According to Principle 4, blended finance works if both development and financial objectives can be achieved, with appropriate allocation and sharing of risk between parties, whether commercial or developmental. Development finance should leverage the complementary motivation of commercial actors, while not compromising on the prevailing standards for development finance deployment.
OECD DAC Blended Finance Guidance 2025
Abstract
Subprinciple 4.A. Engage each party based on their respective mandate.
When engaging in blended finance, understand and respect each actor’s mandates, objectives and risk-return profiles.
Engage with all relevant stakeholders in the blended finance ecosystem.
Partner as much as needed, but not more than necessary.
Subprinciple 4.B. Allocate risks in a targeted, balanced and sustainable manner.
Understand and assess the different types of underlying country-, context-, sector- and transaction-specific risks.
At each level of blending, apply different methodologies for risk assessment as a basis to determine the optimal blending instrument and concessionality level.
Adjust the mix between concessional and commercial finance as risks evolve throughout the stages of the project life cycle.
Bring in local entities to improve risk allocation in blended finance and reduce foreign exchange risk.
Subprinciple 4.C. Aim for scalability.
Promote transparency, data availability and knowledge sharing.
Set incentives for scaling up through appropriate targeted mobilisation objectives for multilateral development banks (MDBs) and development finance institutions (DFIs).
Promote whole-of-government approaches and improved collaboration and co-ordination between donors, MDBs and DFIs.
Prioritise project preparation to accelerate the creation of a pipeline of bankable projects.
Encourage the replication of successful blended finance instruments as well as the development of new ones that further enable standardisation and scale.
Significant developments have taken place in recent years in relation to partnering for blended finance. A set of new and important players have entered the ecosystem, new platforms and alliances have been established, and stronger collaboration has been forged among DFIs and MDBs and with the private sector. While new opportunities are emerging, these developments have also highlighted key challenges and gaps in attracting commercial finance to developing countries. This has important implications for the updated Guidance on effective partnering for blended finance.
New players in the blended finance ecosystem
Development-oriented mandates are expanding beyond the traditional development community. Historically, development finance has largely been provided by donors, DFIs, MDBs and philanthropies. However, a new set of organisations and institutions have entered the development-oriented space, or have been participating more in blended finance deals, since the first edition of the Guidance from 2020. Examples include export credit agencies (ECAs), impact investors and a range of financial institutions and asset managers who are increasingly responding to client demands for sustainability and development-oriented products and solutions, including blended finance.
ECAs promote exports and trade while supporting national commercial interest abroad. However, since the first edition of the Guidance, they have been increasingly focusing on more broadly defined national interest, which includes contributing to climate goals and the Sustainable Development Goals (SDGs) (ExFi Lab, 2024[1]). Recent modernisation efforts also include activities related to climate change mitigation. The OECD’s official development assistance (ODA) eligibility assessment of private sector instruments (PSIs) undertaken in 2024 calls for enhanced co-ordination with ECAs while emphasising how PSIs already leverage ECAs’ extensive expertise in credit and political risk assessment, as well as their knowledge of sustainability and commercial characteristics in key business sectors. The ODA eligibility assessment also illustrates how ECAs frequently co-finance development projects with DFIs (OECD, 2024[2]). ECAs are mobilising significant amounts of private capital, and the developments open new opportunities for enhanced collaboration and partnering with development finance providers for sustainable investment in emerging markets and developing economies (ECDPM, 2024[3]).1
Evidence has also shown how impact investors increasingly participate in blended finance deals. A 2024 survey from the Global Impact Investing Network found that 42% of impact investors had “participated in a blended finance deal in the three years prior to 2024” and that 44% of emerging market headquartered investors planned to participate in blended finance in the future (GIIN, 2024[4]). Although most of the mobilisation resulting from impact investors has taken place in developed countries, blended finance – which is recognised by a majority of these investors as a de-risking mechanism – could play a significant role in shifting part of this mobilisation to developing countries. Partnerships with impact investors and impact asset managers in emerging markets and developing economies are already taking place, for example with Triodos Investment Management and BlueOrchard Finance (Triodos Investment Management, n.d.[5]; BlueOrchard, n.d.[6]).
