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Add to Preferred SourcesA new report by international Development Finance Institutions (DFIs) shows for the first time the scale of blended concessional finance to support transformative investments in challenging markets and deploy private sector funds to achieve the United Nation’s 2030 Agenda for Sustainability Development and the Sustainable Development Goals.
According to the joint report, in 2017 more than US$ 9 billion of private investment projects were supported by about US$ 1.2 billion in concessional funds channelled through 23 multilateral and bilateral DFIs. These institutions invested about US$ 3.9 billion of their own commercial funds in these projects. The remaining finance of more than US$ 3.3 billion came largely from private lenders and investors.
The EBRD works in close coordination with its donor partners, clients and other development institutions to ensure that concessional funds – including co-investment grants and guarantees, amongst other instruments – are blended with its own commercial finance and private sector investment in line with the Bank’s mandate to foster transition to sustainable market economies. In 2017, almost 70 per cent of blended concessional finance in private sector operations targeted green growth.
The DFI report also highlights the extensive work the institutions have undertaken to ensure that they use concessional funds effectively and efficiently. In 2017, they adopted a set of five principles (the DFI Enhanced Principles) for using concessional resources. These principles emphasize the need to minimize the amount of concessionality in projects, and ensure that projects can eventually operate in a sector without subsidy. Since then, the DFIs have made progress in developing governance and approval processes, operating guidelines and training programmes for the effective use of the DFI Enhanced Principles throughout their organisations.
The release of the report was announced at the Tri Hita Karana (THK) Forum on Sustainable Development in Bali where many attendees endorsed a programme to complement the DFI work, called the “Tri Hita Karana Roadmap for Blended Finance.”
Download and read full report: DFI Blended Finance Report OCT 2018
Original source: EBRD
Published on 11 October 2018