In partnership with [Roots of Impact](http://www.roots-of-impact.org/) and the [Center for Sustainable Finance and Private Wealth (CSP)](https://www.csp.uzh.ch/en.html) at the University of Zurich this is an actionable, practice-driven executive program.

The program aims at empowering public, philanthropic and private sector funders to collaborate effectively to achieve the Sustainable Development Goals. A special ingredient are solutions that demonstrate how to enable high-impact enterprises with market-based solutions to scale and deliver positive impact in a sustainable way – a bottom-up approach. Our more than 130 IIBF alumni to date come from major organisations across the globe, e.g. UNDP, USAID, SDC/DEZA, GIZ, Global Affairs Canada, IFC, SECO, FAO as well as renowned foundations or NGOs such as UNICEF, Shell Foundation, Aqua for All, Menomadin Foundation, and Refugee Investment Network.

IIBF typically runs as an open program (based upon application) at its home base at the University of Zurich, Switzerland. It is also offered as a client-specific iteration in selected locations (e.g. 2 previous program runs for UNDP Egypt and UNDP Jordan). IIBF was designed and implemented based on the experience of close to 50 in-house trainings offered and held by program partner Roots of Impact since 2017. In addition, it builds on the extensive academic and practical expertise of Convergence and the Center for Sustainable Finance and Private Wealth (CSP).

Impact Investment & Blended Finance Executive Program

This actionable, practice-driven executive program aims at empowering public, philanthropic and private sector funders to collaborate effectively to achieve the Sustainable Development Goals.

Executive program for impact investment and blended finance

Convergence Eventbrite

__Monday June 13, 2022, from 9-10am EST__

---

 “Inside the deal” is our quarterly webinar series where we delve into the inner workings of real blended finance transactions. Each quarter, Convergence features a transaction from our [case study portfolio](https://www.convergence.finance/resource?filters=eyJyZXNvdXJjZUZvbGRlciI6IlJlc291cmNlcyIsImtleXdvcmQiOiIiLCJpbnN0cnVtZW50Rm9jdXMiOltdLCJzZWN0b3JzQW5kU3ViU2VjdG9ycyI6e30sInJlZ2lvbkZvY3VzIjpbXSwidGhlbWVGb2N1cyI6W10sInJlc291cmNlVHlwZSI6WyJDYXNlIFN0dWRpZXMiXSwidGFncyI6W119) and gives members an opportunity to candidly engage with the deal sponsor on their experience structuring the transaction.  

This webinar will focus on the Climate Finance Facility (CFF). The facility was launched in February 2019, to increase private investment into climate-related infrastructure projects in the Southern African Development Community (SADC) region, which faces significant climate mitigation and adaptation challenges. The CFF is a debt facility, and it is the first time the “green bank” model has been applied to an emerging market. The CFF blends public and private capital at the project level, using long term surbordinated debt and credit enhancements such as tenor extensions to draw in private capital at the project level.

This hour-long workshop will include:

- An overview of the facility design, and fundraising experience from the CFF team
- Convergence-led Interview with key stakeholders involved in the transaction to discuss key lessons learned thus far
- Open Q&A with audience

*This member-only, in-depth case-study series  has limited space to ensure a personal, intensive, and practice-driven learning experience. Each Convergence member organization has two complimentary seats to this session.* 

Recommended pre-reading: [Climate Finance Facility Case Study](https://www.convergence.finance/resource/1aa3fac0-c4a5-496b-95d4-2540dc8003b9/view)

Inside the Deal: Climate Finance Facility

Convergence, Climate Finance Facility Case Study, 2019

Case study inside the deal Climate Finance Facility blended finance

__Wednesday, May 25 from 9:00-10:00 AM ET/3:00-4:00 PM CET.__

Join us for this webinar on the [SDG Impact Finance Initiative Design Funding Window](https://www.convergence.finance/design-funding/open-window/sdg-impact-finance-initiative-design-funding-window), with a special focus on SDG 4 – Quality Education. The COVID-19 pandemic has exacerbated existing challenges in achieving SDG 4, and the annual funding gap for education could grow from [$148 billion towards $200 billion](https://www.convergence.finance/resource/4b2ac87a-a562-4da9-98d7-cc8fa1f488fb/view).

The Window awards funding for innovative impact finance solutions that will mobilize private investment for sustainable development in emerging markets and developing economies. In this first call for proposals funding will be awarded to solutions targeting at least one of the following four SDGs: SDG 4 (Quality Education), 8 (Decent Work & Economic Growth), 12 (Responsible Consumption & Production), and 13 (Climate Action).

Register for the webinar today to:
- Learn about the SDG Impact Finance Initiative Design Funding Window
- Learn how the grants will be awarded to support better education outcomes
- Understand the current education finance landscape and how innovative finance can be positioned to support it, including top investors as well as an overview of gaps and opportunities
- Hear about real life examples of impact finance transactions targeting education
- Gain insights into how to apply and evaluation criteria
- Get your questions about the Window answered

__Agenda__

- Introduction to Convergence’s Design Funding program
- Introduction to the SDG Impact Finance Initiative and the current call for proposals for SDG 4 solutions 
- Overview of the education finance landscape
- Examples of impact finance solutions targeting education (details to come)
- Q&A and conclusion

The [SDG Impact Finance Initiative](https://www.convergence.finance/special-initiatives/sdg-impact-finance-initiative) is a unique public-private partnership launched in December 2021 by a consortium of four Swiss organizations - Credit Suisse, UBS Optimus Foundation, the Swiss State Secretariat for Economic Affairs (SECO), and the Swiss Agency for Development and Cooperation (SDC). Convergence is the implementing partner for the Initiative’s inaugural Design Funding Window.

The Design Funding Window is now open and the first submission deadline is June 30, 2022.


SDG Impact Finance Initiative Design Funding Window: Education Finance

Learn about the SDG Impact Finance Initiative Design Funding Window, with a special focus on SDG 4 – Quality Education. Understand the current education finance landscape and how innovative finance can be positioned to support it, including top investors as well as an overview of gaps and opportunities.

SDG Impact Finance Initiative focus on education finance

__Blended Finance for Sustainable Cities and Communities (SDG 11) (Asia/West Coast) Wednesday May 25th 9:00am – 11:30am SGT __

This seminar will focus on how blended finance addresses SDG 11 - Sustainable Cities and Communities.

Over 2.5-hours (150 minutes), this interactive seminar will cover:

The current market demands, rationale, and considerations for deal sponsors as well as investors to leverage blended finance in support of making cities and human settlements inclusive, safe, resilient and sustainable. This session will look at the deeper impact that approaching sustainable development from a local perspective can generate as well as the challenges in financing at a subnational level.

Participants will get an overview of how the development of our global urban centers is critical to achieving the SDGs and how blended finance structures can drive more private sector capital towards supporting sustainable initatives in cities. Participants will be invited to engage directly with the Convergence team as well as expert practitioners in the field to better understand the challenges and opportunities for blended finance investments targeting SDG 11 – Sustainable Cities & Communities.

This is the fourth seminar in our four-part series, “Leveraging Blended Finance to achieve the UN SDGs”.

*The training has limited space to ensure an intensive and practice-driven learning experience. Each Convergence member organization has two complimentary seats in each training, please apply the __discount code__ you received by e-mail. Non-members can register for a fee of USD150.*

Blended Finance for Sustainable Cities and Communities (SDG 11) - SGT

'Blended Finance for Sustainable Cities and Communities (SDG 11) is the fourth training in Convergence's series "Leveraging Blended Finance to achieve the UN SDGs".

Blended Finance for Sustainable Cities and Communities

__Blended Finance for Sustainable Cities and Communities (SDG 11) (Europe/East Coast) Tuesday May 24th 9am – 11:30am EDT __

This seminar will focus on how blended finance addresses SDG 11 - Sustainable Cities and Communities.

Over 2.5-hours (150 minutes), this interactive seminar will cover:

The current market demands, rationale, and considerations for deal sponsors as well as investors to leverage blended finance in support of making cities and human settlements inclusive, safe, resilient and sustainable. This session will look at the deeper impact that approaching sustainable development from a local perspective can generate as well as the challenges in financing at a subnational level.

Participants will get an overview of how the development of our global urban centers is critical to achieving the SDGs and how blended finance structures can drive more private sector capital towards supporting sustainable initiatives in cities. Participants will be invited to engage directly with the Convergence team as well as expert practitioners in the field to better understand the challenges and opportunities for blended finance investments targeting SDG 11 – Sustainable Cities & Communities.

This is the fourth seminar in our four-part series, “Leveraging Blended Finance to achieve the UN SDGs”.

*The training has limited space to ensure an intensive and practice-driven learning experience. Each Convergence member organization has two complimentary seats in each training, please apply the __discount code__ you received by e-mail. Non-members can register for a fee of USD150.*

Blended Finance for Sustainable Cities and Communities (SDG 11) - EDT

__How Blended Finance Supports Sustainable Life on Land (SDG 15) (Asia/West Coast) Wednesday April 27th at 9am – 11:30am SGT __

This seminar will focus on how blended finance addresses SDG 15 – Life on Land.

Over 2.5-hours (150 minutes), this interactive seminar will cover:
- The current market demands, rationale, and considerations for deal sponsors as well as investors to leverage blended finance in support of regenerating and protecting Life on Land.
- Case studies and trend analysis on blended finance transactions that address SDG 15 and how this goal is inter-linked with other SDGs.
- Recommendations and learnings from organisations actively engaged in blended finance transactions aimed at promoting sustainable land use and conservation. 