An increasing range of financial institutions and asset managers are responding to demands for sustainability and development-oriented products and solutions from their clients, including through blended finance structures at scale:
BNP Paribas has a microfinance portfolio of EUR 260 million in developing countries on their balance sheet; this indicates that mainstream financial players can operate and invest in the development area (BNP, 2024[7]).
The Gaia platform from MUFG Bank has mobilised finance for adaptation and mitigation projects in emerging markets, including in least developed countries and small island developing states (MUFG, 2023[8]).
The Climate Finance Partnership includes Blackrock, France (the French Development Agency), Germany (KfW), Japan (Japan Bank for International Co-operation) as well as philanthropic partners showcasing how the partnership between commercial actors, development actors and philanthropic actors is increasing.
A consortium of private financial institutions (Impact Disclosure Taskforce), led by JP Morgan and Natixis has been established to develop voluntary entity-level disclosures on SDG impact intentions and performance with the intention of facilitating more investments towards the SDGs, primarily in emerging markets and developing economies.
These examples indicate increased interest in, and convergence of, philanthropy, development, and traditional investing and that commercial finance and private investors have a growing interest in blended finance.
Civil society organisations (CSOs) also play an increasingly important role in blended finance, particularly in ensuring that projects are accountable and aligned with development goals. A dual role of CSOs has crystallised where the community maintains a critical voice to ensure that blended finance is additional and avoids over-subsidising commercial investors. At the same time, CSOs increasingly engage in blended finance transactions with commercial partners and development finance providers where they play a key role ensuring that projects are tied to development outcomes, facilitating stakeholder engagement, providing local expertise and capacity building, advocating for safeguarding social and environmental standards and monitoring and evaluating projects. CSOs are thus becoming important partners in blended finance as they bring unique perspectives, expertise and accountability to the process. Further partnering with these organisations opens new opportunities for more effective blended finance (Volta Impact, 2022[9]; INFID & Green Network Asia, 2025[10]; Civil Society Financing for Development Mechanism, n.d.[11]).
The entrance of new players has also reflected market inefficiencies and highlighted gaps, notably in relation to risk misperceptions and credit rating agencies’ (CRAs) methodologies in developing countries. These challenges have led to new partnerships and alliances such as the African Credit Rating Agency endorsed by the African Union and meant to provide an independent rating agency tailored to African needs (APRM, 2024[12]). The BRICS countries have also proposed a public CRA as an alternative to the “Big Three” agencies; this indicates a wish for a more diverse credit rating system. Capacity building initiatives like the African Peer Review Mechanism, the United Nations Development Programme’s Africa Credit Ratings Initiative, and the Africa Legal Support Facility support this agenda. They also help developing countries address the complexities of credit ratings and capital markets.
New platforms and alliances in the blended finance ecosystem
The number of platforms and alliances to promote stronger partnership and frameworks to scale blended finance has increased since 2020. Platforms and alliances foster greater levels of co-operation and co-ordination and have proven to play a significant role in sharing of knowledge, pooling ideas and resources and building up the ecosystem of blended finance.
An example is country platforms, which essentially are partnerships established at the national level to co-ordinate development interventions among a range of stakeholders including government, MDBs, DFIs, private investors, CSOs and philanthropic entities. Country platforms encourage a whole-of-government approach to development finance as well as public-private collaboration. They align investment with national priorities, reduce fragmentation and enhance local ownership as well as collaboration with the private sector. They also serve to mobilise private investment via blended finance and to help prepare projects and build pipelines. Examples of country platform approaches include the SDG One in Indonesia, the Kenya Off-Grid Solar Access Project, the Global Agriculture and Food Security Program, the Compact with Africa and the Africa50 Infrastructure Fund. Chapter 6 contains case studies on county platforms that illustrate both the effectiveness and the challenges of this mechanism.
