Media Development Investment Fund (MDIF) is a not-for-profit fund that provides affordable debt, equity, and quasi-equity financing as well as technical assistance to independent media companies in countries where the free press is under threat. MDIF was initially established in 1995 to support media companies in Europe transitioning from communist systems to free markets. MDIF has quickly expanded to provide financing to media businesses around the world. To fund these activities, MDIF has raised a blend of concessional and commercial capital through multiple fit-for-purpose instruments, including two innovative investment note products. Most recently, MDIF has launched a series of blended finance debt and equity funds that leverage first-loss capital, as well as a partial guarantee on the debt fund.
As of December 31, 2019, MDIF has provided more than $172 million in financing and technical assistance grants to 115 independent media companies, primarily small and medium enterprises (SMEs), across 40 countries. As the only global investment fund for independent news media, MDIF presents several insights for others considering blended finance in the media sector – or in other sectors that face significant investment barriers:
- While blended finance is not a panacea for financing the SDGs, it can still support private sector development for less commonly targeted SDGs
- Fit-for-purpose vehicles can be used to unlock specific pools of investment capital
- It can be difficult for ‘first-time fund managers’ to raise commercial capital – even those with a relevant track record
- The larger ticket sizes required to attract investors can be challenging to reconcile with impactful investment sizes
- Blended finance offers a unique opportunity to align incentives for development impact and financial returns