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

When Disaster Strikes: Blended Finance for Humanitarian Crises panel

__When Disaster Strikes: Blended Finance for Humanitarian Crises Wednesday, July 27th, 9am – 11:00am EDT (GMT-4)__

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This seminar will focus on how the gap between the supply of and demand for grant funding is widening as the incidence of  humanitarian crises continues to rise - whether it be due to disease, war or the impacts of climate change. This pressure on donors necessitates an innovative approach if we are to meet this critical need. In this training, we will uncover how blended finance can be applied to crowd-in private capital to help bridge this gap, specifically within humanitarian response and recovery.

Over 2 hours (120 minutes), this interactive seminar will consist of two parts:

1. Part I: A panel discussion amongst global influential leaders in humanitarian response and their proven use of blended finance tools, the challenges and opportunities with this approach. 

2. Part II: Two case study presentations will demonstrate real life examples of investments into humanitarian response.
As always in our member trainings,  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 for humanitarian response. 

*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.*

When Disaster Strikes: Blended Finance for Humanitarian Crises

Blended Finance for Humanitarian Crises

Convergence Eventbrite

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

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 “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 - COMPLETED

'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)__

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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)__

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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

[Aqua for All](https://aquaforall.org/) is a not-for-profit focused on access to clean water and good sanitation in frontier markets in Asia and Africa. In the last two years they started exploring how to use their funding in smarter and more effective ways and move beyond providing one off grants for projects and companies. They now work with social enterprises, financial institutions, and impact investors to accelerate access to finance through blended finance structures both at the enterprise and fund level. Aqua for All has deployed catalytic funding into a range of blended finance structures by providing technical assistance, design stage funding to enable proof of concepts and feasibility of new models, results-based funding i.e. their Social Impact Incentives (SIINC) program, and as first loss or as guarantees in different fund structures. 

We spoke to Shabana Abbas, Innovative Finance Lead at Aqua for All, about their unique Impact-Linked Fund for WASH, how they measure their impact, the gaps and opportunities they see in the blended finance market, and much more. 

__Can you describe a couple of transactions that Aqua for All has been involved in?__

I’ll start with the Water Access Acceleration Fund. It’s a blended equity fund in which Danone is the anchor investor and Incofin Investment Management is the Fund Manager. As one of the investors in the fund, Aqua for All is providing catalytic first loss capital and funding for pre and post investment technical assistance for the investees. At the same time, we're also bringing in the water sector expertise. In short, we are the strategic link for the fund to the water sector players and potential investees. Further, we are facilitating the fund in collating market intelligence and in pipeline development. In this way, we’re trying to ensure that we’re being catalytic through our investments, but also through our technical expertise and experience in the water sector.

The second is our [SIINC program](https://aquaforall.org/siinc-for-wash/). The SIINC model essentially has an outcome funder who provides incentive payments to enterprises for achieving pre-defined and independently verified outcomes. The model is blended as alongside Aqua for All (as the outcome funder) are impact investors or investors also deploying their capital into those enterprises. We have seen that the incentive payments can serve as an additional revenue stream for the enterprises which may help improve their profitability and attract additional investments to scale. Since its launch two years ago, we’ve completed three transactions for aQysta, ATEC*, and KWSH. Now we're scaling the initiative through the recently launched [Impact-Linked Fund for WASH](https://aquaforall.org/ilf-for-wash/) with Roots of Impact, which aims to enable impact enterprises focused on WASH in Africa, Asia, and the Middle East to gain access to suitable and innovative finance. Aqua for All will be the outcome funder in this fund and has also committed funding for targeted technical assistance for service providers as well as enterprises. We think that the water sector is at a very nascent stage of crowding in private capital and therefore with all new approaches and financing structures, there is a need for technical assistance in tandem with the investment funding. 

In summary, when it comes to the blended finance transactions I explained, we’re playing two roles, first is providing de-risking capital, and second is providing outcome funding and technical assistance funding.

__How are SIINCs different from development impact bonds?__

Development impact bonds primarily support government and non-profit interventions whereas SIINC is designed for social enterprises that are ready to scale their impact through mostly for-profit business models. 

The goal of impact bonds in most cases is to de-risk the testing and rolling out of innovative service delivery models by non-profit entities. The goal of SIINC is to mobilize larger impact investments towards the highest impact enterprises and create the concurrent enterprise level incentives for impact. 