Another example is the creation of new alliances. The Global Blended Finance Alliance in Indonesia was established in 2024 to work with partners to strengthen the blended finance ecosystem and fill market gaps. The Just Energy Transition Partnerships are multi-stakeholder alliances designed to support emerging markets and developing economies in transitioning from fossil fuels to cleaner and more sustainable energy systems.
In addition, new platforms and alliances driven by donors have also been established, for example the Investment Mobilisation Collaboration Alliance (IMCA) initiated in 2022 with the participation of the Nordic donors and the United States with the aim of scaling the mobilisation of private capital, and the Growth Investment Partners Platform in Ghana established by British International Investment in 2023 to provide long-term, flexible capital, primarily in local currency to small and medium-sized enterprises (SMEs) in Ghana. Non-traditional actors have also engaged in country platform approaches, such as the partnership between the Glasgow Financial Alliance for Net Zero2 and the Climate Finance Leadership Initiative.
New and stronger collaboration among development finance institutions and multilateral development banks
New partnerships involving DFIs and MDBs have been developed that show the benefits of joining forces. One example is a new African Multi-originator Synthetic Securitisation Platform that is being established with the African Development Bank, the Development Bank of Southern Africa, Academy Securities, Africa50 and Newmarket as partners. Its aim is to be a revolving, evergreen vehicle to de-risk the balance sheets of DFIs operating in Africa while providing attractive investment returns for private sector participants (AfDB, 2024[13]).
Another example is the Gridwork-backed Wesa Power utility company in Burundi where the International Finance Corporation (IFC), British International Investment and the government of Burundi have joined forces to bring clean, affordable and reliable power to up to 9 million people in Burundi. The partnership illustrates the benefit of sharing risks that enables investment in critical infrastructure in riskier environments. The collaboration around Wesa Power has thus enabled a new country-scale distribution utility which previously would have been too risky for a single DFI to take on (Gridworks Partners, 2024[14]).
Sub-principle 4.A. Engage each party based on their respective mandate
When engaging in blended finance, understand and respect each actor’s mandates, objectives and risk-return profiles
As a starting point, it is important for donors and other providers of development finance to understand and respect the mandate of each actor in a blended finance transaction, and to understand the risk-return profiles of both providers of development finance and commercial finance based on their respective mandates. Whereas commercial investors are concerned with a market-level risk-adjusted return, liquidity issues and regulatory constraints, development finance providers are concerned with development impact standards, monitoring and reporting (Figure 4.1).
Notes: For illustrative purposes only. It is important to note that there are commercial actors, such as impact investors who have preferences similar to those of development actors. Development actors include philanthropic and impact investors who have development mandates associated with their capital allocations.
The blended finance ecosystem has evolved, and the public (development) -private (commercial) divide has become more blurred. There is increasing overlap due to the ongoing integration of sustainability and climate (risk) considerations into commercial actors’ processes and/or regulatory regimes. In addition, the engagement of philanthropic donors in blended finance is growing.
Blended finance brings together diverse partners with differing mandates, preferences and skills sets and competences. It is incumbent upon donors and other development finance providers to facilitate partnerships in a way so that each partner’s comparative advantage is leveraged and the development impact for the partner country maximised. Doing this effectively requires continuous interaction, collaboration and working together in a dynamic manner from start to finish. Commercial investors have more experience with investment products and can help structure products to be more accessible to a broader range of investors. Commercial investors can also provide a variety of services, beyond just capital. Development finance providers most often bring monitoring and reporting frameworks to the deal while ensuring the investment is anchored to a development rationale and adheres to high standards. MDBs and DFIs also play a leading role in structuring blended finance instruments. In addition, local actors can help ensure the investment is tied to the local context and that they can also benefit from technical assistance.
