This report investigates blended finance trends across the overall market in 2024, including investor and deal trends.

It is divided into four parts:

- Part I: Market Overview 

- Part II: Deal Trends 

- Part III: Investor Trends 

- Part IV: Taking Stock of Efforts to Scale: 
1. Lack of a Private Sector Mobilization Strategy and  Action Plan
2. Local Investment in Blended Finance is Underrepresented
3. Lack of Transparency on Blended Finance Activity
4. The Ecosystem for Blended Finance Remains Underdeveloped

Convergence State of Blended Finance 2025

This report investigates blended finance trends across the overall market in 2024, including investor and deal trends. It also assesses the progress made over the past five years across the key challenges that blended finance faces, including the lack of private sector mobilization strategies amongst most donors and the need for greater levels of local capital mobilization.

State of Blended Finance 2025, blended finance, state of blended finance

State of Blended Finance 2025

With its continued focus on climate, this year’s report arrives at a pivotal moment in global
efforts to combat climate change and achieve the Sustainable Development Goals (SDGs). This edition unveils a complex landscape of opportunities and challenges, emphasizing the role of blended finance in mobilizing private capital for climate initiatives, particularly in Emerging Markets and Developing Economies (EMDEs).

In PART 1 of the report, blended finance data and insights provide:
- A market overview.
- A look back at previous findings.
- An assessment of the macroeconomic context.
The climate blended finance market rebounded significantly from the previous year’s downturn
despite global macroeconomic challenges. The market saw an increase in large-scale transactions,
with six deals exceeding $1 billion. This upward trend reflects growing private sector interest in climate mitigation and adaptation efforts.

In PARTS 2 AND 3, climate data, deal trends, and investor trends are presented through various lenses including climate themes and archetypes. Data findings are further divided across vehicle type, geographic region and country, country income level, recipients, and SDG alignment. Investor trends focus on investor activity and investor type and incorporate stakeholder
perspectives of key market participants engaging in climate blended finance.

PART 4 provides a contrasting view of climate themes broken down into mitigation, adaptation,
nature-based solutions, and cross-cutting climate transactions. Climate finance remains heavily
focused on mitigation efforts while adaptation finance continues to be underfunded. Nature-based
solutions (NbS) and cross-cutting initiatives, which address both mitigation and adaptation, are gaining traction as investors recognize the potential for these projects to generate both environmental and financial returns. The section also highlights the emerging importance of gender-responsive climate finance in driving inclusive outcomes.

PART 5 explores the pivotal role of NDCs in driving climate action at the national level. As countries update their NDCs with more ambitious targets for 2030 and beyond, the integration of blended finance within these frameworks becomes even more crucial for achieving climate goals. Case studies from Rwanda, Belize, and Indonesia are presented and illustrate how blended finance has been leveraged to support NDC implementation, particularly in renewable energy and conservation finance. The section points out both gaps and recommendations to improve the quality and detail of NDC roadmaps.

In PART 6 the report concludes that while the climate blended finance market has made significant progress, critical gaps remain, particularly in adaptation finance and the mobilization of private capital for climate resilience projects. Key recommendations are offered on the role blended finance can play in driving private investments at scale while identifying the appropriate solutions in developing regions.

State of Blended Finance 2024 Climate Edition

With its continued focus on climate, this year’s report arrives at a pivotal moment in global
efforts to combat climate change and achieve the Sustainable Development Goals (SDGs). This edition unveils a complex landscape of opportunities and challenges, emphasizing the role of blended finance in mobilizing private capital for climate initiatives, particularly in Emerging Markets and Developing Economies (EMDEs).

State of Blended Finance 2024: Climate Edition

Convergence’s State of Blended Finance reports—published since 2017—focus on blended finance activities that mobilize private investment to emerging markets and developing economies (EMDEs). With this April 2024 edition, Convergence marks a new annual two-report cycle. Early each year, Convergence will release an edition of the State of Blended Finance report that provides analysis and insights on the entire blended finance market, including blended finance activity across sectors, regions, investors, investment structures, development impact generation, and more.

In PART I we present a data snapshot of the overall blended finance market. Convergence has recorded 1,123 blended finance transactions, with a total investment of $213 billion.

