature=youtu.be](https://www.youtube.com/watch?v=vqyw5W16JEk&feature=youtu.be)

Building back better - Finance and development leaders in joint action

In conjunction with their global digital GISD conference in Stockholm, Sida together with UN DESA is organizing a global on-line conference on how to build back better from Covid-19 pandemic through long-term investment in sustainable development. This special Development Talks public session will explore the role of investors in scaling up long-term investment for a sustainable recovery. How can investors, development actors and the UN work together to support reaching the 2030 Agenda, in a post-pandemic world?

Building back better - SIDA together with UN DESA

Blending with Guarantees is a 2.5-hour (150 minutes) interactive seminar that will cover:
- how guarantees are used in blended finance transactions;
- the issues that impact the effectiveness of this financial instrument; 
- case studies and comparisons on the use of guarantees, and 
- recommendations to practitioners on deploying guarantees efficiently. 

The development community utilizes various financing tools, ranging from grants, equity investments and loans, to guarantees and insurance products. Through guarantees on below-market terms, public or philanthropic investors provide credit enhancement to commercial investors. Guarantees offer a compelling opportunity to mobilize private sector investment towards SDG-aligned projects in emerging and frontier markets.

This is the first seminar in our four-part seminar series “A Closer Look at Blended Finance Instruments".

*The training has limited space to ensure a personal, intensive and practice-driven learning experience. We recommend that no more than 2-3 representatives from each organization attend. Registration is complimentary for members. Non-members can register for a fee of $150. *


Blending with Guarantees (Asia time)

Blending with Guarantees (Asia time) is the first seminar in our four-part seminar series “A Closer Look at Blended Finance Instruments".

Blending with Guarantees (America/Europe time)

Blending with Guarantees (America/Europe time) is the first seminar in our four-part seminar series “A Closer Look at Blended Finance Instruments".

Convergence logo official

__Tuesday, May 12th, 10:00am to 11:30pm EST (GMT-4):
__

[Register](https://attendee.gotowebinar.com/register/6683764466012109580 "Register for the event")

---

Convergence and the DFID Impact Programme are pleased to co-host a webinar on Mobilizing Private Investment at Scale in Blended Finance. 

During this 90-minute webinar, participants can expect to hear key findings from Convergence’s latest report, How to Mobilize Private Investment At Scale in Blended Finance, based on consultations with over 20 leading private investors, including commercial banks, asset managers, and institutional investors. Convergence will also cover key trends in private investment in blended finance, top recommendations from investors for scaling blended finance, and case examples of effective blended finance vehicles for mobilizing private investment.

We are excited to welcome Moody’s to this session to discuss their recent report on the use of credit enhancement in blended finance and guest perspectives from the private sector (details forthcoming).

The webinar is designed for the 360 degrees of stakeholders in blended finance, including organizations in developing countries, private investors, fund managers, development agencies and philanthropic foundations.

Mobilizing Private Investment at Scale in Blended Finance

Convergence shares insights and key findings from its latest research report, [How to Mobilize Private Investment At Scale in Blended Finance](https://www.convergence.finance/resource/3cpgfofIUn2QY8rFEV2IFt/view), based on consultations with over 20 leading private investors

Join this webinar with Pierre Rousseau, Strategic Advisor on Sustainable Business, BNP Paribas to learn how the company had a pivotal role in the landmark US$95m Sustainability Bond issued by the [Tropical Landscapes Finance Facility (TLFF)](https://www.convergence.finance/resource/4tO5LULlfeb6QJroKuVHJ1/view "TLFF Inaugural transaction: Corporate sustainability bond for natural rubber production"). The multi-tranche senior secured fixed rate Sustainability Bond will fund PT Royal Lestari Utama (RLU). This joint venture between France's Michelin and Indonesia's Barito Pacific Group, fosters the climate-smart, wildlife-friendly and socially inclusive production of natural rubber on heavily degraded land in Indonesia.

Collaborative Blended Finance Solutions: BNP Paribas in Indonesia

Join this webinar with Pierre Rousseau, Strategic Advisor on Sustainable Business, BNP Paribas to learn how the company had a pivotal role in the landmark US$95m Sustainability Bond issued by the Tropical Landscapes Finance Facility (TLFF).

Collaborative Blended Finance Solutions: BNP Paribas

Continuing our gender lens investing series, learn from other practitioners on how you can invest to address inequalities. The 2X Challenge calls for the G7 and development finance institutions to collectively mobilize $3B USD to invest for women in emerging and frontier economies. The aim of this funding is to provide women with improved access to leadership opportunities, quality employment, finance, enterprise support and products and services that enhance economic participation and access. The webinar will feature an update of the 2X Challenge's achievements by FinDev Canada and case studies by Proparco , FMO, and EIB.

Moderator: Anne-Marie Levesque, Head Gender & Impact, FinDev Canada & Chair, 2X Challenge Working Group

Panelists:

Marion Calloch - Technical Assistance Officer, Proparco

Nicholas Nzioka - Senior Project Officer, European Investment Bank

Corianne van Veen - Sustainable Finance Officer, FMO

CAFIID Webinar “2X Challenge”

Demystifying Blended Finance is a 3-hour interactive workshop designed to offer members and partners a comprehensive understanding of how blended finance can mobilize higher levels of capital for projects in developing counties. The workshop will offer a brief overview of blended finance and trends across the ecosystem, along with a deeper understanding of the financial rationale for using blended finance; and reviewing practical applications of how blended finance structures have been used to capitalize projects in emerging and frontier markets.

The training has limited space to ensure a personal, intensive and practice-driven learning experience. __We recommend that no more than 1-2 representatives from each organization attend.__

Virtual Learning Seminars: Demystifying Blended Finance

Demystifying Blended Finance is a 3-hour interactive workshop designed to offer members and partners a comprehensive understanding of how blended finance can mobilize higher levels of capital for projects in developing counties.

As blended finance is increasingly adopted as a tool amongst the development community to help realize the Sustainable Development Goals (SDGs), important questions are being raised regarding the need for increased transparency and availability of impact outcomes from blended finance structures. 

On July 16th, Convergence, The IMPACT Programme and the Organisation for Economic Co-operation and Development (OECD) co-hosted an online event on “Leveraging Blended Finance for Development Impact” for non-profits, non-governmental organizations (NGOs) and other civil society organizations, with support from the UK Department for International Development (DFID), to discuss the role of blended finance in driving development impact, alongside important policy developments in the field. Below are some of the key questions and perspectives: 


## 1. What impact does blended finance achieve, and how is it measured?

 

As Convergence has previously stated, blended finance creates impact, broadly, on two levels: i) the impact of development activities financed by a blended finance structure, and ii) the impact of deploying a blended finance approach. Key metrics to assess the latter include i) mobilization (e.g., amount of financing unlocked for the SDGs), ii) sustainability (e.g., reducing the share of concessional capital over time, iii) replication (e.g., demonstrating viability of new markets), and iv) financial additionality (e.g., providing new sources of financing where investments are not yet available). 

Based on Convergence’s [earlier analysis on leverage ratios](https://www.convergence.finance/news-and-events/news/32YlzPV7lKaCSuEwSoYAua/view "Convergence | New Data Brief: How much commercial capital does concessional capital leverage?"), blended finance funds or fund-like structures have attracted US $4 of commercial capital for every US $1 of concessional capital (i.e., priced below market rate). While understanding the effectiveness and efficiency of a blended finance approach are key, the first consideration is crucial, particularly for the donor community: 


## 2. When it comes to blended finance, who benefits, how, and when? 

 

While blended finance is not a panacea for achieving the SDGs, it can be used to support a broad range of development activities. [According to Convergence’s analysis](https://www.convergence.finance/resource/3XJibIsItUipKjcOlLfam0/view "Convergence | Data Brief: Measuring Impact in Blended Finance"), to date, blended finance has focused on financial inclusion (46% of transactions), small and medium-sized enterprise (SME) growth (44% of transactions), with other common objectives including clean energy, sustainable agriculture, and land-use. The most common direct beneficiaries have been entrepreneurs and SMEs (45% of transactions), while the majority (73%) of end-beneficiaries reflect the base of the pyramid (BOP) populations – the poorest socio-economic group. This suggests that blended finance is a reasonable approach in financing development projects reaching low-income and vulnerable populations. 

## Efforts to standardize impact and improve transparency of blended finance are underway

 

Currently, the lack of transparency in development impact outcomes can make it more challenging for some policymakers and development practitioners to fully endorse the use of blended finance. 

The good news is blended finance is gaining traction as an alternative financing approach to achieve development at scale, as is the focus to improve the impact measurement and transparency of these transactions. To this end, the OECD has been leading policy efforts in the blended finance market. 

First, the OECD is currently preparing its Development Assistance Committee (DAC) Blended Finance Principles Guidance Notes, which provide practical guidance on implementing the [OECD DAC Blended Finance Principles](https://www.convergence.finance/resource/2znGyIv7YMQyUQ2oCWQOUI/view "OECD DAC Blended Finance Principles for Unlocking Commercial Finance for the SDGs"). Adopted in 2017, the OECD DAC Blended Finance Principles a policy tool for all providers of development finance - donor governments, development co-operation agencies, philanthropies and other concerned stakeholders. The OCED DAC Blended Finance provide a five-point checklist to ensure blended finance meets accepted standards and achieves impact promoted by DAC members, including Principle 5 “Monitor blended finance for transparency and results.” The guidance notes build on extensive consultations with donors, Development Finance Institutions, private investors, partner countries, and the DAC-CSO Reference Group, and is an important step in moving from principles to practice. 

In addition, the OECD is also leading efforts to support greater transparency and impact measurement in blended finance through the [Tri Hita Karana (THK) Roadmap on Blended Finance](https://www.oecd.org/dac/financing-sustainable-development/development-finance-topics/tri-hita-karana-roadmap-for-blended-finance.htm "Tri Hita Karana Roadmap for Blended Finance"). The THK seeks to foster a common language and collective action to deliver financing to support the SDGs, and is composed of five actions areas, including i) promoting transparency (see draft report by Transparency Working Group [here](https://www.convergence.finance/resource/4TdOQkT6IMnVvf9wqZFNV/view "Convergence | Report on THK Roadmap on Blended Finance: Promoting Transparency in Blended Finance")), and ii) impact (see report on Assessing Impact for the Poor by Impact Working Group [here](https://www.convergence.finance/resource/2aJpvJCc7Q5SubVL1lhQhX/view "Convergence | THK Roadmap for Blended Finance: A Checklist for Assessing the Impact of Blended Finance on the Poor")). To read more on the THK Agenda and its specific action areas, please visit the [THK Knowledge Hub](https://www.convergence.finance/resource "Convergence | Resource Library"), hosted by Convergence, with support from the Swedish International Development Cooperation Agency (Sida). 

Lastly, the OECD also shared updates on its current work on the Impact Standards for Financing Sustainable Development (referred to as IS-FSD), a set of standards for impact management to help public donors keep a high level of accountability on development impact when working through development finance institutions and private fund managers. The standards are currently undergoing a consultation process, and the latest version will be presented to the DAC In September.


## Blended finance can be a tool for humanitarian action

 

With guest Juan Luis Coderque Galligo, Head of New Finance Models (NFM) and Innovative Finance at the International Committee of the Red Cross (ICRC), participants learned how this international humanitarian aid organization is exploring new financing models to complement traditional sources of financing for humanitarian action, recognizing the growing gap between the landscape of need and available funding. 