Additionally, from a risk perspective, investors involved in impact bonds carry impact risk - often ‘all or nothing’. In SIINC, both investors and companies carry financial and impact risk. Finally, in impact bonds outcome funders are responsible for full cost of intervention plus investor return whereas in SIINC, outcome funders are responsible for marginal payments linked to impact allowing for greater leverage. 

__What is Aqua for All hoping to achieve with its catalytic capital?__ 

We are committed to mobilize more private funding for the sector as the current funding gap is too big to meet SDG 6 targets. At Aqua for All we have three goals in mind before deploying our catalytic funding, first is to improve the risk return profile of investments to mobilize additional private investments into the sector and we do it specifically by taking high risk. Second, as a not-for-profit, we want to ensure that impact is not an afterthought and that additional and deep impact is achieved through our capital. Third, since attaining financial returns is not our primary goal, we can take positions of first loss or provide guarantees, which enables other investors to step in. Finally, we want to contribute towards creating sustainable markets and we’re very aware and conscious to not distort them by offering subsidies or grants in a way that is not strategic or is not addressing the systemic challenges that the sector is facing. 

__How does Aqua for All measure the impact of its blended finance activities?__

We’re focused on the impact and financial additionality of our work. When I say impact additionality, I mean that we are additional in a way where those impacts would otherwise not be achieved if we were not there. The SIINC program is a good example of that, we only provide incentives to companies for things that they would otherwise not be able to do because of possible tensions between improving profitability and achieving deep impact. In terms of financial additionality, we look at whether our funding is able to catalyze more funding. 

__How do you see the blended finance space and Aqua for All’s blended finance activities evolving in the future?__

We anticipate that much more catalytic funding will be needed to de-risk investments in crucial sectors and build capacity of investors and create awareness around blended finance. At the moment as the field is emerging, new actors are interested but they lack understanding of specific sectors and local markets, so there is a lot of work to be done. As a result, we believe there is a greater room for building newer partnerships and synergies between catalytic funders, NGOs, and impact investors. 

We also anticipate that more funds will be set-up in the coming time. In that regard, Aqua for All will be building up on its learnings from its current participations in blended structures before we deploy more capital. We also see that more design stage funding will be required as new innovative structures need to be tested, so we see a role for us there too to provide the required expertise, but also funding and expert support. Finally, we also see that more and more technical assistance will be required to not just prepare the market, but also particularly prepare investees that can benefit from these kinds of blended structures. 

We believe there will be much more demand for blended approaches to address development finance challenges and in that regard the work of Convergence and others can be very helpful for new entrants in the field.

__From the perspective of a non-profit, what gaps or opportunities do you see in the blended finance space?__

In my view, there is a unique opportunity for non-profits operating in the markets to engage with impact investors who may not have the local, frontier markets’ context or experience working with enterprises in specific sectors to bridge the knowledge and expertise gap. When it comes to the blended finance market, I think the funding available at the moment is extremely limited. There is a need to make more catalytic funding available because with limited catalytic funding we can only unlock limited private capital. 

Another challenge but also opportunity lies in building our human talent to accelerate the progress on SDGs. There is a limited pool of talent out there that bring both innovative finance and impact management experience and skill sets. To create and navigate new blended finance structures, we will need professionals that have an understanding of risk return profiles for different kinds of investors as well as ambition to set higher impact goals. We believe that there is a greater opportunity ahead of us to build our future talent and that’s why the work of Convergence is so relevant. 


We spoke to Shabana Abbas, Innovative Finance Lead at Aqua for All, about their unique Impact-Linked Fund for WASH, how they measure their impact, the gaps and opportunities they see in the blended finance market, and much more.

Aqua for All member spotlight with Shabana Abbas 

[Prime Coalition](https://www.primecoalition.org/) is a unique non-profit that provides catalytic capital to address early-stage funding gaps faced by innovative climate technology solutions. 

Prime was founded to address financing gaps that might otherwise prevent market-driven solutions with gigaton scale potential for greenhouse gas emission reduction from achieving meaningful scale. At the earliest stages of company formation, many ventures struggle to attract funding from returns-first investors in the venture capital space for a variety of reasons: their technologies were seen as too risky, too early, too capital intensive, the exit potential too unclear, the timeline too long, etc. In response, Prime looked to harness the tremendous appetite for impact among charitable asset owners that were ready and willing to go beyond grantmaking alone to support these high impact climate technology solutions, using the tools of catalytic capital (recoverable grants and program-related investments) in blended finance transactions. 

