South Asia is one of the fastest growing regions in the world, despite ongoing economic and social challenges. The region has experienced remarkable development success in the past two decades. Despite this success, South Asian countries continue to face major challenges, including high foreign exchange risks, difficult legal and regulatory environments, and low familiarity with blended finance. However, there are also opportunities to increase blended finance in the region, such as creating enabling environment interventions from the government and regulators, using philanthropic capital in a catalytic manner, and using blended finance in climate-focused and social sectors.

The Convergence database has recorded 167 transactions targeting South Asia in part or in full, representing aggregate committed financing of $23.5 billion. This brief analyzes how blended finance approaches have been deployed in South Asia to date and presents insights from industry stakeholders exploring how blended finance can play a role in addressing the challenges in the region.

Blended Finance in South Asia

Convergence