Engage with all relevant stakeholders in the blended finance ecosystem
Blended finance forges partnerships between development finance providers which typically include donors, MDBs and DFIs and commercial investors, which typically include private firms, financial institutions, asset managers and institutional investors. However, new and important partners have entered the ecosystem, providing opportunities for new partnerships that may facilitate and increase the mobilisation of private finance and thereby improve the effectiveness of blended finance.
Export credit agencies
Donors and DFIs should strengthen their engagement with ECAs further and investigate opportunities for closer co-ordination and collaboration on the mobilisation of private finance for sustainable development in EMDEs while respecting the different mandate of the DFIs and ECAs.
ECAs can play a significant role in blended finance interventions by leveraging their financial instruments and expertise to mobilise private investment for sustainable development. They provide de-risking through insurance and guarantees; finance infrastructure and capital-intensive projects; and support local capacity building through their engagement with banks, governments and other institutions. They also promote sustainable and green financing aligned with the SDGs and the Paris Agreement and facilitate project preparation and technical assistance to ensure projects are viable and bankable. In some instances, they help bridge gaps in local capital markets by enhancing the availability of local currency financing.
Closer collaboration between donors, DFIs and ECAs could benefit the blended finance ecosystem and facilitate the mobilisation of private finance to EMDEs through a range of activities. This could include sharing of information on sectors and local markets, credit and risk assessments, client due diligence, additionality assessment and industry-specific expertise. It could also include joint project identification and co-financing projects to achieve large-scale investment in risky contexts. Combining financial instruments and harmonising processes and standards (such as standardising legal agreements, financial terms and guarantees) would also help facilitate the effectiveness of blended finance.
Several issues should be considered when working towards enhanced co-ordination and collaboration. First, export credits are provided at near market terms and primarily for commercial purposes. For this reason, they are not eligible to ODA. Export guarantees have been ruled out from ODA eligibility, even in the context of private sector instruments (DCD DAC, 2023[15]). Second, the decision-making processes of ECAs and ODA should remain independent to avoid conflict of interest and ensure clarity in the pursuit of their respective mandates.
Yet better alignment on shared priorities such as sustainable infrastructure, renewable energy, or climate finance can help bridge ECAs and DFIs. Closer collaboration could foster mutual understanding of the distinct roles of development and trade finance and could strengthen safeguards to ensure a level playing field between the two types of institutions. Closer collaboration could also facilitate greater co-ordination and tapping of synergies in the field, including in co-financing scenarios.
Impact investors
Donors and other providers of development finance should strengthen collaboration with impact investors as they are valuable partners in blended finance due to their dual focus on achieving measurable social or environmental impact alongside financial returns. Such investors could include foundations, family offices, dedicated facilities/platforms (e.g. Acumen), retail investors, philanthropies, etc.
Impact investors can bridge the gap between the public and private sectors, mobilise additional funding and ensure that blended finance projects have a development rationale. Importantly, as they often prioritise underserved or marginalised populations such as SMEs and women-owned businesses, they can help ensure inclusivity in blended finance projects.
Impact investors often bring long-term and patient capital and will often accept below-market returns or take higher risks in exchange for achieving significant social or environmental impact. They can also bring innovative approaches to financing (such as pay-for-results models or revenue sharing) and help improve project design by setting impact metrics and participating in monitoring and evaluation exercises. As such, impact investors can help unlock capital, including from institutional investors; scale the mobilisation of private finance; and make blended finance projects and interventions more effective.
Civil society organisations
Donors and other providers of development finance should leverage the increasing engagement in blended finance by CSOs and strengthen collaboration even further. These organisations can act as intermediaries between development finance providers, private investors and local communities and can help facilitate dialogue between project stakeholders and ensure projects are inclusive and tied into the local context. CSOs have extensive experience providing technical assistance and training for local stakeholders, and from working as implementing partners for a range of projects financed by development co-operation funds. CSOs can also play an important role in monitoring and reporting on blended finance projects by collecting data on development outcomes, ensuring accountability and transparency in project implementation, and reporting on the social and environmental impact of projects.