Participants will get an overview of how concerns about the health of our terrestrial ecosystems are influencing the market and why investors are attracted to innovative blended finance structures to drive more private sector capital towards supporting these initiatives. Participants will be invited to engage directly with the Convergence team as well as expert practitioners in the field to better understand the challenges and opportunities of blended finance investments in this space.
This is the third seminar in our four-part series, “Leveraging Blended Finance to achieve the UN SDGs”.

*The training has limited space to ensure an intensive and practice-driven learning experience. Each Convergence member organization has two complimentary seats in each training, please apply the __discount code__ you received by e-mail. Non-members can register for a fee of USD150.*

How Blended Finance Supports Sustainable Life on Land (SDG 15) - Asia/West Coast

'How Blended Finance Supports Sustainable Life on Land (SDG 15) is the third training in Convergence's series "Leveraging Blended Finance to achieve the UN SDGs".

How Blended Finance Supports Sustainable Life on Land 

__How Blended Finance Supports Sustainable Life on Land (SDG 15) (Europe/East Coast) Tuesday April 26th at 9am – 11:30am EDT __

This seminar will focus on how blended finance addresses SDG 15 – Life on Land.

Over 2.5-hours (150 minutes), this interactive seminar will cover:
- The current market demands, rationale, and considerations for deal sponsors as well as investors to leverage blended finance in support of regenerating and protecting Life on Land.
- Case studies and trend analysis on blended finance transactions that address SDG 15 and how this goal is inter-linked with other SDGs.
- Recommendations and learnings from organisations actively engaged in blended finance transactions aimed at promoting sustainable land use and conservation. 

Participants will get an overview of how concerns about the health of our terrestrial ecosystems are influencing the market and why investors are attracted to innovative blended finance structures to drive more private sector capital towards supporting these initiatives. Participants will be invited to engage directly with the Convergence team as well as expert practitioners in the field to better understand the challenges and opportunities of blended finance investments in this space.
This is the third seminar in our four-part series, “Leveraging Blended Finance to achieve the UN SDGs”.

*The training has limited space to ensure an intensive and practice-driven learning experience. Each Convergence member organization has two complimentary seats in each training, please apply the __discount code__ you received by e-mail. Non-members can register for a fee of USD150.*

How Blended Finance Supports Sustainable Life on Land (SDG 15) - Europe/East Coast

We invite you to join us virtually for the launch of the new SDG Impact Finance Initiative Design Funding Window, which will award grants for innovative impact finance solutions that will mobilize private capital for sustainable development in emerging and frontier markets. This new Window will focus on education, jobs, climate, and responsible consumption/production.

Register for the webinar today to:

- Learn about the SDG Impact Finance Initiative
- Learn about Convergence’s Design Funding Program
- Gain insights into how to apply and evaluation criteria
- Get your questions about the Window answered

The [SDG Impact Finance Initiative](https://www.convergence.finance/special-initiatives/sdg-impact-finance-initiative) is a unique public-private partnership launched in December 2021 by a consortium of four Swiss organizations - Credit Suisse, UBS Optimus Foundation, the Swiss State Secretariat for Economic Affairs (SECO), and the Swiss Agency for Development and Cooperation (SDC). Convergence is the implementing partner for the Initiative’s inaugural Design Funding Window.

The Design Funding Window is now open and the first submission deadline is June 30, 2022. Visit the [Design Funding page](https://www.convergence.finance/design-funding/open-window/sdg-impact-finance-initiative-design-funding-window) to apply.

__Agenda__

Opening remarks – 9:00-9:05 AM ET / 3:00-3:05 PM CET

Introduction to the SDG Impact Finance Initiative – 9:05-9:15 AM ET / 3:05-3:15 PM CET

Introduction to Convergence and Design Funding Program: __Chris Clubb__, Managing Director, Convergence – 9:15-9:20 AM ET / 3:15-3:20 PM CET

Launch of Design Funding call for proposals – 9:20-9:35 AM ET / 3:20-3:35 PM CET

Case study of a Design Funding grantee: __Christina (CJ) Juhasz__, CIO, [Women's World Banking](https://www.womensworldbanking.org/) – 9:35-9:40 AM ET / 3:35-3:40 PM CET

Q&A and conclusion – 9:40-10:00 AM ET / 3:40 PM-4:00 PM CET


Design Funding Window Launch: SDG Impact Finance Initiative

The new SDG Impact Finance Initiative Design Funding Window will award grants for innovative impact finance solutions that will mobilize private capital for sustainable development in emerging and frontier markets

SDG Impact Finance Initiative design funding window launch

__Exploring the Blended Finance and Gender Equality Nexus (Asia/West Coast) Wednesday, March 31st, 9am – 11:30am SGT (GMT+8)__

---

This seminar will focus on how blended finance addresses SDG 5 – Gender Equality. 

Over 2.5-hours (150 minutes), this interactive seminar will cover:

- The current market demands, rationale, and considerations for deal         sponsors as well as investors to leverage blended finance in support       of gender equality.
- Case studies and trend analysis on blended finance transactions that       address SDG 5 and how this goal is inter-linked with other SDGs.
- Recommendations and learnings from organisations actively engaged in       blended finance transactions aimed at promoting awareness around           gender-lens and gender-smart investments in developing countries. 

Participants will get an overview of how considerations around gender are currently impacting the market and why investors are attracted to innovative blended finance structures to drive more private sector capital towards supporting gender equality. Participants will be invited to engage directly with the Convergence team as well as expert practitioners in the field to better understand the challenges and opportunities of blended finance investments in this space. 

This is the second seminar in our four-part series, “Leveraging Blended Finance to achieve the UN SDGs”.

*The training has limited space to ensure an intensive and practice-driven learning experience. Each Convergence member organization has two complimentary seats in each training, please apply the __discount code__ you received by e-mail. Non-members can register for a fee of USD150.*

Exploring the Blended Finance and Gender Equality Nexus (SDG 5) - Asia/West Coast

'Exploring the Blended Finance and Gender Equality Nexus (SDG 5)' is the second training in Convergence's series "Leveraging Blended Finance to achieve the UN SDGs".

Exploring the Blended Finance and Gender Equality Nexus

__Exploring the Blended Finance and Gender Equality Nexus (Europe/East Coast) Wednesday, March 30th, 9am – 11:30am EDT (GMT-4)__

---

This seminar will focus on how blended finance addresses SDG 5 – Gender Equality. 

Over 2.5-hours (150 minutes), this interactive seminar will cover:

- The current market demands, rationale, and considerations for deal         sponsors as well as investors to leverage blended finance in support       of gender equality.
- Case studies and trend analysis on blended finance transactions that       address SDG 5 and how this goal is inter-linked with other SDGs.
- Recommendations and learnings from organisations actively engaged in       blended finance transactions aimed at promoting awareness around           gender-lens and gender-smart investments in developing countries. 

Participants will get an overview of how considerations around gender are currently impacting the market and why investors are attracted to innovative blended finance structures to drive more private sector capital towards supporting gender equality. Participants will be invited to engage directly with the Convergence team as well as expert practitioners in the field to better understand the challenges and opportunities of blended finance investments in this space. 

This is the second seminar in our four-part series, “Leveraging Blended Finance to achieve the UN SDGs”.

*The training has limited space to ensure an intensive and practice-driven learning experience. Each Convergence member organization has two complimentary seats in each training, please apply the __discount code__ you received by e-mail. Non-members can register for a fee of USD150.*

Exploring the Blended Finance and Gender Equality Nexus (SDG 5) - Europe/East Coast

__Tuesday, March 15 2022, 9am – 10am Eastern time:__

---

“Inside the deal” is our quarterly webinar series where we delve into the inner workings of real blended finance transactions. Each quarter, Convergence features a transaction from our [case study portfolio](https://www.convergence.finance/resource?filters=eyJyZXNvdXJjZUZvbGRlciI6IlJlc291cmNlcyIsImtleXdvcmQiOiIiLCJpbnN0cnVtZW50Rm9jdXMiOltdLCJzZWN0b3JzQW5kU3ViU2VjdG9ycyI6e30sInJlZ2lvbkZvY3VzIjpbXSwidGhlbWVGb2N1cyI6W10sInJlc291cmNlVHlwZSI6WyJDYXNlIFN0dWRpZXMiXSwidGFncyI6W119) and gives members an opportunity to candidly engage with the deal sponsor on their experience structuring the transaction.  

This webinar will focus on  the Aceli Africa Facility. The facility was launched in September 2020, to address the mismatch between the risk-return hurdle for lenders and the demand for capital among Agri-SME’s. It is a donor funded facility that has been used to catalyze private sector lending to Agri SME’s, through the use of a first loss cover and financial incentives to local lenders, technical assistance, and a data driven approach to inform policy and review learnings in order to promote market development.

This hour-long workshop will include:

- Overview of the facility design, and fundraising experience from Aceli
- Convergence-led interview with key stakeholders involved in the transaction to discuss key lessons learned thus far
- Open Q&A with audience 

*This member-only, in-depth case-study series  has limited space to ensure a personal, intensive, and practice-driven learning experience. Each Convergence member organization has two complimentary seats to this session.*

Inside the Deal: Aceli Africa Facility

Aceli Africa Case Study, Convergence 2020 (1)

Case study inside the deal aceli africa facility blended finance

__Blended Finance in the Blue Economy (SDG 14) (Asia/West Coast) Tuesday, March 1st, 9am – 11:30am SGT (GMT+8)__

---

Over 2.5 hours, this seminar will focus on how blended finance addresses SDG 14: Life Below Water and will cover:

- The rationale and considerations for deal sponsors and investors to leverage blended finance as a structuring approach in the Blue Economy.