In PART II, we explore some of the key regulations facing large-scale commercial investors when investing in blended finance vehicles, considering
the implications to blended finance posed by regulatory frameworks such as the Basel Accords (including the final implementation of Basel III from
January 2023) and EU legislation on securitization and state aid. We also explore the perspective of supervisors and regulators on blended finance,
and identify the following recommendations to address some of the regulatory hurdles blended finance faces.

In PART III, we delve into transparency in blended finance, breaking down the methodological differences underlying blended finance data and market trends from different data providers, namely, the OECD, DFI Joint Working Group on Blended Concessional Finance, and Convergence. We also consider non-blended investment activity that has been enabled by blended finance structures. Here we present the following recommendations for boosting transparency in blended finance.

In PART IV, we present a breakdown of key data trends across five sectors: agriculture, energy, financial services, health and education, and non-energy infrastructure. The deal analysis for each sector is broken down by vehicle, blending archetype, sub-sector, region, SDG alignment, and recipients, while the investor trends focus on investor activity and investor type.

In PART V, we provide seven points of action that address the opportunity areas observed in this report,  aiming to equip stakeholders with a robust framework, enabling
them to effectively navigate the landscape of blended
finance and fully leverage its capacity as an instrument
for sustainable development.

State of Blended Finance Spring 2024 v2

State of Blended Finance 2024, blended finance, state of blended finance

State of Blended Finance 2024

A edição deste ano do State of Blended Finance centra-se mais uma vez no clima. As alterações climáticas continuam a ser fundamentais para o mercado de Blended Finance e para o desenvolvimento sustentável em geral.

Na PARTE I do relatório, os dados e insights do Blended Finance fornecem uma visão geral do mercado com uma retrospectiva do relatório do ano passado e uma avaliação dos desafios atuais, impactos macroeconômicos e choques exógenos que moldaram igualmente o mercado mais amplo de financiamento climático, e o Blended Finance para o clima Esta seção também analisa as recentes recessões no investimento sustentável e aponta oportunidades específicas em que o financiamento misto pode servir como um mecanismo ativo para responder aos desafios globais que têm um impacto negativo nos fluxos de financiamento.

Nas PARTES II e III, são apresentados dados climáticos, tendências de negócios e tendências de investidores. As tendências do financiamento misto climático são analisadas através de três lentes:
1.	Blended Finance para mitigação;
2.	Blended Finance para adaptação; e
3.	Blended Finance híbrido.

Eles são ainda subdivididos por tipo de veículo, região geográfica e país, nível de renda do país, destinatários, alinhamento dos ODS e arquétipos e instrumentos. As tendências dos investidores centram-se na atividade e no tipo de investidor e incorporam as perspectivas das partes interessadas dos principais intervenientes no mercado envolvidos no Blended Finance climático.

A PARTE IV fornece uma análise comparativa do Blended Finance para mitigação e das transações de Blended Finance para adaptação, analisando e contrastando tipos de negócios e investidores, abordando desafios e barreiras fundamentais para catalisar o capital privado e revelando soluções, oportunidades e casos de negócios viáveis para expansão. As soluções baseadas na natureza são destacadas juntamente com os desafios e oportunidades de financiamento associados. A disparidade entre o Blended Finance para mitigação e adaptação é mais explorada através de entrevistas com as principais partes interessadas e especialistas na área.

A PARTE V explora plataformas a nível nacional no Blended Finance para o clima e avalia as Parcerias para uma Transição Energética Justa (JETPs), como um modelo de parceria para mobilizar o Blended Finance para o clima. Os JETPs são analisados e comparados através de entrevistas com as partes interessadas que identificam pontos fortes, desafios, oportunidades e recomendações.

AS PARTES VI e VII destacam as principais áreas onde o Blended Finance pode contribuir e oferecem recomendações específicas sobre o papel que o Blended Finance para o clima pode desempenhar na promoção de investimentos privados em grande escala, ao mesmo tempo que identifica as arquiteturas de Blended Finance adequadas nas regiões em desenvolvimento.