While engaging with CSOs in blended finance projects it is important to establish clear roles and responsibilities to avoid overlap and inefficiencies, and to acknowledge each stakeholder’s comparative advantages in a transaction. These advantages can complement each other and be enhanced through mutual capacity strengthening as relevant and needed. Chapter 6 contains case studies on how CSOs have engaged in blended finance interventions.
Credit rating agencies
CRAs play a critical role in attracting private capital by providing standardised and independent forward-looking opinions of creditworthiness of both countries (sovereign), companies and project-specific transactions thereby improving investors’ ability to price risks. CRAs can play a role in supporting greater deployment of blended finance structures by evaluating the risk of different tranches and thereby enable a more precise allocation of risk and return. They can also contribute to greater investor adoption of blended finance instruments by establishing clearly defined rating methodologies adapted to market developments, which provide comparability and transparency to help investors take more informed decisions. This could encourage new and innovative financial instruments and market replication. However, to do this effectively, CRAs need access to more and better data.
While credit ratings are an important input for assessing and pricing risk, some limitations in their approaches to EMDEs have been highlighted which could contribute to market inefficiencies. Academic studies, independent think tanks and multilateral organisations have pointed to several challenges in relation to CRAs’ methodologies for developing countries, including: insufficient differentiation between developing countries; conservative assessment and slow adjustment of ratings in response to improvements in a country's economic conditions; potential capping of firm and project ratings by the country sovereign ratings; limited and too negative consideration of risk-mitigating instruments, such as blended finance, and of developmental and ESG factors; insufficient data; and lack of transparency in rating methodologies and processes (UNCTAD, 2025[16]; UNU, 2024[17]; ODI, 2024[18]; ODI, 2024[19]; Africatalyst, 2024[20]; Environmental Finance, 2025[21]).
Donors could engage with CRAs – both international and regional – and help addressing the challenges in relation to CRAs’ ratings of EMDEs and of risk-mitigation instruments. This could include support to refining their rating methodologies to take nuances and differences between countries into account, as well as support to regional CRAs that have expertise in local markets. Donors could also support improvement of data availability and reporting capacity of partner countries, corporates and financial institutions to generate and report high-quality, timely economic data. In addition, donors could help finance the cost of credit ratings of risk-mitigation instruments, which could help build the blended finance market further, also as CRAs might then invest in more capacity for ratings in EMDEs (which might otherwise be less financially attractive).
Partner as much as needed, but not more than necessary
Transaction costs in blended finance are a key concern for scalability. While partnering is necessary to de-risk transactions and leverage the strengths of the various actors, excessive or misaligned partnerships may lead to co-ordination challenges, diluted responsibilities and increased transaction costs. Finding the right balance in the number of partners is, therefore, critical to the success of blended finance transactions.
To create an optimal blended finance partnership it is important to assess the needs and gaps in the financing structure and other competences required to implement the initiative and achieve the expected development impact. When assembling the partners, it is critical to define clear objectives and roles from the beginning, focus on complementary strengths and establish clear and efficient governance structures. Each partner in a transaction should add value that justifies the added complexity of having one more partner in the transaction. For blended finance to be the most effective, it should involve a focused group of stakeholders, leverage the complementary strengths of the partners and balance the needs of the various participants in the partnership always with a view of the ultimate objective: mobilising as much private capital as possible for development impact. As blended finance structures become more standardised, more institutional investors will be able to join at marginal cost and mobilise significantly more private capital.
Subprinciple 4.B. Allocate risks in a targeted, balanced and sustainable manner
Understand and assess the different types of underlying country-, context-, sector- and transaction-specific risks
Achieving a balanced and sustainable risk allocation between development finance providers and commercial investors in blended finance requires a clear understanding of the type of risks involved: who among the respective parties are the best positioned to bear them; and the different and evolving nature of risk depending on the stage in the project cycle, the sector and the geography involved. Balanced and sustainable risk allocation also requires all of the partners involved have a minimum risk management capacity.