- Case studies and trend analysis on blended finance transactions that address SDG 14.

- Recommendations and learnings from organisations actively engaged in blended finance transactions linked to sustainable initiatives for marine, sea and ocean resources. 

Participants will get an overview of the market interest in the Blue Economy and why investors have been attracted to innovative blended finance structures that drive more investment towards the conservation and sustainable use of the world’s oceans, seas and marine resources. Participants will be invited to engage directly with the Convergence team as well as expert practitioners in the field to better understand the challenges and opportunities of blended finance investments in this space. 

This is the first seminar in our four-part series, “Leveraging Blended Finance to achieve the UN SDGs”.

*The training has limited space to ensure an intensive and practice-driven learning experience. Each Convergence member organization has two complimentary seats in each training, please apply the __discount code__ you received by e-mail. Non-members can register for a fee of USD150.*

Blended Finance in the Blue Economy (SDG 14) (Asia/West Coast)

'Blended Finance in the Blue Economy' is the first training in Convergence's series "Leveraging Blended Finance to achieve the UN SDGs".

Blended Finance in the Blue Economy (SDG 14)

*Toronto, May 18, 2022* – Convergence awards a feasibility study grant to the United Nations Industrial Development Organization (UNIDO) as host of the Private Financing Advisory Network (PFAN), a global program that supports entrepreneurs in developing climate and clean energy projects. This grant will help PFAN develop a results-based financing fund to provide results-based financing to private distributed energy service companies (DESCOs), for co-financing and developing off-grid solar projects in Fiji. This grant is awarded through Convergence’s [Indo-Pacific Design Funding Window](https://www.convergence.finance/design-funding/open-window/indo-pacific-open-window), funded by the Australian Government.

Apart from the limited availability of unsustainable and expensive diesel-generated energy, existing electrification efforts in Fiji for remote communities have been largely concentrated on solar home systems, which are challenging to scale and often unable to meet the energy demands of the local communities. Solar mini and micro-grids offer a scalable and sustainable solution to cater to the unserved energy needs of these remote communities. However, there are limited solar off-grid systems in Fiji due to the lack of flexible financing options for DESCOs, which make it economically unviable for them to undertake projects due to the small project sizes and challenging demographics. 

The grant will enable PFAN to explore the feasibility of structuring a funding mechanism for providing results based financing to DESCOs, who would contribute equity and secure external funding from investors to develop, own, and operate viable projects made up of a combination of solar mini and micro-grids along with solar home systems, to provide affordable and clean energy access, in some cases first-time energy access, to remote communities in Fiji. The funding mechanism, which will be designed together with the Fiji Rural Electrification Fund (FREF), would be complemented by a technical assistance facility which would be managed by PFAN and would aim to support DESCOs in project implementation and refining their business model. 

“We are excited to move to the next stage of the Fund design and are grateful to Convergence and DFAT for making this possible” says Marko van Waveren Hogervorst, PFAN Partnership Manager at UNIDO. “This is an area where PFAN will be able to leverage from our experience and expertise in other markets, and we are looking forward to work on this with FREF and other partners to achieve 100% energy access in Fiji. Experience shows mechanisms such as this offer the opportunity to really get more out of development funding and achieve much greater scale more quickly as well as helping build the local renewable energy sector to support long-term sustainability”.

PFAN will be designing the fund based on a similar model successfully implemented in Africa by the Renewable Energy and Energy Efficiency Partnership (REEEP) that together with UNIDO hosts PFAN, and they will look to adapt it for the Pacific. PFAN’s partner FREF has previously completed a solar mini-grid pilot project in Fiji and will help develop new ownership models for the fund, awarding concessions to DESCOs and helping administer operations of the fund. FREF was constituted by the Government of Fiji under the auspices of the Ministry of Economy and mandated with completing the last mile electrification of Fiji’s remote maritime communities. 

“We’re thrilled to be supporting the design and development of this fund, which uses blended finance to solve an enduring development challenge - bringing electricity access to remote communities. There’s a strong correlation between economic growth and access to stable electricity, which is why the potential of this design to be replicated across other difficult geographies was so attractive to us.” says Joan Larrea, CEO, Convergence. 

__About UNIDO__

The United Nations Industrial Development Organization (UNIDO) is a specialized agency of the United Nations that promotes industrial development, while adhering to the following four strategic objectives: creating shared prosperity, advancing economic competitiveness, safeguarding the environment, and strengthening knowledge and institutions. In the pursuit of its mission, UNIDO supports entrepreneurship and facilitates innovation in low- and middle-income countries, while also ensuring that this enhances their progress towards a low-carbon and climate resilient future.

__About PFAN__

PFAN is a global program comprising of a network of professionals that support entrepreneurs in developing climate and clean energy projects to mobilize financing from private sector investors. PFAN aims to achieve this by originating technically and commercially viable clean energy and climate adaptation projects, supporting their development through coaching provided by its network of in-country financing advisors and technical professionals and facilitating investment through its global investor network. The PFAN program is hosted by UNIDO and REEEP. For more information visit www.pfan.net. 

__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 Indo-Pacific Design Funding Window, funded by the Australian Government, provides grant funding for the design and launch of catalytic blended finance solutions focused on climate finance and/or gender equality in certain countries in the Indo-Pacific region. Please visit Convergence’s [Design Funding page](https://www.convergence.finance/design-funding) for submission deadlines as well as other open windows.

__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/).

__Media Contact__

Sijia Yi 
Head of Communications, Convergence 
Tel.: +1 647-573-5993 
Sijia.yi@convergence.finance

Convergence awards feasibility study grant to UNIDO as host of the Private Financing Advisory Network (PFAN), to help develop a blended fund for co-financing and developing off-grid solar projects in Fiji.

Design Funding grant awarded to support renewable energy

Convergence awards funding to support financing off-grid renewable energy projects in Fiji

*This [op-ed](https://www.devex.com/news/opinion-5-things-that-could-happen-if-blended-finance-scaled-103122) was originally published on [Devex](https://www.devex.com/).*

Last month, finance ministers, central bankers, and philanthropic sector leaders converged in Washington, D.C., for the World Bank Spring Meetings to discuss how to strengthen inclusive economic growth and alleviate poverty. In a time with many reasons to despair, these meetings offered an opportunity to reassess our progress when it comes to sustainable development, take note of obstacles, and chart a way forward.

In light of that, and on an aspirational note, I want to propose a thought experiment to those who participated in the meetings and anyone else engaged in development finance: What would the world look like if blended finance, the use of public and philanthropic funds to mobilize private capital, were to scale? What if blended finance were to realize its promise of mobilizing private sector funds to sustainable development in volumes never before seen — “billions to trillions”?

It’s something that I and my team at Convergence, the global network for blended finance, think about often. Especially following our last[ State of Blended Finance report](https://www.convergence.finance/resource/0bbf487e-d76d-4e84-ba9e-bd6d8cf75ea0/view), which found that like the rest of the global financial system, the blended finance market suffered a major setback during the COVID-19 pandemic. In 2020, blended finance flows dropped [50% to $4.5 billion](https://www.convergence.finance/blended-finance/2021#market-trends).

Here are some of my thoughts on what it would look like if blended finance scaled:

__1. Investors seeking to invest commercially in risky but fast-growing markets will be penalized for not considering the SDGs.__ In other words, if you’re an asset manager and your money needs accompaniment by concessional funds, the providers of that catalytic money will be asking hard questions about impact.

You’ll need to address their questions about why they should be shoring up your proposed investment or risk not having any donor interest in your deal. I expect we’ll see a cost-of-capital advantage for impact-promising transactions, similar to how green bonds currently command a premium to regular bonds.

__2. There will be more transparency around foreign aid.__ We often hear that donors don’t want to work with the private sector because that’s where the corruption and the subdealing is, but in fact, the private sector has many more reporting responsibilities to shareholders, auditors, and regulators than donors often do.

So one, perhaps, unexpected outcome of blended finance scaling is that some aid flows will become more transparent, because the transactions they support will start showing up in companies’ financials. And that could lead to a feedback loop of greater transparency in decision making by donors, at least in their blended transactions.

__3. Competition for catalytic money will build.__ If blended finance becomes business as usual and it is routine to go talk to a donor, then we may get into a situation where investors are pitching to donors, saying, “I know how to use your money better than the next person. This is how working with me will help you deliver on your mission faster, better, over a longer period.” The hope is that we end up having better and more efficient use of aid money because there is competition for it.

__4. There will be a path for [low-income countries](https://www.un.org/development/desa/dpad/least-developed-country-category.html) into international capital markets.__ Maybe all the low- and middle-income countries in the world will end up with ratings, or at least shadow ratings. For instance, we’ll know that it takes 2 dollars of donor capital per dollar raised in one place and only 1 dollar in another place to achieve a credit rating on a bond.

__5. Blended finance could permeate the retail investor market.__ As blended finance transactions become ubiquitous, donors will consider it reasonable and normal to sign onto deals whose primary purpose is to draw retail investors into markets that need developing.

Their development role will acquire another dimension, which is to create a globally connected world in which individual investors get to know faraway places, because money managers can put together risk-appropriate securities for them to buy, and with familiarity, perceived risk drops and so does the cost of capital for businesses in these countries.