In 2017, the ICRC created the [world’s first HIB](https://www.icrc.org/en/document/worlds-first-humanitarian-impact-bond-launched-transform-financing-aid-conflict-hit "The world’s first “Humanitarian Impact Bond” launched to transform financing of aid in conflict-hit countries") (“humanitarian impact bond”), which raises funds to build and run three new physical rehabilitation centre in conflict and post-conflict countries, namely Nigeria, Mali and the Democratic Republic of Congo. The ICRC has raised CHF (Swiss Franc) 26 million in upfront funding from impact investors, including New Re (part of Munich Re Group), who will be reimbursed by outcome funders, including the governments of Belgium, Switzerland, Italy, the UK, and La Caixa Foundation, following the achievement of agreed results. 

The ICRC is currently working on other financing projects, including a public-private infrastructure project in Goma, to implement and design a water-supply project. The ICRC aims to generate at least 5% of its income from NFM by 2030.

__To read more about impact in blended finance, please visit our [Resource Library](https://www.convergence.finance/resource "Convergence | Resource Library"). For more information on upcoming events and virtual trainings, contact us at comms@convergence.finance. __

In July, Convergence and partners co-hosted a webinar on “Leveraging Blended Finance for Development Impact” for non-profits, NGOs and other CSOs with support from DFID to discuss the role of blended finance in driving development impact.

Leveraging Blended Finance for Development Impact Highlights

Highlights from Leveraging Blended Finance for Development Impact Webinar

Convergence was recently selected to support the UN Joint SDG Fund as an independent evaluator and advisor to advance over 150 proposed SDG Financing interventions put forth by representatives from over 100 UN Country Teams, in conjunction with relevant UN agencies. 

Over the last few months, Convergence has worked with the UN Joint SDG Fund in operationalizing the [Call on SDG Financing Component 2: Catalyzing Strategic Investments](https://www.jointsdgfund.org/sdg-financing "Call on SDG Financing Component 2: Catalyzing Strategic Investments") to identify the highest potential proposals for investment. Through this initiative, the Joint SDG Fund will provide funding to support the development of solutions that facilitate public and private investments towards the 2030 SDG Agenda and its 17 goals. 

The partnership with the Joint SDG Fund in catalyzing SDG financing forms part of Convergence’s broader market acceleration strategy. Convergence has identified that there is currently an insufficient amount of support available for teams developing, and taking to market, investment products aligned to the SDGs. We see our role in helping the Joint SDG Fund select and fund investible solutions led by UN Country Teams as one way to accelerate additional capital from the public and private sector into sustainable finance. Convergence’s [Design Funding Program](https://www.convergence.finance/design-funding "Convergence | Design Funding Program") offers another unique market acceleration opportunity for practitioners to secure feasibility study and proof of concept stage design funding to develop and launch catalytic blended finance vehicles that aim to attract private capital to sustainable development at scale.

As the global network for blended finance, we are happy to provide our expertise and knowledge to the Joint SDG Fund, and look forward to sharing more details as this partnership progresses. The Joint SDG Fund will soon announce the results of the selection of shortlisted proposals for Component 2: Catalyzing Strategic Investments. In the meantime, [learn more](https://www.jointsdgfund.org/sdg-financing "UN Joint SDG Fund") about the UN’s Joint SDG Fund’s recently announced USD 60 million grant for Component 1: Reinforcing the SDG Financing Architecture.

Convergence supports the UN Joint SDG Fund to Catalyze SDG Financing

Convergence supports UN Joint SDG Fund

At Convergence, we keep our pulse on new literature to add to our [Resource Library](https://www.convergence.finance/resource "Convergence | Resource Library"). Over the past 2 months, we have seen many new reports on gender and blended finance. Here, we are sharing our takeaways from the new research, and our perspective on what it means for blended finance:

## #1 There is progress towards industry standards for gender-related impact measurement 

 

Previously, Convergence shared why [impact measurement](https://www.convergence.finance/news-and-events/news/LM3hOb8pHaWX05oNGjPVu/view) in blended finance can be challenging. Measuring and monitoring the impact of investments on gender quality and women’s economic empowerment is an even trickier affair. The newly published Gender Equality Scorecard© Manual and the 2XChallenge Indicator Guidance Note underscore the ongoing effort to harmonize different metrics. 

__Gender Equality Scorecard© Manual__

Developed by Convergence Member, the Small Enterprise Assistance Funds (SEAF), the [Gender Equality Scorecard©](https://www.convergence.finance/resource/1txrBxMyIPDhSEWgoSBdVT/view "Gender Equality Scorecard©") (GES©) focuses on integrating a gender-lens in growth-oriented small and medium-sized enterprises (SMEs). The GES© provides an overall rating score for a company based on six gender equality performance vectors: 
1. pay equity 
2. women’s workforce participation
3. gender diverse leadership and governance
4. benefits and professional development
5. safe and healthy workplace environment, and 
6. women-powered value chains. 

The score for each of these six vectors is produced through the evaluation of four distinct parameters. The newly released [GES© Manual](https://www.convergence.finance/resource/7ye261vY9L4rC37bsASX1z/view "GES© Manual") describes how to score each gender equality vector consistently, and aligns the GES© indicators with the widely used [IRIS+](https://iris.thegiin.org/metrics/ "The GIIN| IRIS Metrics") gender impact metrics. 

Given that small and medium-sized enterprise (SME) finance is a frequent sub-sector for blended finance transactions, accounting for 25% of all transactions in financial services – in fact SEAF itself has a long history of using blended finance in its operations – the GES© Manual could be a useful resource for many in the blended finance community. 

__2X Challenge Indicator Guidance Note__

The newly released guidance note, “[How to measure the gender impact of investments](https://www.convergence.finance/resource/3LnbRNNKGrs8uw0VaBKLyr/view "How to measure the gender impact of investments"),” also showcases the ongoing coordination efforts in the gender lens investing field. Jointly published by CDC (UK's development finance institution), the GIIN and the 2X Challenge, it gives detailed guidance on the application of the 2X Challenge indicators to various investment activities, including to financial institutions and funds. 

To understand how investors can apply 2X Challenge indicators to different investment activities, imagine a Development Finance Institution (DFI) that lends to a financial intermediary which, in turn, lends to SMEs. In this case, the DFI may struggle to identify at what level to apply gender indicators–should the focus be on the financial intermediary, the SME itself, or both? As the guidance note highlights, the 2X Challenge indicators apply differently to financial institutions depending on the type of investment product provided, and whether this involves directed lending to financial intermediaries with a defined use of proceeds. For example, for equity or debt investments involving non-directed lending (e.g. tier 2 or senior debt), the DFI should apply 2X Challenge indicators 1-4 as follows:

Figure 2: 2X Challenge indicators applied to non-directed lending to a financial institution (FI)

![Picture1](//images.ctfassets.net/4cgqlwde6qy0/fOpjpglUBaXrWPHn2uTbv/077811a666c9c1a748e7abc53266b3f0/Picture1.png)


Source: CDC, the GIIN, and the 2X Challenge (2020) “How to measure the gender impact of investments”
 

 

Although the blended finance market remains far from gender mainstreaming, these are noteworthy strides towards standardized impact metrics and higher quality gender-related impact data.

## #2 Gender risks are inherent in infrastructure projects

 

Criterion Institute’s [new paper](https://www.convergence.finance/resource/3ZAgSVJb1pVm1PbgTMorfC/view "Gender as Material to Infrastructure Projects: Reaching Better Outcomes by Applying a Gender Lens from Project Inception") “Gender as Material to Infrastructure Projects: Reaching Better Outcomes by Applying a Gender Lens from Project Inception” analyzes gender-related risks throughout an infrastructure project’s lifecycle. Like every sector of the economy, infrastructure can have broad implications for advancing progress or entrenching gender concerns. The authors argue for incorporating a gender lens at the earliest stage of project inception and design to reduce risk across the project lifecycle. They further argue that the current discussion on incorporating a gender lens in infrastructure needs to move beyond: 
1. minimum compliance standards and a ‘do no harm’ approach to the intentional creation of a positive impact on women and girls; and 
2. the focus on efficiency when considering a gender lens in infrastructure to the recognition of gender equality and women’s empowerment as goals in and of themselves.

The paper touches on the opportunity for blended finance to advance this agenda. Blended finance transactions involve impact-driven organizations (e.g. public agencies, philanthropic foundations, impact investors, etc.) These often bring up considerations of gender-related risks and opportunities to other investors, which can eventually lead more investors to adopt a gender lens from the earliest stage of project development. 

## #3	It’s time to sharpen the gender lens to consider LGBTQI individuals

 

In an [earlier blog post](https://www.convergence.finance/news-and-events/news/3q7aGC3DBXf5KiRRDBErYO/view "Convergence | Assessing Gender Lens Investing in Blended Finance"), we acknowledged the need to move beyond the gender binary. A new report by Criterion Institute, supported by Dreilinden gGmbH, argues that investment can be a tool to address inequities faced by lesbian, gay, bisexual, transgender, queer, and intersex (LGBTQI) individuals. “[Investing with an LGBTQI lens: Rethinking Gender Analysis Across Investment Fields](https://www.convergence.finance/resource/76LKQgvu9fWYgHAFLR8KnC/view "Investing with an LGBTQI lens - Rethinking Gender Analysis Across Investing Fields")” outlines how to engage with managers and advisors to shape their practices and shift power dynamics in the transaction structure and terms. It points out that asset owners have the privilege of defining the terms on which they will move capital, and that “Investors have the power to embed an LGBTQI lens within terms, structures, and agreements to meet these individuals’ specific needs.” 
The report further notes that adding questions about diversity, equity, and inclusion into due diligence processes “not only removes biases from the investment process and helps to unearth hidden opportunities, but also signals to existing and potential portfolio companies that these issues are important to asset holders.” Although the market for non-binary investment strategies is still nascent, this report will contribute to its growth. 

## #4	Gender lens investing is on the rise

 

“[Project Sage 3.0](https://socialimpact.wharton.upenn.edu/research-reports/reports-2/project-sage-3/?utm_source=ImpactAlpha&utm_campaign=0c3ca2d084-EMAIL_CAMPAIGN_2019_08_20_12_35_COPY_01&utm_medium=email&utm_term=0_57980c6bda-0c3ca2d084-105978721&mc_cid=0c3ca2d084&mc_eid=19bcc9d316 "Project Sage 3.0"),” which the Wharton Social Impact Initiative and Catalyst at Large published in July, reveals that the market for gender-lens funds is growing rapidly. The report outlines the current activity of private equity, venture capital, and private debt vehicles operating with a gender lens. It finds that the total capital raise (among the firms that permitted the research team to publish the amount raised) was approximately USD 4.8 billion. This figure is more than double from the USD 2.2 billion figured they reported in 2019. The vehicles listed in the report include many blended finance transactions such as the Capital 4 Development Asia Fund, Women’s World Banking, SME.NG, RENEW, GroFin, Global Partnerships, Educate Global, and Ilu Women’s Empowerment Fund.

While this global summary is tremendously helpful, regional landscape reports provide more granular information. For example, the Sasakawa Peace Foundation, Catalyst at Large & SAGANA recently released [Gender Lens Investing Landscape – East and Southeast Asia](https://www.spf.org/en/gender/publications/gliasialandscape.html?utm_source=Gender-Smart+Email+List&utm_campaign=a849e9123c-EMAIL_CAMPAIGN_2020_05_10_01_18_COPY_01&utm_medium=email&utm_term=0_3d5bc23cf2-a849e9123c-201070304 "Report | Gender Lens Investing Landscape – East and Southeast Asia"). It highlights the important role of de-risking mechanisms – both for shifting perceived and real risks – and features blended finance transactions such as the [Japan ASEAN Women Empowerment Fund (JAWEF)](https://www.convergence.finance/resource/5AR5njuJR45khZMkblhjOa/view "Convergence | JAWEF Case Study"), and the Women’s Livelihood Bond 2.

