Blended Finance in the Least Developed Countries

05 November 2018 - New York

Three years after the adoption of the Addis Ababa Action Agenda and the 2030 Agenda for Sustainable Development, there is a consensus that public and private finance will both be needed—at scale—to meet the SDGs. Blended finance is receiving increasing attention for its potential to maximize the catalytic impact of concessional finance by sharing risks or lowering costs to adjust risk–return profiles for private investors. This works to crowd in private or commercial capital for SDG-related investments that would otherwise be overlooked.

Still, to date there has been limited evidence of where, how, why, and in which sectors blended approaches are being deployed in LDCs; what are the opportunities and challenges with blended strategies; and under which conditions blended finance is best applied.

The report ‘Blended Finance in the Least Developed Countries’ - prepared by UNCDF in collaboration with the Organisation for Economic Co-operation and Development, Southern Voice on Post-MDG International Development Goals, Convergence and the United Nations Foundation - aims to help fill in these gaps.

Through a rich evidence base, data analysis, and detailed case studies, the report explores how to implement and adapt blended finance approaches to LDCs to maximize their effectiveness in crowding in private capital while minimizing risks. The report also proposes an Action Agenda to guide decision-makers in their blended finance approaches.