These ruminations are not a pipe dream. Institutional investors currently allocate over [$2 trillion](https://www.convergence.finance/resource/1hYbzLsUbAYmS4syyWuqm6/view) — just over 1% of their total assets — to alternative assets in low- and middle-income countries relevant to blended finance. If this amount of private financing could be directed toward the SDGs through blended transactions, it would go a long way to realizing them.

Ultimately, what all of this means is that if blended finance scaled, we would see significantly more capital flow into emerging markets and toward achieving the SDGs, which would alleviate poverty, bolster climate action, and put us all on a more sustainable and resilient path.

The world of finance can feel amorphous and abstract, but the cumulative impacts of these deals are concrete. More capital flowing into a country that needs it means better infrastructure, healthier markets, and more opportunities for employment and entrepreneurship, which will improve the lives of everyone. So, after this look to the horizon, let us forge ahead and hope that some of the musings above can cross into reality.

5 ways development finance could change if blended finance were to realize its promise of mobilizing private sector funds to sustainable development.

What the world would look like if blended finance scaled

Five things that could happen if blended finance scaled

*This [op-ed](https://www.theafricareport.com/193674/how-domestic-investors-can-drive-africas-sustainable-growth/) was originally published on [The Africa Report](https://www.theafricareport.com/).*

We are far from achieving the Sustainable Development Goals (SDGs) after establishing them seven years ago. The OECD estimates that the SDG funding gap has mushroomed to $4.2trn annually from the $2.5trn estimated in 2019. Africa’s annual SDG funding gap alone is estimated to be over $200bn.

Mobilising capital at scale is urgent and the capital is here. Institutional investors in sub-Saharan Africa hold about [$1.9trn in assets](https://www.afdb.org/sites/default/files/documents/publications/wps_no_325_unleashing_the_potential_of_institutional_investors_in_africa_c_rv1.pdf) of which only a percentage is needed to meet the continent’s development goals.

Currently, most of these assets are invested in government securities with only a fraction invested in SDG-tailored investments including alternative investments such as infrastructure. With institutional investors facing risks such as credit risk and the bulk of African economies facing rising inflation rates, domestic institutional investors are having a harder time hitting their return targets.

To build resilient portfolios, they must diversify their investments – and investing in alternatives is one way to do this.

It’s also getting easier. We have observed an upward revision in allowable limits and an expansion of permissible asset classes by regulators. For instance, South African and Kenyan pension funds can allocate up to 10% of their assets to alternative assets. Nigerian pension funds (tier II) can allocate up to 5% of their assets, Namibian pension funds up to 3.5% and Botswanan pension funds up to 2.5%.

These alone add up to an estimated $52bn that is available for direct investments in alternative assets which can contribute to the achievement of the SDGs. This demonstrates the potential impact institutional investors can have towards development.

## Risk Perception
However, institutional investors have long shied away from investing directly into the SDGs and alternative assets, due to associated high perceived risks and a low understanding of the asset class.

Blended finance – the use of catalytic capital from public or philanthropic sources to mobilise private sector investment in sustainable development – addresses some of these perceived risks. Blended finance instruments such as concessional capital and the use of risk mitigation instruments such as guarantees can offset some of the risks and could increase the comfort of private investors to participate in transactions.

Globally, many institutional investors have already participated in blended transactions. Convergence has captured about 150 blended transactions to date that have commitments from at least one institutional investor, representing aggregate committed financing of $4.6bn. Sub-Saharan Africa domiciled institutional investors represent 16% of all the institutional investors that have participated in these blended transactions captured by Convergence. Of the 150 transactions, 46% targeted sub-Saharan Africa and were focussed in the energy sector and generalist private equity funds.

## In action
One of these transactions is Climate Investor One (CIO), an $850m blended vehicle designed to accelerate the development of renewable energy infrastructure projects in emerging markets. The fund is comprised of three inter-linked investment funds – a development fund, a construction equity fund, and a refinancing fund aimed at providing fit-for-purpose financing across the project lifecycle.

The structure of the fund allowed for investors with different risk appetites and return requirements to participate.

Blended finance structures have also facilitated direct investments into infrastructure projects across the region and multiple sectors. One example is [South Africa’s Kouga Wind Farm](https://kougawindfarm.co.za/). The 80MW project received project preparation grants from the Seed Capital Assistance Facility (SCAF) and Inspired Evolution.

These project preparation funds were used to finance engineering studies, environmental assessments, financial modelling, and other general development activities, which increased the bankability of the project. The project crowded in diverse investors including Liberty, Stanlib, and Mergence Investment Managers Ltd.

Achieving the SDGs calls for concerted efforts by all stakeholders towards closing the funding gap.  Blended finance makes it possible for institutional investors to meet their fiduciary duties, build resilient portfolios, and create impact through their investments.

It’s time for African institutional investors to increase their activities towards closing Africa’s SDG funding gap and grab the opportunity presented by blended finance while ensuring their own profitability and resilience.

__Co-authored by [Esther Kenga](https://www.linkedin.com/in/esther-nyota-kenga-781633b3/).__

How institutional investors in sub-Saharan Africa can drive sustainable growth by investing in alternative assets.

Domestic investors in Africa can drive sustainable growth

How domestic investors can drive Africa’s sustainable growth

[https://prod-convergence-public.s3.amazonaws.com/webinars//sifilaunch.mp4](https://prod-convergence-public.s3.amazonaws.com/webinars//sifilaunch.mp4)

Watch the launch of the new [SDG Impact Finance Initiative Design Funding Window](https://www.convergence.finance/design-funding/open-window/sdg-impact-finance-initiative-design-funding-window), which will award grants for innovative impact finance solutions that will mobilize private capital for sustainable development in emerging and frontier markets. This new Window will focus on education, jobs, climate, and responsible consumption/production.

Watch the event to:

- Learn about the [SDG Impact Finance Initiative](https://www.convergence.finance/special-initiatives/sdg-impact-finance-initiative)
- Learn about Convergence’s [Design Funding Program](https://www.convergence.finance/design-funding)
- Gain insights into how to apply to the new Window and evaluation criteria
- Hear former grantee Christina (CJ) Juhasz, CIO, of Women's World Banking, on their experience with Convergence's Design Funding program and how it supported the design of [Women's World Banking Capital Partners Fund II](https://www.convergence.finance/design-funding/grant-portfolio/5CSvs9Xs76MgQygE2cOke2/view)

The SDG Impact Finance Initiative is a unique public-private partnership launched in December 2021 by a consortium of four Swiss organizations - Credit Suisse, UBS Optimus Foundation, the Swiss State Secretariat for Economic Affairs (SECO), and the Swiss Agency for Development and Cooperation (SDC). Convergence is the implementing partner for the Initiative’s inaugural Design Funding Window.

The Design Funding Window is now open and the first submission deadline is June 30, 2022. Find out how to apply [here](https://www.convergence.finance/design-funding/open-window/sdg-impact-finance-initiative-design-funding-window). 

Go to our [Design Funding](https://www.convergence.finance/design-funding) page to learn more, and see our other open windows. 

Watch the launch of this new Design Funding Window focused on education, jobs, climate, and responsible consumption/production.

SDG Impact Finance Initiative Design Funding Window Launch

Launch recording: SDG Impact Finance Initiative Design Funding Window

[Energise Africa ](https://www.energiseafrica.com/about)is a unique impact investing platform that enables everyday people (retail investors) to invest in renewable energy companies operating in Sub-Saharan Africa. Retail investors provide these companies with access to vital working capital, that isn’t currently available from traditional lenders, so they can provide Pay-as-you-go solar power to customers that wouldn’t otherwise be able to afford it. 

To date, Energise Africa has mobilised 29 million pounds in investment  from a mix of over 4,000 UK-based individual investors and governments and foundations, including UKAID, Good Energies Foundation, and Partnerships for Green Growth (P4G). These institutional funders provide concessional funding that is (and will be) blended in a number of ways, including partial guarantees, currency hedging and subordinated debt – this innovative blending makes the products Energise Africa offers its investees more attractive in terms of the ticket size, the flexible and affordable nature of the finance that they can get, and the currency that they can get it in.  
We spoke to Lisa Ashford, CEO of Energise Africa, about the potential of retail investors in blended finance, how they navigate FX risk, measure impact, and much more. 

__Can you describe blended finance transactions or products that Energise Africa has been involved in?__

The first example I’d look at  includes funding that UKAID has provided. What we did as part of the approach was look at first loss and match funding predominantly going into individual investment campaigns of between 10 and 50% of the total campaign size. We considered how this could have a leveraging effect in terms of crowding in additional investment form retail investors.

In particular one of the businesses that we chose match funding for is Sollatek, who are based in Kenya. Sollatek tend to install bigger solar systems for schools and clinics. So we took an experimental approach to work out the optimal way to add the match funding . For example we tested adding the match funding on  an incremental basis as individual investments are made and adding it in at specific  times – start/middle/end to drive campaigns forward to their target before the campaign close. We worked with Energy for Impact looking at the data from these campaigns to see how we could make maximum impact with the matchfunding. 

This process demonstrated to solar businesses that crowd investment can be used with confidence and that they can have certainty that the working capital they need can be delivered within the right timeframes. Using this approach of blending institutional and retail investment has proved to businesses that this type finance is a very legitimate part of their overall financing mix.

The other example is where we created a guarantee for new investors with support from the Good Energies Foundation. We now guarantee capital for first investments up to 100 pounds. This means that in the situation that an investee is not able to make repayments and goes into default, then a pool of capital that has been set aside specifically for this purpose will be utilised to make the repayment to each new investor up to £100. We found that this investor guarantee really gave people the confidence to take that first step and invest.  As a result of this success, Transforming Energy Access (a program run by UKAID and their Crowd Power Programme) helped the roll out of this scheme across other platforms. For us it was great to see that the guarantee had an impact and that other providers could replicate it and provide other retail investors across different markets in Europe with the confidence to start investing in similar schemes. 