__For more of the latest research on blended finance, visit our [Resource Library](https://www.convergence.finance/resource "Convergence | Resource Library").__

*This blog post, contributed by [Regina Rossmann](https://www.convergence.finance/about/team/2N51act2guAEEIJeAtzFFD "Convergence | Regina Rossman"), is part of a new series that will look at gender in the blended finance market, including key opportunities and challenges for achieving, measuring, and bolstering gender equality in blended finance transactions. Blogs in this series include:*
- [Assessing Gender Lens Investing in Blended Finance](https://www.convergence.finance/news-and-events/news/3q7aGC3DBXf5KiRRDBErYO/view "Convergence | Assessing Gender Lens Investing in Blended Finance")
- [Advancing Gender Equality through the Indo-Pacific Design Funding Window](https://www.convergence.finance/news-and-events/news/1UKrPaHdFgV23AQBtghfUW/view "Convergence | Advancing Gender Equality through the Indo-Pacific Design Funding Window")

Over the past two months, we have seen many new reports on gender and blended finance. Here, we are sharing our takeaways from the new research, and our perspective on what it means for blended finance.

What current reports tell us about Gender & Blended Finance

What are current reports telling us about gender and blended finance?

RS Group is a Hong Kong-based family office that fosters multi-sector collaboration and investment in for-profit businesses, social enterprises, not-for-profit organizations and initiatives, to advance human development and environmental sustainability in Asia. In 2019, in addition to becoming a Convergence member, RS Group also funded the [Asia Natural Capital Design Funding Window](https://www.convergence.finance/design-funding/open-window/asia-natural-capital-open-window "Convergence | Asia Natural Capital Design Funding Window"), managed by Convergence, to demonstrate how flexible capital can help boost investable deals for nature-based solutions.

As the family office accelerates its efforts to advance nature-based solutions in mitigating climate change in the region, Convergence connected with Ronie Mak, Managing Director at [RS Group](http://www.rsgroup.asia/ "RS Group"), to learn more about their experience in blended finance and their efforts to bring capital to projects aiming to protect the planet’s natural resources.

 

## How has RS Group approached building a sustainable portfolio? 

 

RS Group’s return objectives are more on a needs basis rather than market driven. We calculate the financial return we need to meet our grant and operational objectives, and our principal’s personal needs. Then, based on that, we ask ourselves, “Is that an appropriate level of financial return for this capital strategy, and are we aligned to meet our targeted needs?” 



In 2016, we launched an [Impact Report](http://report.rsgroup.asia/ "RS Group | Impact Report") to share our journey in building a 100% sustainable investing portfolio. This report shares why we chose a [total portfolio approach](http://report.rsgroup.asia/total-portfolio-management-approach/ "RS Group | Total Portfolio Approach")—managing the investment and philanthropic capital in our portfolio as a whole—how we went about it, what we learned, and what advice we have for others. For us, it took about 5 years to transition from a traditional portfolio in 2010, into one that is 100% sustainably invested across asset classes by 2015.

 

## Can you tell us why the RS Group finds blended finance to be a compelling approach?

 

We know that in order to solve the world’s biggest problems, philanthropy alone is not enough. The power of capital markets must be harnessed. This thinking is what drives our total portfolio approach, rooted in the concept of blended value–investing through a values-based lens to create environmental value, social value and financial value–and our flexible deployment of capital (i.e. the use of the right type or mix of capital for the given situation to generate the intended impact, whether it’s grant, concessionary, or for-profit capital.)



Blended finance is therefore well-aligned with this spirit. Especially in frontier or emerging markets, or in sectors that are perceived to have higher risks and/or lower returns, we see blended finance as an important approach to channel private and commercial capital to SDG-aligned projects. The development and impact community for years have talked about the importance of public private partnerships (PPPs). Blended finance exists in the same vein. When it comes to climate change and specifically nature-based solutions, the need for blended finance, and the role we can play to provide the catalytic capital needed to attract mainstream capital, is critical. 

 

## What contributes to RS Group’s risk appetite and ability to create additional investment opportunity? 

 

Our total portfolio approach has truly allowed us to take higher risks in some parts of our portfolio (e.g. in the direct investment space or private equity space), because we can balance the risk out by safer investments, in say the listed fixed income or listed equity space, where risk is generally lower and returns relatively more stable. Currently, we are also in an accelerated capital deployment phase given the current climate crisis and are expediting our capital to be invested flexibly across various programs. This mainly includes grant and concessionary type capital; typically, with higher risk appetite, and intended for deeper impact.

 

## What are some lessons and insights gained over the years, including from the Sustainable Finance Initiative?

 

When we began our work, sustainable investing was not really talked about in Asia. However, as we continued to share our work and demonstrate a demand for sustainable investments, we began to see a gradual uptick in interest from fellow asset owners to explore sustainable investments, talk of ESG inclusion into regulations, and offerings of sustainable products in the region. 

However, in launching our impact report, we realized one report from one family office was far from enough. To effectively help our peers mobilize their capital, much more was required, and that is what drove RS Group to incubate the [Sustainable Finance Initiative (SFi)](http://sustainablefinance.hk/ "Sustainable Finance Initiative (SFi)"), to mobilize capital for positive impact, and accelerate Asia’s transition towards a sustainable finance hub. Today, SFi has been spun off from RS Group as a separate legal entity and now acts as a community-based platform for private investors to learn, connect and co-invest. Through its four pillars of empowering people, policy, practice and product, SFi’s vision is to create a sustainable finance hub for Hong Kong/Asia. 

 

## What were RS Group’s motivations behind funding the Asia Natural Capital Window, and how does this decision align within the company’s broader efforts?

 

[The Asia Natural Capital Design Funding Window](https://www.convergence.finance/design-funding/open-window/asia-natural-capital-open-window "Convergence | Asia Natural Capital Design Funding Window") is part of RS Group’s broader natural capital initiative around climate change, given the role of nature-based solutions in reducing greenhouse gases and mitigating climate change. Nature-based solutions account for 10 of the top 20 most effective emissions reduction solutions to achieve climate [drawdowns](https://drawdown.org/drawdown-framework "Drawdown Framework")—the future point when greenhouse gases in the atmosphere stop climbing and start to steadily decline.

Funding the Asia Natural Capital Design Funding Window is the first intentional step we have taken as part of our natural capital initiative. Since we are new to blended finance, we looked for a partner that was experienced in this field, with the expertise, knowledge and capabilities to develop such a window. By partnering with Convergence, we have been able to reach a broader audience and find opportunities more systemically, allowing us to be more catalytic and impactful with our limited amount of capital. Even in the face of the COVID-19 pandemic, our partnership with Convergence kept the Window moving forward; with the [recent awarding](https://www.convergence.finance/news-and-events/news/T4xobb50bNeWzQ2WrO7tZ/view "Blue Finance and Ocean Outcomes Become First Grant Recipients of Convergence’s Asia Natural Capital Window") of its first design-stage grants, targeting SDG 14–Life below Water, to Blue Finance and Ocean Outcomes

__We would love others to join us, as we must have all hands on deck if we are to succeed in protecting natural capital in Asia. __The gap is enormous, and we can all play a role in catalyzing more capital into the sector to fight the climate crisis. 

 

## What insights do you have for other family offices interested in entering the blended finance space?

 

We are still very new to blended finance. Our partnership with Convergence is reaching its half year mark, so we are still learning. With that said, here are some thoughts: 


__1. Blend for the right reasons; blend responsibly:__ Blended finance structures can be complicated, costly and timely, so avoid blending structures that are there simply to make an investment more attractive. Ensure the blended structure is there for the right reason and would have otherwise not been viable. 

__2. Be clear on your position within the blended finance structure:__ Blended finance can have many different layers. Know which type of capital, and what role it plays within the structure, and ensure that it fits within your investment mandate, amidst your own risk return appetite and impact intentions. 

__3. Leverage the power of private capital:__ Whilst it may be more attractive to go in on the safer tranches within a blended finance structure, one should keep in mind the unique role that a private investor can play in concessionary type capital structures. For RS Group, we are fortunate to be able to be flexible in our capital allocation, allowing us to provide concessionary capital (e.g. grant capital, design funding window, subordinated debt, etc.) to support impactful projects that require such investments. Concessional capital can be hugely catalytic in blended structures, as it triggers larger amounts of capital and attracts private investors through demonstration.

 

## Looking ahead, where does RS Group see the greatest opportunity for blended finance to advance nature-based solutions in the region?

 

Currently, only a limited number of natural capital projects meet the return requirements and risk appetite of commercial investors in Asia, largely because of how undervalued these ecosystem services remain, and a lack of supportive policies and regulations in the region. We see blended finance structures not merely as an investment option, but as a critical enabler in attracting private capital in nature-based solutions in Asia. Given the early stage of development, we believe more design funding and early-stage concessionary capital is essential to develop the field. 

We remain committed to build a more credible and viable pipeline for nature-based solution projects in Asia. Whether that means developing more incubator facilities, more venture-builders in Asia, or supporting certain fund managers willing to take on more risk and come in at the early-stage to invest in nature-based ventures, we are still figuring it out. We are in the process of identifying where our expertise and capital would work best and look forward to creating more successful partnerships and initiatives down the road. We have no time to waste as the climate crisis is here. We hope more members of the Convergence network will join us on this journey. 

*[The Asia Natural Capital Design Funding Window](https://www.convergence.finance/design-funding/open-window/asia-natural-capital-open-window "Convergence | Asia Natural Capital Design Funding Window") is open to co-funding. Organizations interested in supporting this window and the design and launch of new blended finance vehicles that aim to catalyze private investment for natural capital are encouraged to contact Convergence at: design.funding@convergence.finance. *

Convergence connected with Ronie Mak, Managing Director at RS Group, to learn more about their experience in blended finance and their efforts to bring capital to projects aiming to protect the planet’s natural resources.

Member Spotlight with Ronie Mak from RS Group

Advancing gender equality is key to achieving the Sustainable Development Goals (SDGs). Through market acceleration, Convergence is committed to provide support to practitioners designing bankable investment structures for building the market, and ultimately catalyzing additional investment to meet __SDG 5–Achieve gender equality and empower all women and girls__.

Earlier in May, Convergence [expanded](https://www.convergence.finance/news-and-events/news/LZqbniwrKBrxQV6hPZWHk/view "Convergence and The Government of Australia Expand Scope of the Indo-Pacific Design Funding Window to Include Gender Equality as a Focus Area") the focus areas of the [Indo-Pacific Design Funding Window](https://www.convergence.finance/design-funding/open-window/indo-pacific-open-window "Indo-Pacific Design Funding Window"), sponsored by the Australian Government, to include gender equality, in addition to resilient and sustainable infrastructure, to accelerate the number of blended transactions in the Indo-Pacific region that aim to make a significant contribution to gender equality outcomes for women and girls. 

## The Why

Based on Convergence data, 24% of blended finance deals align with SDG 5, and 42% of these deals have integrated a comprehensive gender-lens methodology, with a focus on empowering women. The majority (58%) of gender related deals focus partially on gender, with the goal of tracking and monitoring the number of women reached (e.g., by collecting gender-disaggregated metrics). So, we know a minority of gender related deals have a comprehensive *gender focus*, whereas a majority have adopted some aspect of a *gender lens* in their methodology. 

When zooming in on the Indo-Pacific region, we see a steady flow of gender related transactions in recent years, following an uptick in 2013. Based on Convergence’s Historical Deals Database, most of the gender related transactions have focused on microfinance, energy and infrastructure, with Cambodia, Philippines and Indonesia being the most frequently targeted countries. The public sector has emerged as a key financier of blended finance transactions in this region, by participating in more than half of the transactions. A sizeable proportion of these investors are multilateral development banks and development finance institutions. At Convergence, we see an opportunity to drive additional private sector investment in this space.

## The How

Specific to the Indo-Pacific Design Funding Window, Convergence seeks proposals focused on gender equality that are either directly benefiting women and/or provide improved access to, and control over, resources and capital for women and girls. Intended outcomes can be qualitative or quantitative in nature, so long as they are explicitly stated and supported in reason and strategic planning. 