Since 2014, Prime has facilitated investments with over 230 philanthropic entities and mobilized over $200 million towards sustainable, effective, and scalable solutions to climate change.

We spoke to Maggie Cutts, Director of Partnerships at Prime Coalition, about the forward-looking impact methodology Prime developed, how their team manages the risks inherent in supporting early-stage ventures, their plans to expand into project finance, and much more. 

__Can you tell us about transactions Prime Coalition has been involved in?__

When we first started we deployed catalytic capital in standalone transactions that brought together charitable investors directly with companies. We funded 10 companies that way, and mobilized around $24 million. We also concretized our investment criteria: 1) Gigaton-scale reduction of greenhouse gas emissions, 2) fit for additionality - meaning it wouldn’t be able to meet its climate impact goals were it not for impact-first support, 3) attractive to follow-on investment from returns-first investors once derisked by catalytic capital. 

In 2018, we launched Prime Impact Fund, a $50 million catalytic fund that closed in 2020 and now has 16 climate ventures in its portfolio from all different sectors. Each one promises at least half a gigaton of CO2-equivalent emissions reduction to the field if it achieves commercial success by 2050.

I’ll tell you about two of the companies supported by the fund. Via Separations is focused on reducing the climate impact of industrial separations, which accounts for 12% of total US energy consumption. Via’s innovation is to replace thermally-driven industrial separations with membrane-driven ones and dramatically reduce energy consumption and attendant emissions in the process. Shreya Dave, Via’s CEO, describes her technology as a strainer to separate spaghetti from boiled water rather than cranking the heat up to boil the water off. We saw the impact in Via’s technology at scale -  potentially eliminating 90% of the energy currently used in thermal separations. And we also saw the lack of attraction by VC investors for many of the reasons mentioned above. Prime contributed catalytic capital in the form of an equity investment in the company’s Series A round and has been a presence in the boardroom since the company’s founding. The company has now secured several pilot projects in the pulp and paper industry, secured an oversubscribed Series B round, and is on track to meet its climate impact targets.  

An example from a different sector in the Prime Impact Fund portfolio is Clean Crop Technologies, which is mitigating climate change in agriculture with their cold plasma technology that degrades pathogens, toxins and pests responsible for food waste. Similar to Via, Clean Crop was having trouble getting over the entrepreneurial valley of death due to the very early stage of the company and technology. Prime Impact Fund led Clean Crop's seed round in 2020; and since then, the company has a commercial deployment planned later this year with one of largest peanut shelling companies in the U.S and has its sights set next on other market applications in seeds, meat, and seafood.

Finally, Prime recently launched Azolla Ventures with the same investment team from Prime Impact Fund. Azolla builds on the same model as Prime Impact Fund, but bolts on a sleeve of non-charitable capital to participate in funding rounds where the company has scaled enough to no longer qualify for additionality – the experiment is that our longer presence in each company’s life will be meaningful to its ultimate social and emissions impacts. In Azolla, we aim to crowd in capital that would not otherwise participate and also safeguard climate impact throughout the life of a company. 

__Prime invests in very early-stage ventures, which is often risky, can you tell us how you navigate this risk?__

I think one of our assets is that the mission-driven capital we mobilize comes to the table with a uniquely high appetite for risk, they can take risks that almost no other source of private or public capital can. As a 501(c)(3), we are empowered to be unapologetically impact-first, above all else. So the the risk appetite is high. It is also true that our catalytic investors are familiar with the grantmaking mindset where there is no expectation of return, any prospect of a return is secondary to the impact we are trying to achieve. 

It’s important to note that while the companies we support are a fit for catalytic capital because of their early stage and high risk, they are not “charity cases:” We believe they can be scalable, self-sustaining businesses and serve as pillars of a low-carbon economy – they just require patient, risk-tolerant capital to begin that journey. This is why returns-first investors frequently follow the rounds that we participate in, once critical de-risking has been achieved. Our venture team would say that they are concessionary on risk, but not on return.

Finally, if we don’t have failures in our portfolio, and so far we have had two out of the 26 companies we’ve supported with investment, then we’re not taking enough risk. If we’re going for the easiest, sure bets, then that’s not the right place for Prime. So, risk is just part of our approach, if we want to tackle climate change, we’ve got to be taking the big risks that no one else can.