__How does Energise Africa measure the impact of its blended finance activities?__

From a blended finance perspective, we’re looking at the leverage rate, what money are we deploying from public and philanthropic sources and what is that bringing in. At the moment we have a leverage rate of around 1 to 6, so for every pound we’re spending of public funds, we’re raising an additional 6 pounds from the crowd. The other metric we look at is our ability to revolve that money over a given period. So how many times can the public money be recycled over and over again.

Of course we also look at impact on the ground, such as how many people have gained access to clean energy (850,000 people since we started in 2017). We also look at household income, because access to energy is associated with increases in productivity as well as the ability to set up small businesses, and we’ve estimated that as a result of clean energy access additional household incomes increased by 22 million dollars. We also look at how many smallholders and MSMEs have benefitted (~8000) and tonnes of CO2 mitigated (~180,000 tonnes annually). Finally, we look at our ability to lend to organisations, the number of organisations we’ve lent to, and the geographical spread of the investees - in the number of different countries where we have managed to provide finance.

__How do you see Energise Africa’s blended finance activities evolving in the future? __

We want to expand what we’re doing beyond Sub-Saharan Africa and to other sectors, and to do that we’ll of course need blended finance. Now that we’ve shown how this model really works and is underpinning growth in the solar sector, we want to replicate it and apply it to new sustainable sectors and new geographies.

We also really want to scale up the amount of financing coming from retail investors – people powered finance. There is appetite among retail investors across the UK and Europe, and if every UK and EU retail investor increased their investment into SDG and climate-focused investments by 1.7%, we would be able to bridge the SDG funding gap, so the potential to scale is huge. 

So, our plans over the next five years are ambitious, but achievable, especially since one of the big missing pieces to blended finance is obviously deploying high impact, high risk capital on the ground, and that’s where we’re seeing our value add, working with our local networks to really get that capital deployed in quite a granular way.

__How does Energise Africa navigate FX risks?__

We are working with the Currency Exchange Fund (TCX) to mitigate FX risk, we’ve actually worked with them through Lendahand (our joint venture partner) to deploy the first local currency blending for the Cedi (Ghanaian currency). TCX is also a great example of blended finance, because they use another government source to underwrite the kind of risk associated with that FX hedging. 

In addition, with support from Good Energies Foundation, we are also looking to launch our first fully hedged US dollar transaction this year, where, because of Good Energies’ involvement, there’s no FX risk to the borrower and there’s no FX risk to the retail investor. We’re undertaking this transaction because US dollar lending is often critical in certain sectors, such as clean energy. 

__What gaps and opportunities do you see in the blended finance market?__

What we want to see is donors being more flexible about the different kind of mechanisms that can be deployed from a blended finance perspective, such as partial guarantees or setting up a credit default pool, or looking at retail investors as a really legitimate and scalable solution. From a UK context, charities and philanthropics also sometimes struggle with the idea of an organisation that they’re involved in not being a charity or NGO, but profit for purpose organisations such as ours can be instrumental in scaling sustainable solutions to the SDGs. So again, what we want to see is donors being pragmatic and looking at what’s needed and trying to be flexible around their approach, especially when it comes to blended finance.


We spoke to Lisa Ashford, CEO of Energise Africa, about the potential of retail investors in blended finance, how they navigate FX risk, measure impact, and much more. 

An interview with Lisa Ashford of Energise Africa

Member Spotlight with Lisa Ashford, CEO of Energise Africa 

- SDG Impact Finance Initiative calls for proposals focusing on education, jobs, climate and responsible consumption/production
- Global blended finance network Convergence kicks off first round of proposals, seeking innovative financial solutions in support of the SDGs
- SDG Impact Finance Initiative aims to mobilize up to 1 billion Swiss francs in private capital by 2030 for innovative, impact finance projects

*Zurich, Bern, and Toronto, March 22, 2022* – The SDG Impact Finance Initiative, a Swiss public-private partnership, announced its first call for proposals, preparing to award grants for innovative impact finance solutions that will mobilize private capital for sustainable development in emerging and frontier markets. 

The launch comes three months after Switzerland’s State Secretariat for Economic Affairs (SECO), UBS Optimus Foundation, Credit Suisse Foundation and the Swiss Agency for Development and Cooperation (SDC) launched the Initiative, aiming to mobilize up to one billion Swiss francs in private capital by 2030 to advance measurable impact in developing countries. 

In the first major step forward, the SDG Impact Finance Initiative partnered with the global blended finance network Convergence to open a Design Funding Window to receive and evaluate proposals. This first call for proposals will focus on solutions that target SDG 4 (Quality Education), SDG 8 (Decent Work and Economic Growth), SDG 12 (Responsible Consumption and Production), and SDG 13 (Climate Action). The second call, set for later in 2022, will expand to other SDGs.

The need to mobilize private sector capital in support of the 17 United Nations SDGs has never been more urgent. The SDG investment gap continues to grow, climate action appears to be stalling, and the negative long-range effects of COVID-19 disproportionately hurt the countries and populations that can least afford it.

“This mission is more important than ever as the initiative opens its doors to innovative projects that will support education, jobs, and climate protection. Philanthropic and public capital can pave the way for private investors to finance initiatives with strong social and environmental impact. We aim to fund new ideas, pilot concepts, and de-risk financial structures while maintaining a strict focus on measurable impact,” says Dhun Davar, Head of Social Finance at UBS Optimus Foundation.

To attract private capital to sustainable development, the initiative aims to accelerate advancements in the impact investing market by supporting the launch of innovative solutions that address market failures, deploy financial products that are under-supplied or supplied at insufficient volumes, and mobilize funding into new sectors and regions. 

The SDG Impact Finance Initiative will award feasibility study grants, ranging from USD 50,000 to USD 500,000. The Design Funding Window is now open and the first submission deadline is June 30, 2022.

“This call for proposals will ultimately lead to new and better high impact financial vehicles revitalizing a market burdened up to now by high design and setup costs. We hope to receive many innovative and collaborative ideas that can generate a significant, measurable impact in developing countries and mobilize private investment at scale,” says Liliana de Sá Kirchknopf, Head of Private Sector Development at SECO.

__About the SDG Impact Finance Initiative__ 

The [SDG Impact Finance Initiative](https://www.convergence.finance/special-initiatives/sdg-impact-finance-initiative) supports the development and scaling of innovative finance solutions that mobilize private capital and contribute to measurable results in line with the SDGs in developing countries. The initiative strengthens the impact finance ecosystem globally as a public-private partnership founded by SECO, UBS Optimus Foundation, Credit Suisse Foundation and the Swiss Agency for Development and Cooperation. The initiative aims to deploy 100 million Swiss francs of catalytic funding to mobilize 1 billion Swiss francs of private capital to the SDGs by 2030. 

__About Convergence and the Design Funding Program__

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. Convergence’s [Design Funding program](https://www.convergence.finance/design-funding) offers a 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. To date, Convergence’s existing windows have awarded over 8 million US dollars in grant funding, which has raised over 1.5 billion US dollars of additional capital.

__Media Contacts__

Sijia Yi 
Head of Communications, Convergence 
Tel.: +1 647-573-5993 
Sijia.yi@convergence.finance

Thomas Atkins 
Senior Media Advisor, UBS 
Tel.: +41 44 235 1593 
thomas.atkins@ubs.com

Yanik Schubiger 
Media Relations, Credit Suisse 
Tel.: +41 44 332 16 87 
yanik.schubiger@credit-suisse.com

Lorenz Jakob 
Information Officer, SECO 
Tel.: +41 58 468 60 56 
lorenz.jakob@seco.admin.ch

SDG Impact Finance Initiative and Convergence announced its first call for proposals, preparing to award grants for innovative impact finance solutions that will mobilize private capital for sustainable development in emerging and frontier markets. 

New window awards grants for impact finance solutions

Swiss public-private partnership opens doors to projects mobilizing investment for the SDGs 

On International Women’s Day, it’s time to take stock of the achievements to advance gender equality to date; understand what new challenges have arisen; and chart a course forward for the year ahead to fuel the momentum of systematic gender-lens investing. 

Over the past few years, we’ve witnessed [gender equality coming to the fore](https://www.convergence.finance/news-and-events/news/1RzMCTVtshipW87WMKExXw/view) in blended finance, evolving from a “nice-to-have” component of blended structures to an element increasingly integrated into transactions’ legal architecture. However, more attention is needed on the intersection of gender with other global goals. This includes the critical link between gender and climate change.

__Blended finance and the climate-gender nexus__

Women disproportionately contend with the consequences of climate change. Overrepresentation in the informal sector limits income stability and leaves women more exposed to the effects of extreme weather events. 

Addressing gender equality has been considered one of the most effective, yet overlooked, ways of combating climate change. Research conducted by Plan International in Bangladesh and Ethiopia asked girls what would best help them deal with the impacts of climate change. They expressed three clear priorities: greater access to education to enhance their ability to adapt to and reduce climate risks; greater protection from gender-based violence, in response to climate disasters, including child labor, early marriage, and sexual violence; and greater participation in climate adaptation decision-making activities.