POR State of Blended Finance 2023 Draft4

A edição deste ano do State of Blended Finance centra-se mais uma vez no clima. As alterações climáticas continuam a ser fundamentais para o mercado de Blended Finance e para o desenvolvimento sustentável em geral.

State of Blended Finance 2023, climate blended finance, state of blended finance, portuguese

State of Blended Finance 2023 (Portuguese)

This year’s edition of the State of Blended Finance once again focuses on climate. Climate change continues to be central to the blended finance market and to sustainable development more broadly.

In PART I of the report, blended finance data and insights provide a market overview with a look back to last year’s report and an assessment of the current challenges, macroeconomic impacts, and exogenous shocks that have equally shaped the broader climate finance market and the climate-related blended finance market. This section also reviews recent downturns in sustainable investment and points at specific opportunities where blended finance can serve as an active mechanism to respond to the global challenges that adversely impact funding flows.

In PARTS II & III, climate data, deal trends, and investor trends are presented. Climate blended finance trends are analyzed through three lenses:
1. mitigation blended finance;
2. adaptation blended finance; and
3. hybrid blended finance.

They are further broken down across vehicle type, geographic region and country, country income level, recipients, SDG alignment, and archetype
and instruments. Investor trends focus on investor activity and investor type and incorporate stakeholder perspectives of key market participants engaging in climate blended finance.

PART IV provides a comparative breakdown of mitigation blended finance and adaptation blended finance transactions by analyzing and contrasting deal and investor types, addressing fundamental challenges and barriers to catalyzing private capital, and revealing solutions, opportunities, and viable business cases for scaling. Nature-based Solutions are highlighted along with associated funding challenges and opportunities. The disparity between mitigation and adaptation blended finance is further explored through key stakeholder interviews with experts in the field.

PART V explores country-level platforms in climate blended finance and evaluates Just Energy Transition Partnerships (JETPs), as a partnership model for mobilizing climate blended finance. JETPs are analyzed and compared through stakeholder interviews that identify strengths, challenges, opportunities, and recommendations.

PARTS VI & VII highlight key areas where blended finance can contribute and offer specific recommendations on the role climate blended finance can play in driving private investments at scale while identifying the appropriate blended finance architectures in developing regions.

State of Blended Finance 2023 Draft-7

State of Blended Finance 2023, climate blended finance, state of blended finance

State of Blended Finance 2023

This year’s edition of the State of Blended Finance will feature a thematic focus, for the first time, on blended finance for climate. This theme was chosen for a couple of reasons. Firstly, climate change is a central focus of the blended finance market and a major development issue: two-thirds of blended finance commitments over the past three years and 33% of Official Development Assistance (ODA) in 2020 targeted climate-related investments. Secondly, and closely linked, the topic of climate finance is a core priority for private investors, as purported by their ESG strategies and increasingly through commitments to achieving a Net Zero transition. Therefore, climate aligned Sustainable Development Goals (SDGs) will continue to be a focus of private investors compared to other SDGs.

In PART I of the report, blended finance data and insights provide a market overview with a look back to last year’s report and an assessment of the current challenges, macroeconomic impacts, and exogenous shocks that have equally shaped the broader climate finance market and the climate-related blended finance market. This section reviews recent downturns in sustainable investment and points at opportunities where blended finance can serve as an active mechanism to respond to the global challenges that adversely impact funding flows. 

In PARTS II & III, climate data and investor trends are presented. Climate blended finance trends are analyzed through three lenses;
mitigation blended finance;adaptation blended finance; and hybrid mitigation-adaptation blended finance. They are further broken down across vehicle type, geographic region and country, country income level, end beneficiaries, SDG alignment, and archetype and instruments. Investor trends focus on investor activity and investor type and incorporate stakeholder perspectives of key market participants engaging in climate blended finance.

PART IV provides a comparative breakdown of mitigation blended finance and adaptation blended finance transactions by analyzing and contrasting deal and investor types, addressing fundamental challenges and barriers to catalyzing private capital, and revealing solutions, opportunities, and viable business cases for scaling. The disparity between mitigation and
adaptation blended finance is further explored through key stakeholder interviews with experts in the field. 