At each level of blending, apply different methodologies for risk assessment as a basis to determine the optimal blending instrument and concessional level
Blending and risk assessment can take place at three levels:
1. at the institutional or portfolio level (such as securitisation of MDB assets)
2. at the programme level (such as structured funds)
3. at the project level.
Different methodologies for risk assessment apply at each level to determine the right instrument for blended finance and the right amount of development finance needed to crowd in commercial finance, including the level of concessionality if warranted (See Subprinciple 2.C). Table 4.1 provides an overview of the different levels of blending and associated risk assessment methodologies.
For blending at the project level and for larger projects and in sectors that allow for a high disaggregation of risk, such as infrastructure projects, development finance should cover the risks that the private sector cannot manage (such as political, regulatory and new technology risk) and provide risk mitigation in areas where no or limited market solutions are available for de-risking (through, for example, guarantees or insurance). In such projects, development finance can also be used to provide viability gap funding to enhance returns for commercial viability while maintaining affordability and avoiding over-subsidisation (see also Subprinciple 2.C.).
For blending at the programme level and in sectors with smaller transaction sizes that require an aggregate approach to financial risk analysis, such as SME finance or investment in agriculture, benchmarks need to be used to determine the amount of development finance required to crowd in commercial finance. Historic or expected losses can serve as benchmarks for, for example, determining the size of a first-loss tranche in a fund structure, while proxies may need to be used in sectors and geographies where limited data are available. For equity investments, return expectations should be benchmarked with returns in similar sectors and countries, possibly adjusted for country- or region-specific risk premia.
A differentiated risk analysis is required for each blended finance programme and project, considering the underlying country, sector, geography, technology, stage in the project cycle and financial structure. Factors such as first-time vs. repeat transactions, new vs. established technologies, new vs. established markets and performance track-record need to be considered when determining the amount of development finance required to crowd in commercial investors.
Adjust the mix between concessional and commercial finance as risks evolve throughout the stages of the project life cycle
Risk is dynamic; it declines along the project cycle and with the number of investments in each specific market. Different stages in the project cycle allow different combinations of risks and investors. For example, concessional finance may be needed during the high-risk project development phase and to de-risk certain types of investors during the construction phase, whereas concessionality may not be needed during the lower-risk operation phase (See Subprinciple 2.C.).
As risk profiles change and decrease during the project lifecycle, development finance providers should be open to adopt new financial instruments that allow better matching public and private investors with the respective risk profile. This is an important development for MDBs/DFIs that are evolving towards more originate-to-distribute/share. For infrastructure projects, this implies rethinking the standard project finance structure and exploring alternatives. For blending at the institutional/portfolio level, lower risks during the operating phase and/or in more mature sectors can be transferred to commercial investors, e.g. through securitisation. Similarly, financial risk-return models need to be adjusted to reflect declining risk over the project cycle.
Bring in local actors to improve risk allocation in blended finance and reduce foreign exchange risk
Donors and other providers of development finance should work to bring local investors and national development banks into blended finance transactions. Local investors such as sovereign wealth funds, local pension funds and commercial banks can provide local currency finance to projects that generate revenues in local currency, thereby eliminating foreign exchange risk. Local investors are also well positioned to provide long-term finance, and are better placed to understand, price and manage political risk in their country. Donors and other providers of development finance should, therefore, seek to catalyse investment from local investors in line with their regulatory requirements. Donors should also engage national development banks, as they can provide development finance through blended finance transactions and thereby participate in risk-sharing mechanisms.
