Toronto, April 20, 2021 – Today, with support and funding from The Government of Australia, Convergence will now be seeking to fund the design of blended finance structures focused on climate mitigation and adaptation through the Indo-Pacific Design Funding window, in addition to gender equality.
With this expanded focus Convergence will look to provide design stage grants of up to USD 350,000 for the development and launch of blended finance structures that enhance private sector investments in climate mitigation and adaptation in the Indo Pacific region. The focus on gender equality remains unchanged, and Convergence will continue to review proposals that make a significant contribution to gender equality outcomes. All proposals funded through this design funding window will align with one or more of the following UN Sustainable Development Goals (SDGs), specifically, SDG 5 (Gender Equality), SDG 7 (Clean Energy), SDG 11 (Sustainable Cities), SDG 12 (Responsible Consumption), SDG 13 (Climate Action), SDG 14 (Life Below Water) and SDG 15 (Life on Land).
The annual investment needs for climate and environment projects in developing countries are estimated by UNCTAD at USD 1.2 - 2 trillion. Despite at least 35% of current development finance and blended finance flows targeting climate action, there is strong consensus that blended finance remains an underutilized tool to mobilize private investment to climate finance in developing countries. While a majority of blended finance for climate action has been targeted towards climate mitigation, the current annual investment gap for climate mitigation is estimated at USD 380-680 billion. Annual climate adaptation costs in developing countries are expected to reach USD 140 - 300 billion by 2030.
“Our partnership with the Government of Australia aims to introduce more investible transactions into the market. With many developing countries being on the frontlines of the climate crisis, we are pleased to create this pathway for innovative structures that will attract capital into climate finance” says Joan Larrea, CEO of Convergence.
Most recently, Convergence awarded a design grant to the Basel Agency for Sustainable Energy (BASE) in partnership with Oxfam in the Pacific for a feasibility study for a remittance-based financing mechanism to improve household infrastructure and resilience in the Pacific Islands. The inaugural grant under this window was to Allotrope Partners, an international clean energy advisory firm specializing in emerging markets and technologies, to explore the feasibility of a blended finance vehicle to advance affordable and clean energy in the Philippines.
Convergence is accepting applications until June 30th for its third application cycle. Preference will be given to proof of concept proposals that can launch within 12 months of receiving the design grant and attract private sector applicants at scale. For climate finance, in particular, Convergence will pay special attention to applications focusing on sustainable and resilient infrastructure, climate-smart agriculture and climate insurance.
Convergence is the global network for blended finance, generating 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 is the only funding program exclusively providing design stage grants for innovative blended finance solutions. Since the establishment of the program, Convergence has awarded nearly USD 7 million in funding to 21 solutions, which have gone on to mobilize over USD 600 million from public, philanthropic, and private investors.
The Indo-Pacific Design Funding window is currently accepting applications until June 30, 2021. Please email [email protected] for any question or visit www.convergence.finance/design-funding for more information about eligibility requirements and application process.
Head of Communications
Convergence Blended Finance
Tel.: +1 647-886-7179