If you consider applying to this Design Funding Window, consider the following questions to help determine the robustness of your proposal: 
- How are potential risks and opportunities related to gender assessed? 
- How will a gender analysis be conducted? What factors will be considered in the gender analysis?
- How will a gender action plan be formulated and implemented?
- What tools or metrics would be used/developed to assess gender outcomes? 
- What are the internal implications of applying a gender lens?

Across all applications, Convergence assesses how gender is considered in the design of the financing structure, the implementation plan, and the monitoring and evaluation. Convergence incorporates a gender lens across the evaluation and selection processes and runs through several considerations when determining the strength of a design funding application. 

As an example, the first grant award under the Indo-Pacific Window was for the design of the Local Utility Project Aggregator by [Allotrope Partners](https://www.convergence.finance/news-and-events/news/2p85wKhuWkS7JGgGs09e9g/view "Convergence Awards Allotrope Partners Feasibility Grant through Indo-Pacific Design Funding Window"), an international clean energy advisory firm specializing in emerging markets and technologies, that committed to leverage its relationships with investors, developers and public officials, to engage with a range of local stakeholders, and conduct a social gender analysis to ensure effective and equitable implementation, throughout the design process of its clean energy vehicle. 

We also have a list of available [resources](https://www.convergence.finance/resource "Convergence | Resource Library") to support you as you think about applying a gender lens to a blended finance vehicle. You can find more information about our eligibility criteria, evaluation criteria and application process for the Indo-Pacific Design Funding Window [__here__](https://www.convergence.finance/design-funding/open-window/indo-pacific-open-window "Convergence | Indo-Pacific Design Funding Window"). 

__The next application deadline is August 10, 2020. If you have questions about whether your financing structure has a sufficient focus on gender equality, fill in this [questionnaire](https://www.convergence.finance/design-funding/open-window/application "Convergence | Indo-Pacific Design Funding Window") and reach out to design.funding@convergence.finance. __

*This blog post, contributed by [Adhiti Gupta](https://www.convergence.finance/about/team/3f9TCaaBW1x33qJ4rUvmhB "Adhiti Gupta Manager | Market Acceleration and Design Funding") and [Adi Vashist](https://www.convergence.finance/about/team/7E31Xm8Aa6twslG5szdgax "Adi Vashist | Senior Associate, Market Acceleration and Design Funding") is part of a new series that will look at [gender in the blended finance market](https://www.convergence.finance/news-and-events/news/3q7aGC3DBXf5KiRRDBErYO/view "Convergence | Assessing Gender Lens Investing in Blended Finance"), including key opportunities and challenges for achieving, measuring, and bolstering gender equality in blended finance transactions.*


Through market acceleration, Convergence is providing support to practitioners designing bankable investment structures for building the market, and ultimately catalyzing additional investment to meet Sustainable Development Goal 5 - Gender Equality.

Advancing Gender Equality through the Indo-Pacific Window

Advancing Gender Equality through the Indo-Pacific Design Funding Window

Over the past few years, gender equality has become increasingly incorporated in the investment strategies of impact investors and institutional investors, with its benefits recognized from both a development and business perspective. Convergence has consistently tracked the alignment of blended finance transactions with [SDG 5 (Gender Equality)](https://www.convergence.finance/news-and-events/news/5lqarXZRuQEMKeyeI9cI8e/view "Blending for gender balance"), witnessing a number of blended finance initiatives aiming to mainstream a gender lens, including the [2X Challenge](https://www.convergence.finance/news-and-events/news/4E6ktbVZY4c2seCociCqO6/view "G7’s 2X challenge: Blending finance with a gender lens"), the [Equality Fund](https://www.convergence.finance/news-and-events/news/4TEBJjU9fzApNJ9rdmZOEm/view "Blended Finance and Gender-Lens Investing"), and [Women’s World Banking](https://www.convergence.finance/news-and-events/news/5lqarXZRuQEMKeyeI9cI8e/view "Blending for gender balance"). Nonetheless, unlocking more capital to improve the development outcomes for women and girls remains a challenge.

This year, Convergence analyzed how gender has been incorporated in the blended finance market, based on its database of over 530 blended finance transactions, the majority of which have launched since 2010. Convergence found that while blended finance has demonstrated the ability to mobilize additional financing for gender-focused projects, publicly available information indicates that participants in blended finance transactions have not taken deliberate, consolidated action to incorporate a gender lens. 

## How has gender been approached in the blended finance market?

To assess the state of gender lens investing in the blended finance market to date, we drew from [Grand Challenges Canada’s Gender Equality Coding System](https://www.grandchallenges.ca/funding-opportunities/gender/white-paper/ "Grand Challenges Canada | Gender White Paper") to categorize historical deals into three main categories, assigning scores ranging from 0 - 2 to all transactions: 

![Figure 1: Convergence’s Gender Scoring for Blended Finance Transactions](//images.ctfassets.net/4cgqlwde6qy0/6QrEHaXg6HKymUsTQfl4kv/773f6ade2f2cff552bc2c51f549b6ab1/Slide3.png)
*Figure 1: Convergence’s Gender Scoring for Blended Finance Transactions*

Of the ~530 historical blended finance transactions analyzed, and based only on materials in the public domain, almost 24% of the transactions reflected a gender focus, with 14% of transactions achieving a gender score of 1, and 10% achieving a score of 2. Most deals (76%) were given a gender score of 0. 

## What do these trends reveal about the state of gender lens investing?

![Figure 2: Proportion of blended finance transactions with a demonstrated gender focus ](//images.ctfassets.net/4cgqlwde6qy0/6PycushwPYChIGTgiZo72Z/598f2c6569d77c4e548a6375d85324e3/Slide1.png)
*Figure 2: Proportion of blended finance transactions with a demonstrated gender focus *

Unsurprisingly, 3/4 of blended finance transactions demonstrated minimal gender-awareness. Most of these transactions did not evidence a consideration of the relationship between gender and other socio-economic factors. Public descriptions of the transactions provided no details on *how* women or girls might benefit from them, (e.g. through increased health, safety, or improved access to and control over resources.) Some transactions discussed women and girls in general terms but did not articulate how the project, fund, or facility would specifically empower women or improve their access to resources. For example, a press release on one project stated (paraphrased): *“Given the fact that women spend more time in the home than men, the clean cooking project will be more beneficial for women.”* Such statements lack substantive detail on how particular categories of women, rather than women as half of the general population, are affected. 

__Gender-disaggregated data is common in blended finance__

Collecting gender-disaggregated data is an important first step in developing evidence-based approaches for equitable development and assessing the impact of the blended finance market on women and girls. Thus, our baseline criteria for a score of 1 was at minimum the presence of gender-disaggregated data, most frequently evidenced through impact reports provided by fund managers or projects sponsors. With this baseline, we found 68 transactions to be ‘gender-aware and counting heads’, scoring a 1. More than a third (33%) of all blended finance transactions reported gender-disaggregated data. Commonly used indicators are the proportion of women-owned businesses in a fund or facility’s SME portfolio and the number of female participants in trainings and capacity building programs. On an organizational level, indicators include the percentage of an organization that is female-owned (or the number of women members in a cooperative), and the proportion of a board of directors or management team comprised of women. 

One example is the Acumen Resilient Agriculture Fund (ARAF). The fund provides equity and grant funding to support pioneering, and early-growth stage innovative agribusinesses to enhance climate resilience of smallholder farmers in Africa. It received grant and equity investments from FMO (Dutch development bank) and the Green Climate Fund (GCF), amongst others. With support from GCF, a [gender assessment](https://www.greenclimate.fund/document/gender-assessment-fp078-acumen-resilient-agriculture-fund-araf "GCF Gender Assessment") and a [gender action plan](https://www.greenclimate.fund/document/gender-action-plan-fp078-acumen-resilient-agriculture-fund-araf "GCF Gender Action Plan") was conducted for the fund. First, a gender assessment was conducted to identify the gaps that should be addressed by gender-responsive project interventions and included gender disaggregated data on key development indicators in its target countries of Uganda, Ghana and Nigeria. The action plan then focused on integrating the constraints and opportunities identified through the gender analysis into the project design. This included targeting the number of women and girls reached by ARAF over 12 years, the number of ARAF targeted households headed by women, and several other outcome indicators disaggregated by gender.

![Figure 3: Proportion of transactions that report gender-disaggregated data since 2010 ](//images.ctfassets.net/4cgqlwde6qy0/3DaVyWDlrpAalSySDPEAwE/574f645d5ff26ef2c2d228c9ac06341e/Slide2.png)
*Figure 3: Proportion of transactions that report gender-disaggregated data since 2010 *

__From counting heads towards gender-intentional actions__

To accelerate progress towards gender equality, there must be a shift towards concrete, gender-intentional actions. Only 57 historical transactions in our database signaled an intentional aim to achieve women’s empowerment or gender equality, thus scoring a 2. Unsurprisingly, we found an outsized focus on gender-intentional transactions in the microfinance (25% of transactions), health (15% of transactions), and water, sanitation and hygiene (WASH) sectors (17% of transactions), including the [IIX Women’s Livelihood Bond](https://www.convergence.finance/resource/1VB77bWNu0cGEeaCsOYwCq/view "Convergence | IIX Women's Livelihood Bond Case Study"), the [Japan ASEAN Women Empowerment Fund](https://www.convergence.finance/resource/5AR5njuJR45khZMkblhjOa/view "Convergence | Japan ASEAN Women Empowerment Fund Case Study"), [WaterCredit Investment Fund 3](https://www.convergence.finance/resource/4VLkTKyP0lzPzDhp6IoqF0/view "Convergence | WaterCredit Investment Fund 3 Case Study"), and [Sanergy](http://www.sanergy.com/ "Sanergy"). What all these transactions had in common was an explicit target to remove respective resource constraints faced by women and girls, whether it was access to quality education, vocational training, toilets or microloans.

Our analysis also shows that a gender lens can also be comprehensively integrated in infrastructure projects. Optima Energía, a Mexican energy service company, received support from the Canadian Climate Fund for the Private Sector in the Americas (C2F) and the Inter-American Development Bank (IDB) to install 25,000 high efficiency lights for the Municipality of Ensenada. The LED technology boosts the quality of light in the streets and contributes to public safety whilst reducing electricity expenses. Optima Energía received funding from the Canadian Climate Fund to sign the [Women’s Empowerment Principles](https://www.weps.org/ "Women’s Empowerment Principles") and achieve certification of compliance with government standards on workplace equality under the Mexican Standards on Labor Equality and Non-Discrimination. Publicly available [documentation](https://www.idbinvest.org/en/download/publication/832/attachment/7081 "IDB Invest | Financial incentives to close the gender gap") noted that Optima Energía created an internship for female engineering students in 2016 and 2017 to gain experience in a sector where they are underrepresented.  

## Towards greater impact for all genders

At large, blended finance practitioners have yet to address gender in a comprehensive manner or convey in their public outreach how they are addressing gender. Nevertheless, there are many positive examples of how a gender lens can be incorporated into blended finance transactions. Convergence recognizes the need to move beyond the gender binary to discern the impact of blended finance transactions on those identifying across the gender spectrum. The growing prevalence of gender-disaggregated data in the blended finance market is a crucial step towards developing a more cohesive set of metrics to capture gender equality outcomes. With improved data and information, gender analysis will become more reliable and standardized over time.

To make a lasting impact, investors and deal sponsors of all stripes must move beyond merely counting the number of women reached. Transactions that only refer to women by general statements or the number of female beneficiaries may lead to gender-washing at the cost of more substantive action. Furthermore, deal sponsors who cannot articulate gender issues will find themselves at a disadvantage in competing for capital. We believe this will be true across the board over time. And from our vantage point within the blended finance market, we expect the trend to be even more pronounced for anyone fundraising for a blended structure, where the support of catalytic, impact-driven funders is critical in attracting more traditional commercial investors. If designed and executed appropriately, projects with an integrated gender lens can catalyze greater, sustainable change. Making that case will matter. 