Subprinciple 4.C. Aim for scalability
Donors and other providers of development finance can play an important role in improving co-ordination and collaboration in the blended finance ecosystem and setting the right incentives to enable scale. In aiming for scalability, co-ordination and collaboration among all partners in blended finance are critical, together with a broadened scope for institutional investors in the capital market. MDBs’ and DFIs’ renewed focus on maximising private capital mobilisation for the SDGs and climate action contribute to this. In addition, a clear, long-term vision to reach scale is necessary, including on the expected development impact resulting from the scaling up of projects or approaches. The following guidance messages are relevant to scale up blended finance:
Promote transparency, data availability and knowledge sharing
Donors and other providers of development finance should promote transparency and data availability and share knowledge. Lack of data constitutes a major barrier for scaling up blended finance, and donors and other providers should promote transparency by working with all relevant stakeholders to make data available to all market participants. This is elaborated under Principle 5: Monitor blended finance for transparency and results. In addition, knowledge sharing can also contribute to achieving scale. Lessons learnt should be made available to all market participants including development finance providers and commercial investors.
Set incentives for scaling up through appropriate targeted mobilisation objectives for multilateral development banks and development finance institutions
Donors should consider setting incentives for scaling up through appropriate, targeted mobilisation objectives for MDBs, DFIs and other implementing actors directly accountable to them. Setting mobilisation targets risks an excessive focus on countries and sectors where mobilisation is the easiest, such as middle-income countries and economic and financial sectors. Mobilisation objectives that include targets should, therefore, be linked to overall development policy objectives for different geographies, countries and sectors.
Promote whole-of-government approaches and improved collaboration and co-ordination between donors, multilateral development banks and development finance institutions
Strengthened co-ordination and collaboration among actors – including, in particular, donor agencies, MDBs and DFIs – can help scale up the blended finance market. Collaboration and co-ordination enhance scale, efficiency and private sector mobilisation. Pooling of resources, harmonising standards and procedures and jointly using risk-sharing instruments (such as securitisation, guarantees, structured funds and bonds) can ensure that resources are used more effectively. Structuring blended finance should be a shared effort where combined expertise and expectations are considered. Also, leveraging more from the deal-structuring experience of the private sector, such as commercial and investment banks, could add value to the system. Chapter 6 contains case studies on collaboration and co-ordination among donors and between donors, MDBs and DFIs. Together, the cases illustrate the importance of collaborating and co-ordinating efforts and how this can take place in effective ways.
Prioritise project preparation to accelerate the creation of a pipeline of bankable projects
Creating pipelines of bankable projects and establishing a conducive investment climate and regulatory environment are important preconditions for achieving scale. Donors should deploy grants and technical assistance in the early stages of project preparation to help build the project pipeline and create an enabling investment climate and regulatory reforms; assist partner governments developing investment plans around the SDGs, the Paris Agreement, nationally determined contributions, national adaptation plans and other relevant national development frameworks; finance project feasibility studies through (reimbursable) grants; provide early-stage, high-risk project development capital and project preparation facilities and as MDB/DFI shareholders encourage these institutions to scale up their upstream and mid-stream project preparation activities.
Encourage the replication of successful blended finance instruments and the development of new ones that further enable standardisation and scale
Donors and other providers should encourage the replication of successful blended finance instruments and the development of new instruments that further enable standardisation and scale, for example standardisation of funds’ structures and guarantees, use of market-based credit enhancement, fund-of-fund approaches, and multi-MDB and multi-DFI securitisation approaches, as elaborated under Principle 2: Design blended finance to increase the mobilisation of commercial finance. To promote more collaboration and the replication of successful models, development finance providers, private investors and other participants in blended finance deals could issue review and recommendation reports regarding successful blended finance structures and specific transactions.
References
[13] AfDB (2024), “Africa Investment Forum Market Days 2024”, New African multi-originator synthetic securitisation platform, https://www.afdb.org/en/news-and-events/press-releases/africa-investment-forum-market-days-2024-afdb-dbsa-and-institutional-investors-sign-agreement-new-african-multi-originator-synthetic-securitization-platform-79336#:~:text=The%20multi%2Doriginator%20sy.
[20] Africatalyst (2024), What would effective credit ratings reform for Africa look like?, https://africatalyst.com/what-would-effective-credit-ratings-reform-for-africa-look-like/.
