Toronto, November 12, 2019 – Today, we announce that the Australian Government and Convergence have partnered to invest AU$3.5 million in blended finance to meet development challenges in the Indo-Pacific region.
The $3.5 million will be used to create a design funding window for grants to early stage blended finance solutions, over a three-year period.
The Indo-Pacific Design Funding Window focuses on supporting solutions that aim to attract private investment into three focus areas: sustainable and resilient infrastructure, sustainable agriculture and food security, and gender equality. Approximately five to eight grants will be awarded in the three-year period, in an amount up to AU$490,000 for each grant. In the first phase, the funding window will focus on sustainable and resilient infrastructure, followed by the other focus areas.
Blended finance is the use of catalytic capital from public or philanthropic sources to increase private sector investment in developing countries for sustainable development.
By supporting innovative blended finance solutions to get off the ground, the Australian government will draw institutional investors to critical development areas in the Indo-Pacific region, such as infrastructure, gender equality, and agriculture, and ultimately help drive sustainable development in the region. The AU$3.5 million window is expected to catalyze an exponential amount of capital from private, public, and philanthropic investors.
There is no shortage of private capital in, and outside, the Indo-Pacific region. The region has been the fastest-growing asset management market globally in the past five years, accounting for 45% of global inflows over the period, with assets under management at US$16 trillion in 2017. At the same time, the region is home to over 740 million people who still live in extreme poverty.
“This is the latest example of the Australian government’s leadership in blended finance in the region, where it continues to be an important blended finance champion and market builder,” says Joan Larrea, CEO of Convergence. “We are grateful for this partnership, which will be the first step in our strategy to greatly scale our activities in the region and bring to life more effective blended finance vehicles that drive private capital to places that need it most.”
The new window is currently accepting applications, organizations are encouraged to apply here.
Convergence is the global network for blended finance. We generate blended finance data, intelligence, and deal flow to increase private sector investment in developing countries. Convergence has an impressive track record of supporting early-stage blended finance solutions that will attract private sector funding at scale and make long-term impact. Now in its fourth year of operation, Convergence’s existing Design Funding Facility, which is funded by the Government of Canada, is delivering strong results. It has awarded over US$6 million in funding to 18 solutions, which have catalyzed over US$400 million in capital for critical development sectors.
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