__Convergence is committed to channelling insights from its gender analyses into dialogue to share existing benchmarks and document good practice in the field. We will continue to work towards refining our gender scoring criteria as we gather more data.__


*This blog post, contributed by Convergence Data & Research Intern, [Divya Jalan](https://www.linkedin.com/in/divyajalan/ "Divya Jalan | Data & Research Intern at Convergence"), is part of a new series that will look at gender in the blended finance market, including key opportunities and challenges for achieving, measuring, and bolstering gender equality in blended finance transactions. Stay tuned for future blogs in the series. *

This year, Convergence analyzed how gender has been incorporated in the blended finance market, based on its database of over 530 blended finance transactions, the majority of which have launched since 2010. 

Assessing Gender-Lens Investing in Blended Finance

Assessing Gender Lens Investing in Blended Finance

COVID-19’s potential impact on the Sustainable Development Goals [is becoming clear](https://www.convergence.finance/news-and-events/news/3mh2pgzn6viJg6maXsJCIw/view "COVID-19, the Sustainable Development Goals, and Blended Finance"), and [global trade](https://www.qberacapital.com/post/trade-finance-an-asset-class-that-underpins-socio-economic-development "Trade Finance – An Asset Class that Underpins Socio & Economic Development"), a US$ 17 trillion industry which helps direct funds to businesses worldwide, supporting economic growth, industrialization and infrastructure development, is where great disruptions are already being felt. The COVID-19 pandemic has challenged global trade and supply chains in four different ways: 

__1.	Supply chain and logistics disruptions__

Consumers worldwide have dealt with delays or shortages in the supply of goods, with companies enduring the same challenges, particularly those sourcing goods from multiple suppliers across multiple countries. Disruptions in global trade and supply chains directly impact economic competitiveness and job creation, with developing market companies facing greater difficulties in exporting their goods overseas, leading to cutbacks in export-oriented jobs in the developing world, [impacting SMEs and the livelihoods of poor people in particular](https://www.wto.org/english/news_e/news20_e/trfin_01jul20_e.htm "Heads of WTO and development banks voice support for trade finance amid COVID-19 crisis"). These broad trends contributed to the [IMF’s latest projection](https://www.imf.org/en/Publications/WEO/Issues/2020/06/24/WEOUpdateJune2020 "A Crisis Like No Other, An Uncertain Recovery") of a contraction of 4.9% in global GDP in 2020. Lives are directly affected when critical medical goods such as breathing machines are delayed, or critical components are unavailable. However, such disruptions will likely soon be overcome through various types of workarounds, where necessary.

__2.	Re-thinking supply chain strategies and industrial policies__

Companies worldwide are reviewing their supply chain strategies, very few of which were designed to cope with a global pandemic. Diversification and redundancy will be the trends to watch in this space. For example, to reduce future risks of supply chain disruption post-pandemic, [Japan launched a US$ 2.4 billion fund](https://theaseanpost.com/article/japan-switching-manufacturing-asean "Japan switching manufacturing to ASEAN") to help finance local businesses bringing manufacturing back to Japan from China, or moving it to other countries in Southeast Asia. Ultimately, cost increases may arise, which manufacturers will try to pass on to customers. This will happen across different industries, particularly where cross-border supply chains exist. Governments are also starting to ask whether certain critically important products, such as testing kits and face masks, could be produced domestically to avoid international competition for limited manufacturing capacity in future crises. Just as companies will invest to modify their supply chains, governments may rethink their industrial policies in the realm of critical goods, however defined.

__3.	Digitization for resiliency__

The pandemic has revealed the urgent need to digitize global trade and supply chains to keep goods and services moving and operable. This trend will undoubtedly lead to an evolution in the global system of trade finance, which is largely paper based. More speed is needed to create a globally harmonized and interoperable digitized infrastructure with standard identifiers (e.g. the Legal Entry Identifier developed by the International Organization for Standardization) and with laws and technical protocols (as recommended by the International Chamber of Commerce and the UN Commission on International Trade Law). This requires investment, international dialogue, and process re-engineering across trade finance departments at banks, and in exporters, importers, customs, port operations, shipping companies and freight forwarders. The Trade and Development Bank’s [partnership with dltledgers](https://www.convergence.finance/news-and-events/news/3almotcrqDvuz9FGjbrcGR/view "Member Spotlight with Michael Awori from the Trade Development Bank (TDB)"), a platform using blockchain technology to enable trading companies to connect their supply chain network to their financing banks, thereby digitizing trade finance processes, is a good example of how vital trades can continue to be effectively financed despite the pandemic. 

__4.	Pressures in banking systems and trade finance__

Banks’ credit appetites tend to change with a lag, but when they change, they do so abruptly. COVID-19’s demand shock threatens to create a global wave of bankruptcies and non-performing loans, pressuring banking systems worldwide. For example, in the wake of the Global Economic Crisis (“GEC”), developed country banks quickly reduced their risk limits and all but stopped confirming letters of credit from developing country issuing banks. As trade finance halted, it threatened essential trade flows and job creation, and several DFIs stepped in to provide guarantees of issuing banks at market-conform rates. DFIs like IFC, EBRD, and ADB continue to operate these programs with significant financial success and development impact. Indeed, in response to the pandemic, the [AfDB is allocating up to US$ 270 million](https://www.afdb.org/sites/default/files/2020/04/23/supporting_our_clients_through_the_crisis_-_crf.pdf "AFRICAN DEVELOPMENT BANK COVID-19 RAPID RESPONSE FACILITY (CRF)") to help its private sector clients access trade finance and guarantees, while IFC’s existing Global Trade Finance Program is [providing US$ 2 billion](https://www.worldbank.org/en/news/press-release/2020/03/17/world-bank-group-increases-covid-19-response-to-14-billion-to-help-sustain-economies-protect-jobs "World Bank Group Increases COVID-19 Response to $14 Billion To Help Sustain Economies, Protect Jobs") to cover financial institutions’ payment risks, thereby facilitating their trade financing operations. With COVID-19, global trade finance so far does not seem to have suffered any material credit risk or operational risk issues, but the GEC scenario may repeat itself. Let’s hope for the best but prepare for the worst.

## How can blended finance support economic recovery and resiliency in global trade?

While [blended finance](https://www.convergence.finance/news-and-events/news/dpcDxlUX2UVdIDTt9TjAi/view "COVID-19: How Blended Finance Responds") will have a minimal role in the initial response to COVID-19, including disruptions to supply chains and logistics, it can contribute materially in the following three areas for medium-term recovery and long-term economic reconstruction:

__1.	Reduce prices of vital goods:__ Governments rethinking their industrial policies to improve pandemic resilience and achieve self-sufficiency for certain critical goods are likely to pursue Public-Private Partnerships (PPPs) to alleviate pressure on the public purse. Here, government agencies tender out concessions for the manufacturing and distribution of key products to the private sector, and back these concessions with partial offtake contracts. Blended finance can help lower the prices of critical goods, like medicine or medical diagnostic equipment to improve the accessibility of essential commodities, especially for low-income consumers; by “buying down” the cost of manufacturing through philanthropic grants, viability gap funding and technical assistance from DFIs, international health or development agencies, and concessional financing through private foundations and/or local state-owned banks. 

__2.	Catalyze private sector capital:__ Post COVID-19, DFIs and development agencies may be more interested in funding the digitization of global trade finance in countries deemed to be key nodes of global trade. Again, this may take the form of PPPs, where blended finance can be used to catalyze private sector capital, offering an appropriate financial return for the risk taken in making impactful digital investments. Savings from efficiency gains and incremental revenues created by more business activity, more customs duties collected, and less leakage should make these digital infrastructure investments financially attractive propositions. Importantly, the [Principles for Digital Development](https://digitalprinciples.org/ "Principles for Digital Development") – guidelines integrating best practices into technology-enabled development programs - should be adhered to.

__3.	Boost transaction volume:__ DFI trade finance programs extend guarantees to cover relatively short-dated trade finance transactions. Depending on the issuing banks selected to be eligible for the guarantees and their customer base, the impact of these programs can be felt in a large number of SMEs, supporting job creation, economic growth, and gender equality. These guarantee portfolios yield low single-digit market-based returns, with typically zero losses and very low delinquencies over extended periods of time, due to the criticality of the goods purchased. This fixed income-like risk-return profile, akin to longer-dated commercial paper or shorter-dated notes, has proven to be attractive to insurance companies, who are happy to take some of the guarantee exposure off the books of the DFIs running the trade program. This use of DFI guarantees, enhanced by risk transfer mechanisms to the private sector to free up DFIs’ balance sheets to boost transaction volume, is a powerful example of blended finance leveraging public sector risk guarantees into private sector capital deployment. This co-financing can be taken to the next level through a more developed syndication effort by DFIs and their trade finance programs, marketing this investment opportunity to a broader spectrum of institutional investors, for whom it can serve as an appropriate liquidity management strategy.


*This blog post, contributed by [Robert van Zwieten](https://www.convergence.finance/about/team/2EeTfRfCAC7TGu1PgIltXM "Convergence | Robert van Zwieten"), is part of a series on how blended finance can help mitigate the impact of COVID-19 on the sustainable development goals. Did you read our first article on [COVID-19, the Sustainable Development Goals, and Blended Finance](https://www.convergence.finance/news-and-events/news/3mh2pgzn6viJg6maXsJCIw/view "COVID-19, the Sustainable Development Goals, and Blended Finance")?*

Convergence shares how COVID-19 has challenged global trade and supply chains in four different ways.

Trade Finance & Blended Finance during COVID-19

Trade Finance, Supply Chains, and Blended Finance in the Age of COVID-19

*Originally published on [ImpactAlpha](https://impactalpha.com/five-tips-for-attracting-capital-to-blended-finance-vehicles/?utm_source=ImpactAlpha&utm_campaign=7f3ff448b9-EMAIL_CAMPAIGN_2019_08_20_12_35_COPY_01&utm_medium=email&utm_term=0_57980c6bda-7f3ff448b9-105978721&mc_cid=7f3ff448b9&mc_eid=19bcc9d316 "Five tips for attracting capital to blended finance vehicles"). *


Blended finance has gained significant momentum in the past few years, and we increasingly see more early stage and late stage blended finance deals emerge to attract the attention, and ultimately capital, of investors to advance the SDGs. With traditional aid and development finance further stretched to meet immediate response and recovery needs brought on by COVID-19, there is greater urgency to create more bankable deals to draw increased and larger volumes of private capital to SDG projects. As the aftermath of this pandemic slowly reveals itself, two things are clear: (i) in the current context, investors are more cautious to allocate capital, and (ii) concessional capital providers will be even more selective. Now more than ever, deal sponsors–any organization looking to fundraise or sponsor a deal– must strive to set themselves apart.

Over the course of the last 5 years, our work to capture blended finance activity, support market acceleration, and match investors and deals, has helped us identify some effective ways to yield “better blending.” Whether you are an international NGO supporting gender-smart SMEs or a first-time fund manager developing a tiered structure to meet a diverse set of impact objectives, there are certain steps worth taking to attract capital from funders and investors:

__1. Be intentional with your blended approach:__ Blended finance is not a remedy for all development challenges. There are many development interventions that require a purely grant funded model, or are commercially viable, and do not need catalytic capital to give them a boost. This is often one of the first questions a donor or concessional capital provider will ask themselves before proceeding, often framed as, *[“Is my role and participation additional?”](https://www.convergence.finance/news-and-events/news/4gYWMo8JoW6VZsmYH8F8IV/view "What is Additionality?")* because they have little interest to boost someone else's returns without buying associated impact, or patch up a weak deal. So, deal sponsors must express why and how a blended finance approach is right for the investment vehicle and thesis. Demonstrate how you arrived at your proposed structure; reveal the considerations made for other structures, and/or share perspectives considered as a result of consultations with different investors to improve the creditability of your proposal. You will likely also do better if you can link your capital structure to the specific development impact that would be unlocked as a result. Remember, from the point of view of a donor agency, foundation, or NGO, understanding the best and most efficient way to ‘buy impact’ or, demonstrate the specific impact you can generate with each dollar received, is imperative. If you can generate competitive returns without support from catalytic capital, or if a funder recognizes they could be more impactful by providing a grant of the same size or less, your blended vehicle likely won’t raise catalytic capital.