Adopting a gender lens when designing and financing climate solutions not only addresses the unique way climate change impacts women. It can also be a gateway to achieving additional benefits for the wider population, [by unlocking new investment opportunities](https://www.convergence.finance/resource/e720084e-fcfe-4de3-a249-fe46ceafc571/view) for example. However, the importance of gender equality for climate action is yet to be concretely reflected in the actions of investors. Since 2015, 18% of blended climate finance transactions have been aligned with SDG 5 (Gender Equality), mobilizing an aggregate total of ~$2.8 billion in commitments (figure below). This accounts for just 7% of all blended capital directed towards climate outcomes. Furthermore, just over 21% of climate transactions measure impact on a gender disaggregated basis. Convergence finds that about one-quarter (22%) of blended climate finance deals had integrated some gender-lens component into the overall transaction structure, while over 75% of transactions featured no gender-focused elements at all.

![Figure 1 IWD Blog](//images.ctfassets.net/4cgqlwde6qy0/5EKZNeObXvv7GkmSrEniOg/1e059313a49f0113d1b33c9530318aba/image001.png)

__Unlocking private capital for gender-smart climate finance__

The window to bridge the climate-gender financing gap is rapidly closing. On February 28, 2022, the Intergovernmental Panel on Climate Change (IPCC) scientists, in their latest Report, found that [about half of the measures previously believed to be critical to limiting key climate risks](https://www.ipcc.ch/report/ar6/wg2/resources/press/press-release/) are “no longer an option”. Climate change risks are highest and will be experienced more immediately in low- and least-developed countries, where many women are already facing extreme poverty and marginalization. The consequences of delaying a much-needed injection of climate financing into these emerging markets could be dire for women and girls.

We have previously highlighted the critical role of [donor agencies and multilaterals as vanguards of gender mainstreaming in blended finance](https://www.convergence.finance/news-and-events/news/1RzMCTVtshipW87WMKExXw/view). As the primary suppliers of concessional capital, these players must apply a more systematic approach to catalyzing private sector capital to climate opportunities with an intentional gender lens – governments and multilateral climate funds/programmes accounted for only 18% and 21% of total commitments to blended climate deals between 2018-2020, down from 20% and 23% in 2015-2017 respectively (between 2015-2020, the blended finance market also saw a gradual overall decline in annual blended climate finance flows). This is particularly salient in the adaptation finance space because women are often involved in activities such as resource and water management and agriculture, which are extremely vulnerable to environmental shocks. Gender-smart investment has the capacity to unlock capital and financial products like climate insurance for women to improve their ability to adapt.

Through its Feminist International Assistance Policy, Canada has become a leader in addressing the intersection of gender and climate. At COP 26, the [Government of Canada announced](https://www.convergence.finance/news-and-events/news/1Xu89AZazbxnLOYt8KxJoJ/view) that it would double its climate commitments to $5.3 billion over the next five years, with 80% of investment targeting gender equality. More pledges like this, as well as the creation of special purpose financing windows prioritizing the climate-gender nexus, are necessary to identify innovative and commercially feasible high-impact opportunities, and channel investment to them. Recently, Convergence, alongside the Government of Canada, launched a CAD$5 million [Gender-Responsive Climate Finance Design Funding window](https://www.convergence.finance/design-funding/open-window/gender-responsive-climate-finance-window) that will award grants to develop new blended finance solutions that address both climate and gender, and draw in private sector investment at scale.

__Build upon solid foundations__

Blended finance has so far demonstrated itself to be a promising approach to address the climate and gender funding gap, offering ways to structure deals that are uniquely tailored to specific contexts, such as those included in the Design Funding window mentioned above. However, scaling gender-smart climate finance requires simultaneous efforts focused on replicating proven transaction models. For example, Impact Investment Exchange (IIX), an impact investor focused on improving women’s access to financial markets in developing countries and issuer of the Women’s Livelihood Bond Series (WLB), [recently listed its fourth bond, Women’s Livelihood Bond 4 Climate (WLB4Climate)](https://iixglobal.com/impact-investment-exchange-lists-us30-million-womens-livelihood-bondtm-for-climate-on-the-singapore-exchange-supporting-500000-underserved-women-and-girls-in-asia-through-building-resilie/), which is the first targeting the promotion of climate-resilient lending to underserved women in Asia. Listed on the Singapore Exchange, the Women’s Livelihood Bond for Climate will increase the availability of climate-related financial products for women business owners, via local financial intermediaries. WLB4Climate leverages the experience of IIX’s previous three listings that generated substantial interest from an assortment of investor types and cumulatively raised nearly $50 million for equitable access to finance in Asia, to ramp up investment for gender-lens climate lending.

Gender inequality and climate change are undoubtedly two of the prevailing challenges of our time. It’s time for investors across the public, private, and philanthropic sectors to realize the opportunity blended finance presents to pursue these twin goals simultaneously, because a sustainable future does not exist without gender equality. 

Taking stock of the achievements to advance gender equality to date; understanding what new challenges have arisen; and charting a course forward for the year ahead to fuel the momentum of systematic gender-lens investing.

Blended finance for gender equality

Blended Climate Finance must address gender equality

Since launching at the end of 2021, [IMFact](https://imfact.co.ke/), a fintech company that uses factoring to provide working capital to underserved micro, small and medium enterprises (MSMEs), has secured a £3m investment (~US$ 4 million) from FSD Africa Investments (FSDAi), the investing arm of FSD Africa. This new anchor investment makes it possible for IMFact to expand operations from Kenya to the rest of the region.

Convergence [awarded IMFact](https://www.convergence.finance/news-and-events/news/6JZ3PVDeRyAdGHh6t7S8PI/view) (originally SHIFT Kenya) a [Design Funding](https://www.convergence.finance/design-funding) grant in 2019 through our Global Emerging Markets Design Funding Window, to develop a blended finance solution aimed at increasing access to finance for healthcare SMEs in Kenya.

Since then, IMFact has expanded outside of healthcare to other sectors in Kenya, providing access to finance for MSMEs through their factoring method, which makes it possible for MSMEs to receive upfront cash for unpaid invoices, providing them with immediate access to working capital to buy new inventory, pay suppliers, and grow their businesses.

“We were excited about funding IMFact because of its potential to be scaled and replicated in other sectors and countries outside of healthcare and Kenya. Now, two years since our grant, IMFact has done just that and shown the potential success and replicability of a thoughtful blended finance solution,” says Joan Larrea, CEO at Convergence.

“I’m very pleased say that the design funding grant provided from Convergence to IMFact has made a significant positive impact in initiating our operations. It has helped us pave the way for further capital investors, including debt, which will support further deployment of capital to our fast-growing list of clients. Our team is excited to expand our operations in Kenya for 2022 and we are happy to have Convergence as a supportive partner in our efforts,” says Nico de Nijs, CEO at IMFact.

IMFact, a fintech company that uses factoring to provide working capital, has secured an anchor investment that will make it possible for them to expand operations.

IMFact secures funding and plans expansion

Following launch, Convergence supported IMFact secures additional funding and eyes expansion

*This [op-ed](https://impactalpha.com/want-to-launch-a-deal-matchmaking-platform-read-this-first/) was originally published on [Impact Alpha](https://impactalpha.com/).*

It’s 2022 and COVID-19 continues to ravage populations and disrupt economies worldwide. The annual Sustainable Development Goal funding gap has increased from $2.5 trillion to $4.2 trillion. And we are no closer to reaching our global climate goals.

We need the deep pockets of private investors in order to get even remotely close to solving these problems. And we need public and philanthropic players to work strategically to attract private investors to co-invest in blended finance deals.

But how do these different investors find each other or identify specific opportunities? 

Several impact investing and blended finance [deal matchmaking platforms](https://impactfinance.network/#introduction) were launched a few years ago that aimed to address that – Convergence’s included.

Convergence’s platform, launched in 2017 to bring investors together on blended finance deals, is one of the few deal matchmaking platforms still standing. More than 150 deals have been posted on the platform, around 30% of which have raised financial commitments after being listed. The deals that reached financial close represent about $4 billion of commitments.

As it’s more urgent than ever to bring investors together to put money into deals that support sustainable development, we have reflected on the key challenges we’ve faced and are sharing lessons learned from operating such a platform, while also [learning from those who came before us](https://www.fastcompany.com/40519467/this-impact-investing-platform-was-set-to-be-a-game-changer-so-why-did-it-fail). *Here are five takeaways:*

__1. Platforms must be led by a neutral, trustworthy, market observer with an established reputation.__ It requires time and runway for an organization to position itself in the market as a credible and trusted network. Convergence has managed to build credibility with those seeking to get involved in blended finance through the breadth of what we do, including data aggregation, capacity building, grant making and market building. The role we play as a deal facilitator works only because it is informed by everything else we do.

__2. Business models matter.__ When it comes to longevity, financial sustainability cannot be ignored. The question of whether to pursue a fully fee-based model, operate as a non-profit reliant on donor funding, or take a hybrid approach gives rise to the inherent tension that impact platforms face. Should they be a trusted network that investors who have paid to be there turn to habitually for pipeline? Or should they be funded by a third party and be open, inclusive and accessible to all new and interested participants? 

These two issues are mutually exclusive. The fee-based model is more attractive to investors for the exclusivity it offers. After all, investing is a relationship business where an investor’s deal sourcing function is often its ‘secret sauce’ and justification for its own fees. The challenge is that accessing a deal platform is not yet a typical part of an investor’s comprehensive origination process, making fully fee-based revenue models difficult to pull off. 

The free-and-open model is more attractive to donors, for reasons of equity. But without any curation of dealflow or vetting of participants, it will draw little investor interest.