__How do you see Prime’s blended finance activities evolving?__

In the last year we’ve been exploring additional capital gaps beyond early-stage venture, and have started substantiating gaps in the missing middle between venture and project finance. When any company reaches the stage where they need to deploy their technology or build their first infrastructure project, they hit what some call the “second valley of death” because they aren’t yet a good fit for traditional finance. So, we’ve spent the last year characterizing that gap and recently released a report on our findings. As we explore how our catalytic investment model might apply to this stage in a company’s life, we will be launching two to three proof-of-concept investments. In each case, we’ll identify where the catalytic capital need is and determine whether we can add value whether it be by educating entrepreneurs on how project finance works, contributing subordinated debt or another type of catalytic intervention in a capital stack, or filling another gap that would help a particular project get off the ground in a way that can be replicated using purely traditional sources of funding. So that’s our next effort. We’re calling it our Early Climate Infrastructure program.

__How do you measure the impact of your blended finance activities?__

Most climate impact tools and services have been designed primarily to assess the past climate impact of a business as it exists today. For early-stage businesses or projects still developing their products and services or with many years left to operate in the field, the process to assess future impact potential is non-standardized and complex.

So, we developed a methodology for assessing the Emissions Reduction Potential (ERP) of early-stage climate ventures, which we’ve made available to the public. [CRANE](https://www.primecoalition.org/programs/crane) launched in 2020 and now has over 2500 registered users. It aims to make the assessment of early-stage companies’ ERP less labor-intensive and more data-driven, transparent, and standardized. This makes it easier for a wide variety of investors, grantors, and entrepreneurs to incorporate climate impact into their own decision-making and monitoring processes. 

Prime has also launched an initiative called [Project Frame](https://projectframe.how/) for the climate investment community to better understand forward-looking climate impact assessment, from building collective glossaries, to coming up with best practices and collective standards. 

We use CRANE and its underlying methodology while assessing companies in our pipeline, and after they join our portfolio, we report back to investors twice a year on the impact milestones that are set for each company and progress made towards emission reduction realized. Prime Coalition conducts an impact audit of all our work across different programs and funding initiatives every 5 years.

__Does Prime apply a gender lens when it comes to its blended finance activities?__

It’s not lost on us that the best way to fight climate change is to empower women and girls and this is in the connective tissue of what we do every day – in fact, 80% of our team are women. For Azolla, we also target a minimum of 1/3 of the companies we fund have founders who are female, or come from underrepresented racial or geographic backgrounds. So, we’re not exclusively seeking companies led by or focused on women, but we do look at the diversity of leadership in portfolio companies and examine how their products and services might affect the communities where physical infrastructure is located. 

__As a non-profit, what are some interesting or unexpected challenges Prime Coalition has had to navigate in the blended finance space?__

We’re looking to make more space in the investment world for the voice of the non-profits to lead the conversation on impact without the distraction/pressure of generating financial returns. We are learning as we go, but it is becoming increasingly clear that the nonprofit voice around decisions related to corporate form and “mission lock” governance matter. We are excited to be building new models and have conviction that our own programs are examples of what we need to truly transform how money is deployed and for what reasons. More concretely, we believe non-profits can inform investment decisionmaking when they are in a position of approving impact reports and auditing or verifying an impact transaction. We believe the nonprofit should drive the substantiation of capital gaps and the design process around filling them, and also work hand in hand with investment managers through construction, fundraising, and implementation of those solutions. In implementation mode, the nonprofit must be at the table with investment managers all along the way, from building the impact and additionality case for initial investments, to management of companies in a direction that leads to impact, and also at exit. Otherwise there’s always a risk that decision makers will revert to the status quo. When there is money to be made, my fear is that impact and additionality considerations will be overlooked unless there are operational dependencies and governance mechanisms in place between investment managers and the nonprofit view. 


Prime Coalition is a unique non-profit that provides catalytic capital to address early-stage funding gaps faced by innovative climate technology solutions. 

Convergence member spotlight with Prime Coalition 

Prime Coalition member spotlight with Maggie Cutts

[https://prod-convergence-public.s3.amazonaws.com/webinars//sifi_edu_event_v2.mp4](https://prod-convergence-public.s3.amazonaws.com/webinars//sifi_edu_event_v2.mp4)

Watch our 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.

Watch the webinar 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 from BlueOrchard and Kaizenvest. 
- Gain insights into how to apply and evaluation criteria

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).

The Window is now open and the first submission deadline is June 30, 2022, learn more [here](https://www.convergence.finance/design-funding/open-window/sdg-impact-finance-initiative-design-funding-window).

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 Window Webinar: Education 

*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.