__2. Balance innovation and scale:__ Innovation is exciting, but the reality is, institutional investors don’t share the same sentiment for innovative structures, and most are [interested in standardized products](https://www.convergence.finance/resource/3cpgfofIUn2QY8rFEV2IFt/view "How to Mobilize Private Investment At Scale in Blended Finance") that are familiar, tested, and proven. At Convergence, we encourage deal sponsors to ask, “Could this be achieved using a simpler structure?” The good news is that no matter what sector, SDG, or risk you face, there are [case studies](https://www.convergence.finance/resource "Convergence Resource Library") you can learn from, iterate, and even simplify. One trend worth mentioning is that portfolio approaches and tiered structures enable diversification, which in turn reduces risk. If we analyze historical deals in aggregate, we see how a portfolio approach can enhance a portfolio of projects from speculative grade to investment grade, while allowing investors with different risk, return, and impact motivations to invest alongside each other. In order to achieve scale, we must continue to learn from those before us and replicate what works.

__3. Do your homework on targeted investors and funders:__ Deal sponsors that understand the market and key players will more likely impress investors and funders. Learn who is who, and types of capital investors and funders provide. Knowing historical activity can also assist deal sponsors in identifying and understanding investors’ specific limitations and areas of interest. Tools like the Investor-Data tool allows Convergence members to perform filtered searches (i.e. sector, region and SDG) to identify relevant investors and funders. There are also a host of other market builders dedicated to raising awareness and creating tools to invest for impact. The GIIN, Mission Investors Exchange, OECD, and AVPN are a few with great publicly available resources.

__4. Avoid overuse of buzz words and jargon:__ Use targeted terminology and make sure you can substantiate what you say. For instance, if you include SDG 5 (Gender Equality) as a targeted SDG and focus area of your investment opportunity, you should be able to (i) provide an analysis of how gender issues might affect your transaction, (ii) explain how your transaction in turn will help achieve greater gender equality, and (iii) detail how you intend to measure this impact through gender disaggregated data. Further, if you are seeking a combination of concessional and commercial capital, you may find it necessary to tailor your marketing materials to each of those specific audiences.

__5. Build a Brain Trust:__ Blended finance is currently more of an art than a science and demands a range of organizations collaborate to achieve a common goal. A brain trust or advisory circle can help foster collaboration; and it pays to identify and engage potential investors and funders, and consider their feedback, as early as possible. A brain trust can also ensure you adopt all the lessons available on how to approach similar development challenges or risks – real or perceived –that require mitigation or risk transfer. We recommend building this taskforce and sound testing your concept as early as 3-6 months before fully developing and finalizing a vehicle.

Blended finance is on the rise but remains a complex structuring approach. Designing a vehicle takes time and fundraising can conservatively take anywhere from 1-2 years, even with a proven concept and expansive networks. Utilize the resources and tools available in the market to support your journey in designing the most investible blended finance vehicle. The reality is most structures look considerably different upon financial close, no matter what. So, deal sponsors must manage expectations; be open to reimagination and patient with the process to produce the most viable model for developmental impact and financial return. This way, we are better positioned to see more commercially viable and investible deals in developing countries targeting the SDGs.

Safia Gulamani draws from Convergence’s experience in enabling market acceleration and operating a matchmaking deal platform and offers 5 practical tips to attract capital from funders and investors.

Five Tips for Attracting Capital to Blended Finance Vehicles

__Toronto, 24 June 2020 –__ With funding from the Australian Government, Convergence is pleased to announce it has awarded a feasibility study grant to Allotrope Partners (Allotrope) through the [Indo-Pacific Design Funding Window](https://www.convergence.finance/design-funding/open-window/indo-pacific-open-window "Indo-Pacific Design Funding Window"), supporting the development of an innovative blended finance vehicle targeting Sustainable Development __Goal 7–Affordable and Clean Energy__ in the Philippines.

The Philippines faces a complex energy challenge; as the demand for energy continues to climb, supply tightens and energy prices [rise](https://www.manilatimes.net/2020/02/28/supplements/philippine-energy-outlook-for-2020/697605/ "Philippine Energy Outlook for 2020"). The cost of transmitting power and transporting fuel to the 7,000+ islands of the Philippine archipelago has led to the Philippines having the highest electricity rates in Asia. Investing in renewable energy is imperative for the country’s progress towards energy and economic sustainability. Fortunately, the Philippines has many potential renewable energy resources including solar, wind, ocean and geothermal to help realize Goal 7.

Convergence’s feasibility study grant will enable [Allotrope](https://www.allotropepartners.com/ "Allotrope"), an international clean energy advisory firm specializing in emerging markets and technologies, to explore the feasibility of a bankable structure for the Local Utility Project Aggregator (LUPA), a proposed US$150M blended finance vehicle that will bring together Electric Cooperatives in the Philippines to invest in and own renewable energy projects. Through this vehicle, Allotrope aims to reduce the Philippines’ dependence on unsustainable and expensive energy sources such as coal and diesel, advancing the government’s goals to transition 35% of its energy mix to renewable energy.

“LUPA is a strong fit for the Indo-Pacific Design Funding Window as it aims to develop a fit-for-purpose financial structure to empower local Electric Cooperatives to meet renewable energy targets and catalyze local market financing, paving the way for a greener future and lower energy prices for the Philippines, ” says Robert van Zwieten, Managing Director for the Asia-Pacific region at Convergence.

Allotrope has strong relationships with investors, developers, and government decision-makers in the region, with a proven track record of leading public-private collaboration initiatives in the Indo-Pacific region to spur renewable energy investment and deployment at scale. Allotrope will draw upon this experience to engage with a range of local stakeholders and conduct a gender analysis to ensure effective and equitable implementation throughout the LUPA design process. 

“Our team is eager to partner with Convergence on this exciting effort to expand renewable energy opportunities for Electric Cooperatives and the communities they serve. This feasibility grant will play a critical role in ensuring that LUPA can forge pathways for thousands of megawatts of community-focused renewable energy deployment across the Philippines,” says Marc Stuart, CEO of Allotrope Partners.

 

__About Convergence’s Design Funding Program__

Convergence’s [Design Funding Program](https://www.convergence.finance/design-funding "Convergence Design Funding Program") operates as a market acceleration tool providing early-stage capital to support blended finance solutions in emerging markets to accelerate the number of investible transactions in market targeting the Sustainable Development Goals. The Indo-Pacific Design Funding Window provides grant funding for the design and launch of catalytic blended finance solutions focused on sustainable & resilient infrastructure and gender equality in certain countries in the Indo-Pacific region. This Design Funding Window is funded by the Australian Government.

Convergence accepts Design Funding applications on a continuous basis. To be considered for the next review cycle for the Indo-Pacific Design Funding Window, practitioners are invited to submit their applications by August 10, 2020. Find out more [here](https://www.convergence.finance/design-funding "Convergence Design Funding Program").

 

__About Convergence__
 
Convergence is the global network for blended finance. In addition to market acceleration through its Design Funding program, Convergence generates blended finance data, intelligence, and deal flow to increase private sector investment in developing countries. Convergence’s global membership includes over 200 public, private, and philanthropic investors as well as sponsors of transactions and funds. To learn more, visit [www.convergence.finance](https://www.convergence.finance "Convergence"). 

 

__Media Contact__
 
Namrata Narayan 

Head of Communications 

Convergence Blended Finance

Tel.: +1 647-886-7179 

namrata.narayan@convergence.finance

Convergence has awarded a feasibility study grant to Allotrope Partners through the Indo-Pacific Design Funding Window, supporting the development of an innovative blended finance vehicle targeting SDG 7–Affordable and Clean Energy in the Philippines.

Convergence Awards Allotrope Partners Feasibility Grant

Convergence Awards Allotrope Partners Feasibility Grant through Indo-Pacific Design Funding Window

[The Trade and Development Bank (TDB)](https://www.tdbgroup.org/ "TDB Group") is the regional development finance institution for Eastern and Southern Africa. It acts as a specialized African wholesale bank, offering short, medium- and long-term financing products including debt, equity, and guarantees, across a wide set of sectors, supporting public and private sector clients to advance their development projects and realize transactions that contribute to the SDG agenda.

As liquidity in trade proves vital in times of crisis, we connected with Michael Awori, Chief Operating Officer at TDB, to learn more about the bank’s blended trade finance initiatives and innovations to support the flow of trade and capital and goods in the region to ensure development projects get the support needed to generate impact. 
 
## Could you shed some light on how TDB’s blended trade finance initiatives may help mitigate the impact of COVID-19?

Liquidity is key. What we are doing is designing and implementing solutions to ensure liquidity continues to flow for short-term trade, long-term trade finance and corporate finance to keep development on track. Recently, we closed a primary forfeiting transaction in the healthcare sector. For this trade project, we worked with the sponsor of a hospital project, the contractor and a local bank. In this case, TDB delivered liquidity to allow the project to continue, enabling the local bank to provide unfunded exposure and deploy its liquidity into other ventures. Likewise, we have recently signed a revolving pre-export structured trade commodity finance facility for a fair-trade company, enabling it to unlock the working capital needed to stay competitive at a time when liquidity is in short supply. 

TDB also provides direct liquidity to several institutions supporting vital sectors so goods can flow, and supply chains can be maintained. The other underlying challenge we are responding to is that of trade finance still being very paper heavy. The fact that many airports are closed across our region means paper cannot move. When this happens, trade comes to a grinding halt. TDB has accelerated its technological innovations through a partnership with [dltledgers](https://www.dlt.sg/ "dltledgers"), a platform that uses blockchain technology to enable trading companies to connect their supply chain network to their financing banks, thereby digitizing trade finance processes and documentation. Investing in blockchain has enabled us to continue to effectively finance vital trades, such as imports of agricultural commodities, working closely with suppliers and institutions within our member states, despite the significant challenges caused by the pandemic. 
 
## What are the biggest barriers to financing the SDGs in Africa? 

One of the biggest barriers is the gap between perceived risk and real risk. Across Africa and our footprint, certainly there are regions with poor enabling environments, where we see weak institutions, poor infrastructure, high costs of doing business, stretched timelines for pipeline origination, and big data and information gaps. Those factors do affect risk. But these realities and conditions exist in many markets beyond the continent. Africa is not unique in these circumstances. Unfortunately, the perceived level of some of these risk factors is higher in Africa than elsewhere. What we need to recognize is that the real risk is not. Those bold enough to step forward and ignore the noise are discovering it is possible to find attractive deals, price them and execute those deals successfully. 
 
## Where do you see the greatest opportunity in overcoming this perceived risk challenge? What can be done to mobilize domestic institutional capital toward developing projects in the region?

We must start at home. We need to put more of Africa’s long-term institutional capital to work on the continent rather than investing it in low-yielding securities elsewhere. TDB is certainly focused on this. We have over 14 African institutional investors–including pension funds–among our shareholders, who, apart from the exceptional and consistent financial returns we deliver, have invested in TDB because of the SDG-aligned returns we offer. In addition to this, we can improve the conditions attached to this capital. Blending often comes with strings that impact the absorption of institutional capital, whether it is the type of project, or the type of sponsor, or the source of equipment. While governance matters are important, we should place greater emphasis on outcomes and monitoring and evaluation, with less emphasis on restrictions at inception. This could lead overall to higher delivery and absorption of institutional capital towards the SDGs.