Convergence uses a hybrid funding approach paired with a tightly curated deal platform. We charge a single membership fee for the entirety of our offerings, of which the platform is one component. The fee creates discipline: Members who pay will make greater use of the services, and it forces Convergence to be responsive to the needs of the field to keep members on board. We pair that revenue stream with donor funding that supports our overall business model, including its many public-good elements.

__3. There is no such thing as passive matchmaking.__ Successful platforms require either large volumes of data and activity where meaningful, statistically significant behavior patterns persist, or they require human intervention and a deep grasp of users’ needs and interests. Investors can’t be expected to just log on and find each other. 

A niche market like blended finance does not have a high volume of standardized, fast-closing transactions generating big data. So, Convergence adopts a high-touch, relationship manager approach where we work closely with both supply and demand-side stakeholders – that is, capital providers, to understand the types of capital they are able to deploy, and capital seekers, to get a good grip on their capital needs and blended finance approach. 

We also aim to bolster the use of our platform by connecting it to our convening and capacity building work, reinforcing an active matching approach.

__4. Regulatory and compliance regimes for deal platforms in most jurisdictions are complex and time consuming to navigate.__ Matchmaking tends to trigger regulatory issues even if the party leading it intends it as a public good. This can come as a surprise to the platform’s host. Legal advice to gain approvals to operate be costly and strain mission-oriented organizations, as can the associated internal protocols necessary to adhere to regulatory rules and restrictions.

__5. Skepticism of platforms persists.__ There is a strong stigma attached to listing a deal on a platform to connect with potential investors or accessing a platform to identify opportunities. Behavior change and greater incentives for capital providers to transparently engage on platforms are required to attract widespread buy-in and increase uptake across sectors.

## Where do we go from here?

The decision to develop and build a matchmaking platform of any kind should not be taken lightly. Such platforms require significant capacity and should be integrated into and informed by other pieces of an organization’s activities. However, in our case, operating a platform has ultimately helped us gain a deeper understanding of the true challenges and barriers that stand between us and the [blended finance market’s ability to reach scale](https://www.convergence.finance/blended-finance/2021).

Looking at our data going back to the 1990s, only about 50 investors have made 15 or more financial commitments to blended deals. This high concentration of activity among a few organizations, along with the lack of a deliberate approach from catalytic capital providers to attract and mobilize private capital at scale, signal that the key challenges holding blended finance back are structural in nature and will require a hands on, strategic approach from the most critical stakeholders in blended finance.

If we are going to achieve the Sustainable Development Goals or meet the 1.5-degree-Celsius global warming target, we must all become more transparent, willing to collaborate with new players, and be open minded about new ways to do business and identify opportunities. If anything has become clear to us while operating our deal matchmaking platform, it’s that no single organization alone can build and create a well-functioning market.

Reflecting on key challenges and sharing lessons learned from operating a deal matchmaking platform, while also learning from those who came before us. Here are five takeaways for building a platform.

5 Takeaways for Launching a Deal Matchmaking Platform

Want to launch a deal matchmaking platform? Read this first.

*February 10, 2022* – Convergence Blended Finance, with funding from the Good Energies Foundation, will launch a Climate-Smart Forest Economy Investor Collaborative Pilot. The Pilot aims to increase investor awareness and interest in transactions focused on supporting interventions and ventures that could help unlock the full climate potential of forests and forest products by ensuring that investors coordinate to maximise all the available climate functions of forest value chains (sequestration, storage, substitution).

The Investor Collaborative (IC) will be made up of a working group of up to 15-20 investors who are all interested in and well-positioned to direct investments into ‘Climate-Smart’ forest economies. Concretely, the pilot will involve undertaking and developing a series of networking, education, and capacity building sessions for participating investors that will be transaction oriented and curated to increase awareness and interest amongst these select investors.

The objective of the pilot is twofold, 1) to build awareness with investors of opportunities across Climate-Smart forest economy value chains and to support them in origination, and 2) to test whether such an investor collaborative is a suitable solution to increase investments into Climate-Smart forest economies; with the ultimate objective of sustainably unlocking the full climate potential of forests and forest products.

Although headway is being made with a recognition of the role that forest value chains could play in decarbonizing the built environment and in improving carbon capture and storage in landscapes, significant gaps persist that prevent scaled and coordinated investments that could work in unison to maximise the carbon sink, storage and substitution functions of forest value chains. Specifically, for developing geographies, gaps persist in the early part of the forest value chain where know-how, incentives for sustainable forest management, tree nurseries and reforestation investments are frequently missing. As market demand for timber [continues to rise](https://www.fortunebusinessinsights.com/cross-laminated-timber-clt-market-102884), such investments into carefully considered [nature-based climate solutions](https://nature4climate.org/news/economic-growth-and-climate-solution-think-wood/) in forests could, in turn, encourage increased investor interest in associated manufacturing and construction industries to absorb a welcomed demand for sustainably sourced and produced wood products.

Financial investment, based on sound carbon modelling and safeguards, is fundamental to the success of a climate-smart forest economy and to increase reforestation, as capital from investors could be used to leverage improved forest management and create new forests as well as funding cutting-edge technologies, R&D, and more traditional investments into manufacturing, real estate, and recipients of forest products. 

Convergence will draw upon its experience convening working groups such as i) its partnership with the UK Foreign, Commonwealth & Development Office (FCDO) to convene the [COP 26 Blended Finance Platform](https://www.convergence.finance/news-and-events/news/8UshDGgK0Vo3p1yyRNlVB/view) in the lead up to COP 26, and 2) the [Scale Working Group](https://www.convergence.finance/special-initiatives/scale-blended-finance) with USAID, that brings together leading ministries, development agencies, and philanthropic foundations to identify and support a series of blended finance vehicles that can achieve scale.

Further, Convergence has built expertise in natural capital specifically through its [Design Funding](https://www.convergence.finance/design-funding) program which has increasingly focused on market-based blended finance structures for climate and nature-based solutions. 

__About Good Energies Foundation__

[Good Energies Foundation](https://www.goodenergies.org/who-we-are/about-us/) is a Swiss-based private foundation. It was established in 2007 as an integral part of Good Energies Inc., a private equity company specialised in investing in the renewable energy and energy-efficiency industries. It works in partnership with Porticus, the international organisation that manages and develops the philanthropic programmes of charitable entities established by Brenninkmeijer family entrepreneurs.

__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.

Convergence Blended Finance and the Good Energies Foundation have launched a Climate-Smart Forest Economy Investor Collaborative Pilot to increase investor awareness and interest in transactions in the forest economy

Convergence & Good Energies Foundation forest economy pilot

Convergence launches pilot to mobilize private investment into forest economy in partnership with Good Energies Foundation

*Network Voices is a series where Convergence amplifies blended finance opinions and activities from our network - this op-ed was originally published in our [State of Blended Finance 2021 report](https://www.convergence.finance/resource/0bbf487e-d76d-4e84-ba9e-bd6d8cf75ea0/view).*

*By Rael McNally, Senior Portfolio Manager, Global Renewable Power, BlackRock, and Freek Spoorenberg, Global Head of Product Strategy & Investor Relations, Infrastructure Equity, BlackRock*

There has never been a better time to invest in climate infrastructure. Governments are embracing policies that encourage climate investment, creating measures to keep global warming under two degrees Celsius. Conversations among investors are centered around the opportunities that this transition will create. It is the largest cohesive, intentional, reshaping of the global economy ever attempted, and the scale and pace of that reshaping touches every country and market sector. The transition to a net zero economy presents a historic investment opportunity requiring at least $50 trillion in funding over the next 30 years. This enormous amount of capital cannot be met by public monies or development finance institutions alone.  Private investors have a key role to play.

To achieve the transition to a net zero economy, at least in the first instance, we need to be more innovative and creative in finding ways to bring public-private partnerships to bear on these issues. Partnering with international public financial institutions to help reduce or mitigate some of the idiosyncratic risks of investing in emerging markets is critical to support low-carbon investments at scale. As Blackrock CEO Larry Fink stated in his speech at the Venice International Conference on Climate: “If we don’t have international institutions providing that kind of first-loss position at a greater scale than they do today, properly overseeing these investments, and bringing down the cost of financing and the cost of equity, we’re just not going to be able to attract the private capital necessary for the energy transition in the emerging markets.”

According to Bloomberg NEF, almost 80% of emissions in the next decades will come from developing countries. And those same vulnerable communities and developing nations are those most exposed to the harmful impacts of climate change - as well as being home to more than half of the global population.  Working together, we can reduce the climate’s impact on the poor, reduce forced displacement, while creating new markets for the private sector. 

We need a cohesive global approach that spans both the private and public sectors, with each side defining their sector-specific pathways to net zero and their intersection with one another. 

The Climate Finance Partnership (CFP) is a prime example of our work as part of this effort. Together with the governments of France, Germany, and Japan as well as several leading U.S. impact organizations, we have created a unique blended finance fund structure that seeks to help de-risk the opportunity set in emerging markets for institutional investors. In this case, participating governments and philanthropic institutions subordinate their initial economics to provide downside risk and return protection to the private fund investors, who receive an outsized share of fund outperformance. 

This type of public-private partnership and first-loss protection will, we believe, further incentivize private investors to participate in what is expected to be the fastest growing infrastructure investment opportunity of the coming decades, one they might otherwise not consider due to perceived risks. CFP’s blended finance structure is designed to “crowd in” institutional-quality private capital at scale. 