PARTS V & VI highlight key challenges and recommendations on the respective role climate blended finance can play in mobilizing private capital to bridge the SDG and climate funding gaps.

climate blended finance, state of blended finance

State of Blended Finance 2022

The State of Blended Finance 2021 is the fifth edition of Convergence's flagship annual report. The report uses Convergence's proprietary blended finance data to provide an updated analysis of the blended finance market, including blending approaches, sectors, regions and investor trends.  For the first time, this year's report will also include a thematic focus on how to achieve scale in the blended finance market, highlighting key challenges and recommendations. The report will include guest op-eds from prominent stakeholders in the blended finance market, including development agencies, MDBs and DFIs, think tanks, and private investors.

With the intensifying effects of climate change and the protracted global pandemic exacerbating  existing development challenges in the past year, Convergence posits the time for scale in blended finance is now.


State of Blended Finance 2021 - Convergence

State of Blended Finance 2021

The State of Blended Finance 2021 

This report uses blended finance data and insights compiled by Convergence to provide an updated analysis of the blended finance market, including
blending approaches, sectors, regions and investor trends. We are also excited to include the following additions for the first time to this year’s report:
- Interviews with leading experts in the blended finance market, including representatives from development agencies, multilateral development banks (MDBs), development finance institutions (DFIs), impact investors, and institutional investors (‘Voices from the Field’)
- A forecast of emerging trends in the blended finance market, leveraging Convergence’s collection of data on transactions seeking blended capital, including from our proprietary matchmaking platform

The State of Blended Finance 2020 concludes with reflections on the journey to advancing blended finance at scale, exploring key challenges and progress made to date. Lastly, the report considers the impact of the COVID-19 pandemic on the blended finance market and the attainment

The State of Blended Finance 2020

The Sustainable Development Goals (SDGs) target a range of development challenges, from combating climate change to ending poverty and hunger. To achieve the SDGs in developing countries, a significant scale-up of investment is required. Blended finance is the use of catalytic capital from public and philanthropic sources to mobilize additional private sector investment in developing countries to realize the SDGs. Blended finance is one important approach to financing the SDGs, with the United Nations (UN) member countries reaching consensus on its importance at the Third International Conference on Financing for Development in 2015. Since then, blended finance has become a familiar concept for a diverse set of organizations across the public, private, and philanthropic sectors.

This report uses Convergence data and insights to provide an updated analysis of the blended finance market, including intended impact, blending approaches, focus sectors, and target regions. The report also highlights the most active organizations in the space, provides an overview of emerging trends and themes in blended finance, and reflects on progress towards ‘better blending’. Established out of the Addis Ababa Action Agenda, Convergence generates blended finance data, intelligence, and deal flow to increase private sector investment in developing countries for sustainable development.

The State of Blended Finance 2019

The Sustainable Development Goals (SDGs) target a range of development challenges, from combating climate change to ending poverty and hunger. To achieve the SDGs in developing countries, a significant scale-up of investment is required. Blended finance is the use of catalytic capital from public and philanthropic sources to mobilize additional private sector investment in developing countries to realize the SDGs. Blended finance – the strategic use of catalytic capital from public and philanthropic sources to mobilize additional private sector investment – is one important approach to financing the SDGs. The United Nations (UN) member countries reached consensus on the importance of blended finance at the Third International Conference on Financing for Development in 2015. Since then, blended finance has entered the mainstream. Over the past year, blended finance has found its way into international development policy and strategies, made news headlines, and become a central theme across major global conferences.

This report uses Convergence data and insights to provide an updated analysis of the blended finance market, including impact, blending approaches, sectors, and regions. The reports also highlights the top investors in the space, provides an overview of key events in blended finance, and reflects on progress that has been made on previous action items and issue areas outlined in the inaugural State of Blended Finance published in 2017. Established out of the Addis Ababa Action Agenda, Convergence generates blended finance data, intelligence, and deal flow to increase private sector investment in developing countries and sustainable development.