Also, capital going towards Technical Assistance (TA), or softer support to get projects to bankability, could support higher take-up and an increased number of projects being successful. Capital that is more patient and willing to take on a longer tenor will play a key role. Here, African institutional capital can also provide a local currency component to de-risk transactions to get more SDG projects to financial close. 
 
## How is TDB using trade finance and blended finance to close the SDG funding gap?

To some extent, everything we do is blended. On the treasury side, TDB mobilizes funding from various sources (e.g. public sector, institutional investors, private and commercial capital) towards our portfolio, over half of which directly and indirectly contributes to SDGs. 
Given the recent pullback of global correspondent banks from Africa, and thanks to our investment grade credit ratings, we have cemented our role as the ideal partner to intermediate global and regional capital into the region, and as such, have been playing an increasingly critical role in addressing trade finance gaps as well as forex challenges in the region. Our financing interventions have averted fuel shortages in certain countries. In others, we have helped secure the sourcing and imports of strategic commodities, ultimately facilitating higher levels of inter and intra-African trade and regional integration. Indeed, amid COVID-19, TDB continues to ramp up support to import wheat, grains and fertilizer, enhancing agriculture and ensuring food security, as well as employment. For the long-term part of our business, we fund several manufacturing projects and facilitate infrastructure development. For our energy portfolio, we are placing a greater emphasis on financing renewable energy projects, particularly hydro, wind and solar, which already account for over 70% of our portfolio. 

Then there is regional integration, which is embedded in our DNA as the sub-region’s DFI. Our interventions have included funding ports and transportation, including roads, railways and regional airlines. Our work is designed to facilitate greater linkages both regionally and internationally, and a higher level of trade. Sitting here in Nairobi, the Silicon Savannah, we have seen the benefits of mobile money and the financial inclusion benefits that emerge as a result. To expand these benefits regionally, we have supported the telecom sector through funding expanded fibre optic cable capacity, such as the Burundi backbone project, as well as more recently, leading telecoms such as Econet in Zimbabwe and Cable & Wireless in the Seychelles.
 
## How can a regional DFI like TDB grow the field of blended finance and engage other local players such as national DFIs and local commercial banks? 

We collaborate significantly with local and regional banks as well as national DFIs in our regular course of business. Beyond standard operations, we have a 3-year pilot program targeting SMEs, providing various instruments from grants, guarantees, Letter of Credit confirmations and TA, via partnerships with local financial institutions, and with engagement from trade finance institutions and multinational development finance institutions (DFIs). For funding and membership, we are mobilizing additional institutional investors, be it pension funds, insurance companies, development funds, as well as other regional DFIs, to join the bank and blend their capital with the capital we raise. We even had a global African think-tank join as shareholder last year. 

Regarding DFIs, we are supporting mechanisms to help other counterparties assess the risk of capital of some of these institutions that may not be rated by a global rating agency like Moody’s. We are part of the Association of African DFIs (AADFI) that reviews African DFIs against several different standards and benchmarks, most of which mirror what the ratings agencies measure, but it is an African institution holding accountable African DFIs. Through these measures, we are raising governance and performance standards across the industry, which we believe will ultimately lead to higher volumes of financing flowing into the region. 
 
## What is your strategy for mainstreaming gender at TDB and encouraging a trickle-down effect at other DFIs and financial institutions? 

We are mainstreaming gender and promoting gender inclusive practices in a few ways: (i) through our SME pilot program, we directly target women-owned business and apply financial and non-financial interventions to support the growth of these businesses, ii) within the financial institutions (FI) space, we assess and track the performance of our clients via different operational and financial metrics, including gender and youth, (iii) with 42% of our workforce being female, high representation of women in the ranks of senior staff and management, and a gender mainstreaming policy, by leading by example and institutionalizing gender mainstreaming internally ourselves, and (iv) through knowledge sharing and capacity building activities, we create spaces to share best practices and scale gender awareness to regional FIs whom we may not touch directly. We have worked with European Investment Bank on the Eastern Africa SME Banking & Microfinance Forum – some people do not know that – for the last couple of years. This is a good example of how TDB is ensuring knowledge and capacity building seeps in the region. 

Our inaugural, stand-alone Sustainability Report will be published shortly, and shares our work on gender, among other areas, further institutionalizing our commitment to gender and sustainability.

Convergence recently spoke with Michael Awori, TDB’s newly appointed COO, to learn about the bank’s blended trade finance initiatives and innovations to ensure development projects get the support needed to generate impact.

Member Spotlight with Michael Awori from TDB

Member Spotlight with Michael Awori from the Trade Development Bank (TDB)

__Toronto, 8 June 2020__– With funding from the [RS Group](http://www.rsgroup.asia/ "RS Group") for its Asia Natural Capital Design Funding Window, Convergence awards Blue Finance and Ocean Outcomes (O2) design-stage grants for blended finance solutions targeting Sustainable Development Goal 14–Life below Water.

Blue Finance receives a proof of concept grant for the Blended Blue Finance Facility (BBFF) for the effective management of several Marine Protected Areas (MPAs) in Southeast Asia. O2 is awarded a feasibility study grant for developing a pioneering Sustainable Seafood Fund that aims to change the way Fishery Improvement Projects (FIPs) are funded in the Asia-Pacific.

“We are delighted to use our design funding program as a true market accelerator to support Blue Finance and O2, both presenting promising and scalable blended finance solutions to attract greater private and public sector investment towards projects focused on natural capital across the Asia- Pacific,” says Joan Larrea, Chief Executive Officer at Convergence.

Marine and coastal ecosystems face ongoing threats from a variety of sources including unsustainable fishing, poor agricultural practices, coastal development and tourism. New financing models are needed to inject additional capital to support development projects advancing sustainable management of marine areas and fishing practices.

[Blue Finance](http://blue-finance.org/ "Blue Finance") is a social enterprise developing solutions for the management and financial sustainability of MPAs. Projects enhance marine natural capital, improve food security and incomes for vulnerable coastal communities and increase climate change resilience across Southeast Asia and the Caribbean. The BBFF structure brings together local communities, NGOs, government, donors, and investors in a collaboration that seeks to blend commercial finance and grant funding to finance the up-front capital needs of the MPAs.

“Conservation projects, particularly those focused on marine ecosystems, are not attracting enough commercial capital due to a shortage of investment-ready projects. This grant enables Blue Finance to increase investment in marine conservation and economic development in Southeast Asia,” shares Nicolas Pascal, Executive Director & Co-Founder of Blue Finance.

[O2](https://www.oceanoutcomes.org/ "Ocean Outcomes") works with commercial fisheries, seafood industry, local communities and NGOs to develop and implement creative solutions towards more sustainable fisheries and fish farming practices. O2 will receive design funding to explore the feasibility of a US$50M Sustainable Seafood Fund, leveraging private and public capital to better support improved practices in fisheries production.

“The lack of substantial, long-term financing for fisheries improvement is a significant barrier to meeting sustainable seafood production goals,” said Neel Inamdar, who is leading development of the Fund for O2. “Support from Convergence will allow us to scope a solution to this critical need by providing an opportunity for leading companies to mainstream sustainability into their business models while also addressing long term seafood supply risks.”

For Blue Finance, the grant will serve as critical early-stage capital to support facility design and structuring, fundraising and marketing, and getting several MPAs to investment readiness in Asia. O2’s grant will support fishery pipeline identification and screening, developing the investment structure, building an operating model, business plan and identifying potential investors.

 

__About Convergence’s Design Funding Program__

Convergence’s Design Funding Program operates as a market acceleration tool providing early-stage capital to support blended finance solutions in frontier markets and nascent sectors to accelerate the number of investible transactions in market targeting SDGs.

The [Asia Natural Capital Design Funding Window](https://www.convergence.finance/design-funding/open-window/asia-natural-capital-open-window "Asia Natural Capital Window") supports blended finance solutions that find new ways to enhance and protect the world's stock of natural assets, including water, land, soil, air, plants and animals, by attracting private investment at scale. These solutions will directly support SDGs 13, 14 and 15, and could contribute to protecting biodiversity, reducing the degradation of ecosystems (e.g. deforestation), mitigating and adapting to climate change, reducing unsustainable use of land and oceans, and providing a fair and sustainable living to local communities. This design funding program is the first of its kind in the region, anchored by RS Group at US$3M. The window is open to other co- funders and currently accepting applications.

 

__About Convergence__

Convergence is the global network for blended finance. On top of market acceleration through its Design Funding program, Convergence generates blended finance data, intelligence, and deal flow to increase private sector investment in developing countries. Convergence’s global membership includes over 200 public, private, and philanthropic investors as well as sponsors of transactions and funds. To learn more, visit [www.convergence.finance](http://www.convergence.finance "Convergence Blended Finance").

 

__Media Contact__

Namrata Narayan

Head of Communications

Convergence Blended Finance

Tel.: +1 647-886-7179 

namrata.narayan@convergence.finance

With funding from the RS Group for its Asia Natural Capital Design Funding Window, Convergence awards Blue Finance and Ocean Outcomes (O2) design-stage grants for blended finance solutions targeting Sustainable Development Goal 14–Life below Water.

Grant Recipients Chosen for Asia Natural Capital Window

Blue Finance and Ocean Outcomes Become First Grant Recipients of Convergence’s Asia Natural Capital Window

*Image Source: MotleyFool*


The COVID-19 pandemic threatens the achievement of the Sustainable Development Goals (SDGs). With [investors](https://www.unescap.org/blog/financing-sdgs-covid-19 "Financing SDGs Under A New Normal: Challenges And Response To COVID-19 Pandemic") withdrawing $90 billion from emerging markets in the first 3 months of 2020 (the largest outflow ever recorded), and with rising debt burdens in developing countries and depreciating local currencies, the sustainable development agenda faces a difficult landscape. The pandemic is also directing critical domestic resources away from financing the SDGs while worsening pre-existing development challenges in ways that are interlinked. [People struggling to access food](https://docs.wfp.org/api/documents/WFP-0000114546/download/?_ga=2.101491649.1148624555.1589293938-251663906.1588772381 "WFP Global Report on Food Crisis") (SDG 2, Zero Hunger), for example, often suffer higher rates of underlying health conditions (SDG 3, Good Health & Well-Being) that make them more susceptible to developing severe COVID-19 symptoms. This is compounded by already-weak national healthcare systems under increased strain. 

Blended finance has solutions that can be funded today to address the challenges and reduce the economic effects of COVID-19. Blended finance combines development funds (from governments and philanthropic foundations) and private sector investment to fund SDG projects. Around [$15 billion of blended finance is mobilized annually](https://www.convergence.finance/resource/13VZmRUtiK96hqAvUPk4rt/view "The State of Blended Finance Report 2019"), and with over 500 blended finance transactions having reached financial close, numerous projects demonstrate how to successfully direct funding to targeted objectives. Here, we discuss COVID-19’s impact on the SDG agenda. We also highlight challenges in the real economy that, on the basis of our own analysis and our conversations with the development community, have been identified as being well-conditioned for blended finance solutions. In subsequent publications, Convergence will explore the role that blended finance can play in counteracting some of these challenges. The time for [blended finance at scale](https://www.convergence.finance/news-and-events/news/dpcDxlUX2UVdIDTt9TjAi/view?utm_source=Convergence-Covid-BF-Blog&utm_medium=website&utm_campaign=COVID-Statement "Blended Finance Responds to COVID-19") has truly arrived.

