News

CWEIC’s Strategic Partner, British International Investment (BII), together with Boston Consulting Group (BCG) has published a new report that provides a toolkit to significantly scale investor appetite for blended finance funds. The report can be accessed here.

Blended finance has long been recognised as an effective way to use concessional capital, typically from development finance institutions, multilateral banks, and philanthropies, to attract private investment into emerging and frontier markets where commercial funding is scarce.

By combining public, philanthropic, and private money into one investment structure, each with different roles, risks, and returns, blended finance can make otherwise unattractive opportunities viable for private investors. When designed well, these structures open up new markets, help diversify portfolios, and deliver measurable impact.

However, many private investors have found these deals too complex and costly to develop. As a result, only around $15 billion in private capital is mobilised through blended finance globally each year.

To help change this, BCG and BII have launched two practical tools aimed at simplifying the design and evaluation of blended finance funds. This will make it easier to unlock the billions of private dollars needed to advance the UN’s Sustainable Development Goals and respond to the climate crisis.

The paper, entitled Scaling blended finance, provides a typology and a scorecard for blended finance funds.

BII and BCG assessed 65 blended finance funds and found that over 90% could be classified into just five archetypes. These archetypes are differentiated from each other by fund purpose, institutional investor risk appetite, and underlying asset risk. While not rigid structuring templates, they provide a practical reference for fund managers and investors to design, assess, and capitalise blended vehicles more efficiently.

For more information, please see BII’s website: https://www.bii.co.uk/en/news-insight/news/new-report-provides-toolkit-to-turbocharge-investment-into-development-and-climate-finance/?fl=true