Our partnership with these leading development financial institutions has seen CFP gather strong interest at the highest levels in organizations and has resonated, top-down, thanks to our French, German, and Japanese partners’ advocacy for the strategy. Having started capital raising at the start of 2021, the Fund hit 75% of its $500 million fundraising target, on 30 September, with 15 distinct investors, across a wide range of investor groups, backing the partnership. Given demand, CFP is now pulling its final close forward as it is oversubscribed and will be closed in less than 9 months since the institutional fundraising launch.

As we look back on our fundraising journey, one of the most important lessons learned when it comes to mobilizing finance (public and private) into emerging markets, is the need to have an open discussion on the risks and opportunities in these regions and share experiences. Education is needed, across both governments and institutional capital, on the benefits of public-private partnership, of symbiotic blended finance structures, the investment fundamentals present in emerging markets clean infrastructure, as well as the potential benefits of being a first mover in this space.

With investors seeking more sustainable investments, greater impact from their investments, and a just transition, we believe the level of dialogue and investor education on what is needed to achieve those objectives needs to increase. A just transition isn’t simply about expanding investors’ knowledge and understanding about climate change, it speaks to their shareholders’ values, sense of place, and a collective responsibility. 

The scale of this historic investment opportunity requires creative, collaborative thinking, and partnership across governments, DFIs, private and other investors and market participants and we are excited to be able to share our experiences at the outset of this exciting journey.  


BlackRock on blended finance partnerships for climate action. 

Blended finance for climate action 

Network voices: Moving from Ambition to Action - A Call for Stronger Public and Private Partnerships 

As we move into the third year of the “Decade of Action”, the need to mobilize private sector capital has never been more urgent: the SDG funding gap is growing, climate action stalls, and COVID 19 continues to ravage populations and devastate economies worldwide. At the same time, current blended finance flows [are not on track ](https://www.convergence.finance/resource/0bbf487e-d76d-4e84-ba9e-bd6d8cf75ea0/view)to achieve the billions to trillions agenda. 

What does this mean as we head into 2022? Below we highlight five blended finance trends to watch in 2022, including a number of positive initiatives on the horizon:

__1. Institutional investors are coming to the table – and concessional capital providers must rise to the occasion__

As noted in our [State of Blended Finance 2021 report](https://www.convergence.finance/resource/0bbf487e-d76d-4e84-ba9e-bd6d8cf75ea0/view), the blended finance market is yet to realize the full potential of the private sector in closing the SDG financing gap, with institutional investors continuing to represent a smaller segment of blended finance flows (13% of private sector commitments between 2018-2020). However, we are seeing more coordinated action from institutional investors, particularly in climate finance. Most recently, COP26 saw the pioneering [Glasgow Financial Alliance for Net Zero (GFANZ)](https://www.gfanzero.com/), a global coalition of leading financial institutions, including banks and asset managers, who have committed over $130 trillion of capital to achieving net zero emissions by 2050. The Alliance will include existing initiatives such as the UN-convened Net Zero Asset Alliance, which represents 67 institutional investors including Allianz, Swiss Re, and Caisse des Depots. 

To realize the full potential of this capital towards climate finance in developing countries, blended finance will serve as an important catalyst. As noted by BlackRock CEO Larry Fink, [mobilizing $1 trillion in private climate finance will require at least $100 billion in grants and subsidies](https://www.forbes.com/sites/prakashdolsak/2021/10/14/larry-fink-wants-100-billion-for-decarbonization-aid-we-are-not-persuaded/?sh=c5e4d38383c5). Convergence will be [collaborating](https://www.convergence.finance/news-and-events/news/4zl4xKS2wVPz2bj41AtlFc/view) with the Net Zero Asset Owner Alliance in 2022 to: i) increase the Alliance members’ access to development finance and blended finance transactions seeking private investment, (ii) increase direct collaboration between the Alliance members and the official development finance community, and (iii) realize the intersecting recommendations of the Scaling Blended Finance discussion paper and the Climate Finance Delivery Plan.

__2. Climate finance will continue to represent a significant market for blended finance, including adaptation activities__

According to the Climate Policy Initiative, global adaptation finance [increased](https://www.climatepolicyinitiative.org/wp-content/uploads/2021/10/Global-Landscape-of-Climate-Finance-2021.pdf) to $46 billion in 2019-20 from $30 billion in 2017-18, but is still nowhere near meeting the estimated needs of $180 billion per year through to 2030. In contrast, financing for climate change mitigation reached $571 billion in 2019-20. Similarly, most climate blended finance deals have [targeted](https://www.convergence.finance/news-and-events/news/1P8MUFqc76fri3if4NvG17/view) climate mitigation; specifically, renewable energy (43% of climate transactions) and energy efficiency (20%). Meanwhile, climate adaptation has not been highly targeted by blended transactions, with sub-sectors like sustainable agriculture being targeted by only 8% of climate transactions.

However, there are promising [signs](https://www.convergence.finance/news-and-events/news/1P8MUFqc76fri3if4NvG17/view) that blended finance is having more success in mobilizing capital towards adaptation. Convergence has observed uptake in several adaptation finance sub-sectors since 2018, such as in climate-smart agriculture and land and marine resource management. For example, one of the earliest blended solutions supported by Convergence’s Design Funding program, the [$364 million Blue Bond for Ocean Conservation](https://www.convergence.finance/news-and-events/news/53nMkbseHrNo8CBK9Um1U1/view), recently reached a financial close, making it the world’s largest marine-focused debt conversion to date. Backed by the Nature Conservancy, Credit Suisse, the Government of Belize, and the U.S. International Development Finance Corporation (DFC), the bond will allocate capital towards debt sustainability and marine conservation for Belize.

__3. As the COVID-19 pandemic enters its third year, pressure will grow on MDBs and DFIs to play a more active role in mobilizing private capital at scale__

The OECD [estimates](https://www.oecd.org/development/global-outlook-on-financing-for-sustainable-development-2021-e3c30a9a-en.htm) that the annual SDG financing gap has risen from $2.5 trillion to $4.2 trillion, due to pandemic-related financing needs and a drop in external private resources. With concessional commitments from MDBs and DFIs to blended transactions [remaining constan](https://www.convergence.finance/resource/0bbf487e-d76d-4e84-ba9e-bd6d8cf75ea0/view)t over the past 5 years, pressure will grow on MDBs and DFIs to leverage and mobilise greater volumes of private sector resources in 2022, consistent with their development additionality and financial additionality mandates. 

__4. In response to the ongoing effects of the pandemic, health transactions will continue to gain momentum in 2022__

While blended finance has been less deployed in health for[ various reasons](https://www.convergence.finance/resource/4b2ac87a-a562-4da9-98d7-cc8fa1f488fb/view), we’re likely to see a [continued upturn](https://www.convergence.finance/resource/0bbf487e-d76d-4e84-ba9e-bd6d8cf75ea0/view) in blended transactions targeting health in 2022 in response to the pandemic. Recent examples include the [Indonesian Resilience Fund (IRF)](https://en.prnasia.com/releases/apac/impact-credit-solutions-and-bank-central-asia-partner-to-offer-financing-to-the-indonesian-healthcare-sector-334827.shtml), launched to support Indonesia’s healthcare sector in response to the pandemic and supported by investors like USAID, DFC, and Australian DFAT; and BlueOrchard’s [COVID-19 Emerging and Frontier Markets MSME Support Fund](https://www.blueorchard.com/second-closing-of-blueorchards-covid-19-support-fund-completed-at-over-usd-200m/), which achieved a second close of over $200 million in 2021, backed by investors like IDB Invest, CDC, DFC, and the Japan International Cooperation Agency. Similarly, the prioritization among both donors and private investors to keep small businesses afloat in the context of the COVID-19 pandemic suggests that micro-, small-, and medium-sized businesses (MSMEs) and small and growing businesses (SGBs) will continue to absorb the lion’s share of blended capital, [with nearly 50% ](https://www.convergence.finance/resource/0bbf487e-d76d-4e84-ba9e-bd6d8cf75ea0/view)of all transactions between 2018-20 directly targeting one or both groups. 

__5. Rising global interest rates will make the de-risking blended finance provides more compelling, attracting local institutional investors seeking diversification and adjusted market conditions__

Despite their superior understanding of local investment landscapes and their ability to invest in local currency, numerous factors have [hindered](https://www.convergence.finance/resource/0bbf487e-d76d-4e84-ba9e-bd6d8cf75ea0/view) the mobilization of local institutional investors into blended finance at scale, such as regulatory limits and their unfamiliarity with alternative asset classes. However, rising global interest rates will increase the attractiveness of the de-risking that blended finance can provide, attracting local institutional investors seeking diversification and adjusted market conditions. 

Recent examples of local institutional investors coordinating within the space include the [Kenya Pension Funds Investment Consortium (KEPFIC)](https://www.convergence.finance/resource/0bbf487e-d76d-4e84-ba9e-bd6d8cf75ea0/view), a consortium of Kenyan retirement funds launched in 2020 and [supported ](https://ke.usembassy.gov/united-states-announces-new-kenyan-pension-consortium-to-mobilize-investment-in-large-scale-infrastructure-projects/)by the US government through USAID’s Kenya Investment Mechanism, Power Africa, the World Bank Group, and MiDA Advisors (in partnership with USAID INVEST). The consortium looks to collaborate on making sustainable long-term infrastructure and alternative asset investments in the region, [building](https://kepfic.co.ke/about-us/) the infrastructure investment capacity of member funds and the institutional investment ecosystem in Kenya as a whole.


In this blog we highlight four blended finance trends to watch in 2022, including a number of positive initiatives on the horizon