Finance in Motion is a global impact asset manager that aims to deliver diversified, risk-mitigated returns with impact. Their financing solutions address climate change, biodiversity loss, and social inequality. Over 20 years they have invested across 44 high-growth economies and have local expertise from Latin America to Eastern Europe.
We spoke with Sylvia Wisniwski, CEO at Finance in Motion, about how they engage in blended finance, their geographic and sectoral foci, impact measurement, how they apply a gender lens in their work, and more.
How do you engage in blended finance?
Blended finance is a core pillar of our approach. We manage and advise tiered alternative investment fund structures where catalytic funding from public or multilateral development bank/development finance institution investors helps de-risk commercial investments, providing an attractive risk-return to institutional investors. This allows us to mobilize significant private capital into emerging markets where financing gaps are largest.
Do you have a specific geographic or sectoral focus when it comes to blended finance?
Our blended finance activities focus solely on emerging markets in Latin America, Africa, Eastern Europe, and the Middle East. From a thematic point of view, we focus on green and social funds. Our green funds invest in climate mitigation and adaptation, biodiversity, sustainable agriculture, and circular economy. Our social funds focus on financial inclusion, supporting micro, small, and medium enterprises (MSMEs) and underserved groups. These are high-impact areas where blended finance can make a measurable difference alongside generating adequate risk-return for investors.
Can you tell us about a specific blended finance deal Finance in Motion was involved in? What were the conditions and were certain instruments used and why?
We manage or advise five private debt funds that are all blended finance vehicles with a total of more than EUR 4 billion in catalytic and private capital. These blended finance funds are evergreen. They are under constant fundraising — and have been very successful in raising private capital.
Instead of de-risking single investments, we use credit enhancement instruments at the portfolio level. Through this approach, we use catalytic funding on a rolling basis as portfolio composition changes over time, maximizing the impact of the first- and second-loss capital. This enables the creation of flagship funds like the European Fund for South-East Europe and the Green for Growth Fund (GGF) which both at present have over EUR 1 billion in assets under management. Around EUR 8 billion has been invested via these two funds alone over the past 15 years.
Let us take a closer look at the GGF. It was initiated by KfW Development Bank and European Investment Bank (EIB) in 2009 with first-loss funding from the European Commission and the German government. International finance institutions like EIB, KfW, European Bank for Reconstruction and Development, Dutch Entrepreneurial Development Bank, and Development Bank of Austria invested senior share capital making it a true “Team Europe” initiative. The International Finance Corporation invested as well. The share capital enabled investments from institutional investors into the fund due to its de-risking effect. With this capital base, GGF creates impact in 19 countries spanning the Western Balkans to the Middle East. GGF offers renewable energy, energy efficiency, and energy security investment opportunities through indirect financing (loans via local partner banks) and direct corporate and project finance.
In addition to the catalytic effects in the capital structure, we have also engaged recently in a guarantee arrangement benefiting the asset side of our funds. We signed an unfunded guarantee with the Swedish International Development Cooperation Agency for the GGF amounting to EUR 60 million to increase the rate of green lending in selected countries of the Western Balkans and the EU Eastern Neighborhood beyond what we could do with first-loss capital. The interesting piece is that we kept the guarantee component outside of the capital stack or fund structure, making operations much simpler and straightforward.
How do you measure the impact and evaluate the success of blended finance transactions?
All our investments must pass through the three lenses of impact, risk, and return. Each fund is guided by an impact framework aligned with global standards like the Operating Principles for Impact Management, the Sustainable Development Goals, International Capital Market Association Green Bond Principles as well as relevant regulations like Sustainable Finance Disclosure Regulation and the EU Taxonomy.
We track metrics aligned to the respective impact objectives pursued per fund, including greenhouse gas emissions avoided, hectares of land under sustainable management, jobs supported, or SMEs financed. Success, of course, is measured not only by direct outcomes but also by systemic change. For example, whether new green market standards are adopted by our investees, or whether investees continue to issue green products beyond our support.
Do you apply a gender lens in your blended finance work?
Gender considerations are mainstreamed across our investment process, particularly for our social funds. For example, the SANAD Fund for MSME actively supports women entrepreneurs through financing and capacity building programs. To inform these investments, we assess gender impact during the due diligence process. We also track gender data, encourage financial institutions to expand services for female clients, and increasingly align our work with the 2X Challenge criteria to ensure women benefit as business owners.
What are some interesting or unexpected challenges or learnings that you’ve had in the blended finance space thus far?
One key learning is that blended finance requires alignment between the expectations of different stakeholders, from catalytic investors focused on impact, additionality, and leverage, to institutional investors seeking risk-adjusted returns. This requires careful structuring of blended finance vehicles and transparent communication.
At the same time, the complexity of many blended finance structures may weigh heavily on operating costs. In view of current fee compression in the asset management industry globally, many blended finance structures can only be financially sustainable if they operate at large scale.
Another challenge is timing. While structuring blended finance instruments and mobilizing catalytic capital needs time, investor needs and capital markets may change quickly. To make both come together at an agreed point in time is an art!
What advice would you give to other organizations looking to enter or scale their efforts in blended finance?
There is a tremendous wealth of literature about different blended finance models. Don't start from scratch, but do proper market intelligence and study the lessons learned from different blended finance models. Recently, Convergence has conducted helpful research in this context through its Scale Private Investment Mobilization Project, listing blended finance models with different purposes.
At the same time, blended finance has substantially changed over the past years. Today, blended finance structures must crowd in private capital at scale right from the start. It is also expected that there is as little blending as possible, while generating much larger leverage compared to old blended finance models. We also observe increasingly a combination of different types of blending instruments, funded first-loss capital combined with unfunded guarantees or several layers of guarantees. Furthermore, there must be proof of additionality and of the “paradigm shift” that catalytic capital enables. This requires sound impact measurement and management systems.
How do you see Finance in Motion’s blended finance activities evolving in the future?
As we wrap up 2025, looking ahead, we expect to deepen our focus on climate and nature finance. Given our geographic focus on emerging markets, catalytic capital will continue to play an important role. Our goal is to mobilize even larger pools of institutional capital by offering products that combine measurable impact with robust risk-return profiles. In short, we see blended finance evolving from niche innovation to mainstream practice and Finance in Motion intends to remain at the forefront of that shift.
