In 2016, the Government of Sweden outlined its new policy framework for Swedish development cooperation and humanitarian assistance, which calls for closer cooperation with the private sector to leverage its vast pools of capital and expertise towards achieving development impact. Since then the Swedish International Development Cooperation Agency (Sida) has started deploying blended finance instruments/approaches, primarily through the Sida Guarantee Instrument.
To promote blended finance and share insights, data, and intelligence, Convergence organized a blended finance knowledge exchange for Sida and affiliated organizations in Stockholm from 28-29 May. The objective of the convening was to (1) Provide participants with practical exposure to blended finance approaches (2) Express the need for and benefit of blended finance as a complement to Official Development Assistance (ODA) grants in achieving the Addis Ababa Action Agenda & the Sustainable Development Goals (SDGs).
The two-day session brought together over 60 Sida staff members and over 25 individuals from allied institutions, such as the Finnish Ministry for Foreign Affairs, the Nordic Development Fund, Swedfund, the Third Swedish National Pension Fund, and the Norwegian Ministry of Foreign Affairs (Norway), amongst others. The event was also attended by over 25 experts from a mélange of development, private sector finance, and non-profit organizations including – Allianz Global Investors, Organization for Economic Co-operation and Development (OECD), African Development Bank (AfDB), G20 Eminent Persons Group, World Economic Forum, and the Dutch Ministry of Foreign Affairs.
The capacity building session was delivered over seven core modules that ranged from understanding how blended finance transactions deploy credit enhancements to deep dives on the WASH and Gender sectors. A deep-dive case study analysis on eight blended finance transactions were also conducted to provide participants with hands on-practical exposure to the mechanics of blended finance solutions.
Participants discussed and deliberated on a range of issues and themes including:
- The availability and supply of private capital to finance the achievement of the SDGs
- Key components and mechanics of a blended finance transaction
- Identifying and scaling the potential of results-based financing
- Characteristics, investment criteria and activities of commercial and fiduciary investors
- The potential of blended finance to attract private sector capital into interventions/projects in the WASH sector
- Approaches and frameworks for mainstreaming gender considerations into blended finance projects/funds
At the end of the two-day session, participants came away with knowledge on how to:
- Design, develop, and implement blended finance solutions in cooperation with the private and philanthropic sector
- Identify key elements of a good blended finance proposal
This knowledge exchange is part of a series of highly-tailored sessions that Convergence offers to influential organizations who want to play a larger role in the ever-changing blended finance landscape. Through these sessions, Convergence aims to bring in sector experts from its own team and from its vast network to support participants in their efforts to arrange and execute higher levels of blended finance transactions. Previous sessions were held at OECD and the African Development Bank (AfDB).