The State of Blended Finance 2018

Achieving the Sustainable Development Goals (SDGs) would create a world that is comprehensively sustainable: socially fair; environmentally secure; economically prosperous; and more inclusive. But this ambitious set of 17 goals and 169 targets will require a new level of global cooperation. The United Nations estimates that the annual funding required to achieve the SDGs is USD 3.9 trillion, but current levels of official development assistance (ODA) and international investment towards the SDGs will leave an annual funding gap of USD 2.5 trillion. To help close the funding gap, the international development community must tap additional sources of capital, including from the private sector. Blended finance – the strategic use of public and/or philanthropic funding to catalyze private sector investment in SDG-related investments in developing countries – holds much promise.

The State of Blended Finance aims to expand the evidence-base around the potential of blended finance to help close the SDG funding gap by summarizing blended finance deal trends and identifying ongoing blended finance-related efforts of key actors in the space. This working paper (report) has been jointly produced by the Blended Finance Breakthrough Taskforce (BFBT) convened by the Business & Sustainable Development Commission, and Convergence. This report will inform the recommendations the BFBT intends to deliver to unlock systemic barriers in the blended finance ecosystem that are currently preventing the flow of mainstream capital into blended finance transactions at scale.

To validate the promise of blended finance, Convergence has collected extensive data on past blended finance transactions. In total, these transactions have mobilized USD 51.2 billion towards sustainable development. While Sub-Saharan Africa is the focus region of approximately 40% of blended finance transactions, the median deal size is relatively small compared to other regions and Sub-Saharan Africa only accounts for 16% of total capital mobilized by blended finance. Financial services, clean energy, and climate finance account for half of blended finance deals. The majority, 73%, of blended finance deals leverage either i) junior/subordinate capital, ii) a technical assistance facility, or iii) both junior/subordinate capital and a technical assistance facility. Half of blended finance deals are those associated with a technical assistance facility. The International Finance Corporation (IFC) and the European Commission (EC) are the largest public funders of blended finance. The EC largely operates through the European Development Finance Institutions (DFIs). Private investors in blended finance could include commercial banks, insurance companies, and institutional investors. These investors in blended finance are more fragmented, and few take prominent roles across blended finance transactions.

There is a substantial amount of activity in blended finance, with hundreds of active organizations. There are several activities that merit particular note. The Organization for Economic Cooperation and Development (OECD) is in the process of establishing blended finance principles to guide the blended finance activities of aid agencies and donors. In addition, the OECD is developing a new measure called Total Official Support for Sustainable Development, a metric that will capture development aid flows beyond ODA, like blended finance. The World Bank Group is one of the largest channels of blended finance funds from multilateral and bilateral donors and recently approved the International Development Association (IDA) Private Sector Window (PSW). Through the PSW, IDA donors have agreed to provide USD 2.5 billion of blended finance funds to be implemented under four facilities by the IFC and Multilateral Investment Guarantee Agency. The EC’s new External Investment Plan (EIP) will promote investment in developing countries, with a focus on Africa and the EU Neighbourhood. The EIP makes provision for significantly more blended finance through the European Fund for Sustainable Development, including a EUR 75 million guarantee facility and a EUR 2.6 billion blended facility. While private sector investors have participated in select deals, there has been no significant momentum in attracting these investors to blended finance at scale.

This report concludes with several insights based on the trends analysis and activity mapping. First, blended finance activities are fragmented and there is a lack of scale. There is a need to ensure that blended finance initiatives remain aligned and complementary. Further, stakeholders are encouraged where possible to invest in existing solutions that have the potential to scale, as opposed to creating new solutions. Second, current investment opportunities in developing countries do not have an attractive risk-return profile for private sector investors. For private investors to participate, absolute risk must be acceptable, the risk-return profile of investments must be at market prices or better, and diversification through the pooling of assets and projects across countries and sectors is required. Third, donors require better enabling conditions to participate in blended finance. Donor organizations need a proper understanding of blended finance and the capacity to invest in blended finance transactions, as well as effective metrics for evaluating additionality, value-for-money, and leverage. Finally, MDBs and DFIs should allocate more capital to higher-risk activities, including targeting low-income countries, participating more in subordinated positions, and providing more risk participation products.

State of Blended Finance

The State of Blended Finance is Convergence's flagship report, published twice a year. The spring edition provides a comprehensive overview of overall blended finance market trends, while the fall edition focuses on climate.

Latest Report

State of Blended Finance 2025

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