## COVID-19 and the SDGs

What are the likely impacts of the COVID-19 pandemic on the sustainable development agenda? Its impact on SDG 3 (Good Health & Well-Being) may be most obvious, with developing economies [unprepared](https://thehill.com/opinion/healthcare/482049-stop-coronavirus-and-the-next-epidemic-by-establishing-a-healthy-security "Stop coronavirus and the next epidemic by establishing a health security fund now") for the pandemic due to persisting challenges such as relatively weak health systems, vulnerable supply chains, and difficulties with infection prevention and control. But what are the pandemic’s likely effects on some of the other SDGs? 

Consider SDG 1 (No Poverty). [Average incomes in one out of five countries globally](https://developmentfinance.un.org/fsdr2020 "UN Financing for Sustainable Development Report 2020") were projected to decline ahead of the outbreak of COVID-19, mainly in Africa, Latin America and the Caribbean, as well as parts of Western Asia, and the pandemic is projected to further accelerate declines in per capita incomes. Commodity exporting developing countries, for example, [already experiencing](https://developmentfinance.un.org/fsdr2020 "UN Financing for Sustainable Development Report 2020") slowing growth in GDP per capita over the course of the decade, will be particularly impacted by the sustained weaknesses in commodity prices caused by the pandemic. Indeed, [estimates](https://www.wider.unu.edu/sites/default/files/Publications/Working-paper/PDF/wp2020-43.pdf "UNU-WIDER Estimates of the impact of COVID-19 on global poverty") suggest that global poverty could rise for the first time since 1990, potentially setting the world back a decade in achieving SDG 1. [An analysis](https://www.wider.unu.edu/sites/default/files/Publications/Working-paper/PDF/wp2020-43.pdf "UNU-WIDER Estimates of the impact of COVID-19 on global poverty") of COVID-19’s potential impact shows that the number of people living in poverty globally could increase by 85-135 million under a 5% contraction in per capita household incomes and consumption, by 180-280 million under a 10% contraction, and by 420-580 million under a 20% contraction. 

The global economic contraction ([forecast at 3% for 2020 by the IMF](https://blogs.imf.org/2020/04/14/the-great-lockdown-worst-economic-downturn-since-the-great-depression/ "The Great Lockdown: Worst Economic Downturn Since the Great Depression")) and the related drop in international trade ([currently estimated at 27% QoQ, for Q2 2020](https://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=2369 " COVID-19 triggers marked decline in global trade, new data shows")) will also directly threaten SDG 8 (Decent Work & Economic Growth), with [1.25 billion workers](https://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/documents/briefingnote/wcms_740877.pdf "ILO Monitor: COVID-19 and the world of work. Second edition") employed in sectors facing severe falls in output and lay-offs. Meanwhile, remittances from migrant workers [are forecasted to decline by 20%](https://www.worldbank.org/en/news/press-release/2020/04/22/world-bank-predicts-sharpest-decline-of-remittances-in-recent-history "World Bank Predicts Sharpest Decline of Remittances in Recent History") in 2020, the sharpest decline in recent history, cutting crucial income sources for many households throughout the developing world, while social distancing measures may have an outsized effect on livelihoods in developing nations with large informal economies without adequate social safety nets.

The pandemic also threatens progress on SDG 2 (Zero Hunger). Current [estimates](https://insight.wfp.org/covid-19-will-almost-double-people-in-acute-hunger-by-end-of-2020-59df0c4a8072 "WFP Risk of hunger pandemic as coronavirus set to almost double acute hunger by end of 2020") suggest that an additional 130 million people in low and middle-income countries could face acute hunger risk because of COVID-19. Pandemic response measures, such as restrictions on movement, threaten to heighten logistical challenges within business supply chains, [disrupting](https://docs.wfp.org/api/documents/WFP-0000114546/download/?_ga=2.56528875.1148624555.1589293938-251663906.1588772381 "WFP Global Report on Food Crisis") the transportation and processing of food, and [potentially straining](https://www.ilo.org/wcmsp5/groups/public/---ed_dialogue/---sector/documents/briefingnote/wcms_742023.pdf "ILO | COVID-19 and the impact on agriculture and food security") the agricultural sector’s capacity to meet demand and provide stable incomes to over one billion people globally in the long-term. Export-oriented agricultural production may also be stressed, impacting multiple levels of the supply chain and local, national, and regional economies. Net food importers [may also come under pressure](https://docs.wfp.org/api/documents/WFP-0000114546/download/?_ga=2.56528875.1148624555.1589293938-251663906.1588772381 "WFP Global Report on Food Crisis"), particularly if their currencies further depreciate against the US dollar. 

Recent gains in gender equality may also be threatened by COVID-19, affecting SDG 5 (Gender Equality). With women likelier to hold insecure jobs in the informal economy and generally earning and saving less, with lower access to social protections, they are [disproportionately more impacted by economic shocks](https://reliefweb.int/sites/reliefweb.int/files/resources/policy-brief-the-impact-of-covid-19-on-women-en.pdf "Policy Brief: The Impact of COVID-19 on Women") and are at a greater risk of suffering from lay-offs. Women’s incomes and labour force participation are thus threatened by the pandemic, while gender-based violence is also rising under lockdown conditions, with the experience of past epidemic scenarios such as Ebola suggesting that the negative impacts on women’s economic livelihoods [are more longer-lasting than with men](https://reliefweb.int/sites/reliefweb.int/files/resources/policy-brief-the-impact-of-covid-19-on-women-en.pdf "Policy Brief: The Impact of COVID-19 on Women"). Women are also likelier to be front-line health workers and health facility service-staff, increasing their exposure to the virus. 

SDGs 7 (Affordable & Clean Energy) and 9 (Industry, Innovation, and Infrastructure) will also be affected by COVID-19. Developing economies already face a dearth of reliable and affordable energy for industrial and domestic uses. If governments make policy-based moves to shore up fossil-fuel plants, or otherwise redirect resources away from investments in renewable energy or boosting access to energy in favour of other near-term priorities, we could lose momentum in realizing SDG 7. For example, [reduced access to electricity](https://www.unescap.org/blog/covid-19-crisis-reinforces-importance-sustainable-energy-transition " COVID-19 Crisis Reinforces The Importance Of The Sustainable Energy Transition") could limit the ability of health centres in developing countries (particularly in rural regions) to provide key services and support frontline health workers. Any reallocation of resources away from sustainable development in favour of near-term GDP growth that slows progress in developing renewable and clean energy technologies could also affect SDG 13 (Climate Action). Finally, COVID-19 has highlighted the need for [disaster-resilient infrastructure](https://www.unescap.org/blog/covid-19-reveals-urgent-need-resilient-infrastructure "Blogs  COVID-19 Reveals Urgent Need For Resilient Infrastructure") to improve the ease of provision of transportation, connectivity and utility services.

In the table below, we present an overview of some of the key impacts of COVID-19 on the SDGs, while offering ideas for how we can begin to build back better for some of the SDGs in the post-pandemic economic reconstruction.  

![Table I](//images.ctfassets.net/4cgqlwde6qy0/31SdZn5zCSZpG1b9g7KIfN/e962af6225326010931527cdc84ec28f/Table_I.jpg)
*(See also: [UN, Shared Responsibility, Global Solidarity](https://unsdg.un.org/sites/default/files/2020-03/SG-Report-Socio-Economic-Impact-of-Covid19.pdf "UN, Shared Responsibility, Global Solidarity"))*



## COVID-19 and Blended Finance

What role, then, can blended finance play in response to the myriad development challenges caused by COVID-19? Convergence [has argued](https://www.convergence.finance/news-and-events/news/dpcDxlUX2UVdIDTt9TjAi/view?utm_source=Convergence-Covid-BF-Blog&utm_medium=website&utm_campaign=COVID-Statement "Blended Finance Responds to COVID-19") that blended finance can play an important role in the short, medium and long term response to the pandemic by accelerating economic reconstruction and improving pandemic resiliency, and by turbocharging our collective efforts towards achieving the SDGs. That is, blended finance must address the issue of risk to get private capital circulating again, scale-up existing approaches and recycle what works, and look to bolster the domestic financial sector to provide much-needed capital and liquidity.  

What are the specific areas in which blended finance can act? Table 1 presented the far-reaching impact of COVID-19 on a range of SDGs. In actuality, the pandemic’s impact cannot be so neatly segmented. The SDGs are interconnected in important ways: firstly, a deficiency in one SDG can cause a deficiency in another, and secondly, the pandemic has caused developments that trigger multiple effects on a range of SDGs simultaneously. For example, riots and violence in countries around the world over the lockdown and severe economic dislocations risk raising countries’ risk premiums, making capital scarcer and more expensive, thereby contracting their economies and affecting a wide range of SDGs at once. 

The key is to get capital circulating again. Therefore, in thinking through the blended finance solutions addressing COVID-19, and on the basis of our conversations with the development community, we have identified a selection of challenges in the real economy, affecting access to finance, which: (i) have worsened in the context of COVID-19, (ii) will affect multiple SDGs simultaneously, and (iii) blended finance can play an important role in countering. While the challenges and solutions presented in Table 2 may appear targeted primarily towards the development community, they each have a possible private sector angle. For example, while a typical international trade finance solution will involve a development finance institution providing guarantees of letters of credit, DFIs have found opportunities to offload some of this exposure to private sector companies (such as insurance companies), drawn to the relatively attractive yield and very low loss rates. We have also included two solutions, donor-supported conditional cash transfers and credit-enhanced COVID-19 bonds, which look to alleviate the difficulties faced by governments lacking the fiscal wherewithal to fund development outcomes or lacking the ability to easily raise financing on the international bond markets. Overall, the challenges and solutions in Table 2 are by no means exhaustive, but they do provide a sense of where development institutions looking to catalyze private investment can begin to focus their efforts in the fight against some of the key impacts of the pandemic. 


![Table II](//images.ctfassets.net/4cgqlwde6qy0/4X2zWKGwhzDQj1ZcmMqGz8/4dc9107ad1b5d415015f7f12bb3db36b/Table_II.jpg)


The good news is that blended finance has created and implemented solutions for all of the challenges listed above. For each category, there are solutions that can mobilize financing in three phases: in the short term over the next 3 months, in the medium term over the next 12 months, and in the long term. One ‘elephant in the room’ challenge in the short term is limited private investor appetite: the large majority of potential cross-border investment will remain on the sidelines in the short term (although networks like the [GIIN’s R3 Coalition](https://thegiin.org/r3coalition "GIIN’s R3 Coalition") are looking to counteract this). The benefit of blended finance here is that it mobilizes private investors across the whole spectrum of investment – real economy companies and financial investors, and domestic, regional and international investors. In addition, multilateral development banks and development finance institutions are [committing](https://www.cgdev.org/tags/multilateral-development-banks "Tag: Multilateral Development Banks"), and have the [financial firepower](https://www.odi.org/publications/16832-all-hands-deck-how-scale-multilateral-financing-face-coronavirus-crisis "All hands on deck: how to scale up multilateral financing to face the Covid-19 crisis") to step up activities in the short term, which can be tapered down as financial investors return in the medium and long term. 

*This blog post, contributed by [Andrew Apampa](https://www.convergence.finance/about/team/6vagDS0aL4cusKnOrWB6o "Andrew Apama | Senior Associate, Content"), is part of a series on COVID-19 and blended finance. Our intention is to follow up this piece with separate analyses of some of the individual challenges mentioned here, providing a practical resource on the specific blended finance solutions that can be leveraged to contribute to the fight against the impacts of COVID-19 in developing countries. The time for [blended finance at scale](https://www.convergence.finance/news-and-events/news/dpcDxlUX2UVdIDTt9TjAi/view?utm_source=Convergence-Covid-BF-Blog&utm_medium=website&utm_campaign=COVID-Statement "Blended Finance Responds to COVID-19") has truly arrived.*


Convergence highlights COVID-19’s impact on the SDG agenda and presents why the challenges facing the real economy are well-conditioned for blended finance solutions.