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Principle 5

MONITOR BLENDED FINANCE FOR TRANSPARENCY AND RESULTS

To ensure accountability on the appropriate use and value for money of development finance, blended finance operations should be monitored on the basis of clear results frameworks, measuring, reporting on and communicating on financial flows, commercial returns as well as development results.

5A - Agree on performance and result metrics from the start.

Since inception, development and commercial actors taking part in blended finance operations should adopt a common monitoring and evaluation framework. Performance and result metrics should be applied to both direct engagement of donors in blended finance and to intermediated operations, while specific reporting arrangements may be tailored to context. Establishing a common set of key performance indicators should be a priority to ensure a transparent, harmonised and comparable assessment of results, thereby also providing a common framework of intervention for all parties to a given blended finance operation.

5B - Track financial flows, commercial performance, and development results.

In order to assess the effectiveness and efficiency of blended finance operations, the financial and development performance of all parties should be assessed against predefined and agreed upon metrics. These should cover development finance, additional commercial finance mobilised (including financial returns), and the results achieved on development objectives.

5C - Dedicate appropriate resources for monitoring and evaluation.

Adequate systems should be put in place to allow the monitoring and evaluation of the development interventions supported through blended finance. Donors should align on a common understanding of blended finance assessment methodologies to ensure consistency in data collection and reporting.

5D - Ensure public transparency and accountability on blended finance operations.

Information on the implementation and results of blended finance activities should be made publicly available and easily accessible to relevant stakeholders, reflecting transparency standards applied to other forms of development finance. Besides accountability, external communication on blended finance performance is instrumental in mobilising further commercial capital, by improving the availability of market information and the quality of risk assessment for the efficient pricing of investments.

« Donors must clearly spell out whether blended finance can meet the challenge of reducing poverty and inequality. So far, there is simply no evidence to tell us whether or not blended finance can have a positive impact on people and planet. »

WINNIE BYANYIMA, EXECUTIVE DIRECTOR, OXFAM INTERNATIONAL

This guidance is a collaborative effort. We encourage you to send us your questions and comments at: DCD.BlendedFinance@oecd.org