[12] APRM (2024), Africa Credit Rating Agency on UNGA79 Agenda: Reforming the Global Financial Architecture, https://aprm.au.int/en/news/press-releases/2024-09-25/africa-credit-rating-agency-unga79-agenda.
[6] BlueOrchard (n.d.), Home, https://www.blueorchard.com/.
[7] BNP (2024), 2024 Microfinance Social Performance Reports: The social performance of microfinance institutions supported by BNP Paribas worldwide 2023 data, BNP Paribas, https://group.bnpparibas/uploads/file/2024_bnp_paribas_microfinance_social_report.pdf (accessed on 7 March 2025).
[11] Civil Society Financing for Development Mechanism (n.d.), Our Demands, https://csoforffd.org/our-demands.
[15] DCD DAC (2023), Private Sector Instruments - Batch 1 Topics, https://one.oecd.org/document/DCD/DAC(2023)22/en/pdf?sessionId=1695287718116.
[3] ECDPM (2024), Unlocking capital: towards a european approach to mobilising institutional investors, https://ecdpm.org/work/unlocking-capital-towards-european-approach-mobilising-institutional-investors.
[21] Environmental Finance (2025), Credit rating agencies key to unlocking blended finance, says Allianz GI, https://www.environmental-finance.com/content/analysis/credit-rating-agencies-key-to-unlocking-blended-finance-says-allianz-gi.html.
[1] ExFi Lab (2024), White paper on public export finance in the EU, https://eifo.dk/media/chbibwiq/exfilab_whitepaper_better-together-in-transformational-times_2024.pdf.
[4] GIIN (2024), State of the market 2024: Trends, performance and allocations., Global Impact Investing Network (GIIN), https://thegiin.org/publication/research/state-of-the-market-2024-trends-performance-and-allocations/ (accessed on 12 March 2025).
[14] Gridworks Partners (2024), IFC partnership for Gridworks-backed utility in Burundi, https://gridworkspartners.com/2024/04/23/ifc-partnership-weza-power/.
[10] INFID & Green Network Asia (2025), Policy Paper: Improving the Implementation of Blended Finance in Development Projects to Achieve the 2030 Sustainable Development Goals Towards Indonesia’s Vision 2045: Case Study of the Mandalika Special Economic Zone, https://infid.org/en/kertas-kebijakan-perbaikan-penerapan-blended-finance-dalam-proyek-pembangunan-untuk-mencapai-tujuan-pembangunan-berkelanjutan-2030-menuju-visi-indonesia-2045-studi-kasus-kawasan-ekonomi-khusus-manda/.
[8] MUFG (2023), GAIA – a climate and blended finance platform – gains momentum at Paris Summit for a New Global Financing Pact, https://www.mufgemea.com/media/gaia-a-climate-and-blended-finance-platform-new-global-financing-pact/.
[19] ODI (2024), “Give credit where it is due” – Africa’s fight with the Big Three rating agencies is overblown, https://odi.org/en/insights/give-credit-where-it-is-due-africas-fight-with-the-big-three-rating-agencies-is-overblown/.
[18] ODI (2024), “The African Debt Dilemma”, Unpacking the three unfavourable factors, https://odi.org/en/insights/the-african-debt-dilemma-unpacking-the-three-unfavourable-factors/.
[2] OECD (2024), Converged Statistical Reporting Directives for the Creditor Reporting System (CRS) and, https://one.oecd.org/document/DCD/DAC(2024)40/ADD3/FINAL/en/pdf.
[5] Triodos Investment Management (n.d.), Welcome to Triodos Investment Management, https://www.triodos-im.com/.
[16] UNCTAD (2025), Credit rating agencies, developing countries and bias, https://unctad.org/system/files/official-document/gds2024d3_en.pdf.
[17] UNU (2024), “Rating the globe”, Reforming credit rating agencies for an equitable financial architecture, https://collections.unu.edu/eserv/UNU:9832/rating_the_globe.pdf.
[9] Volta Impact (2022), Water for Women WASH Blended Finance Research Report, https://www.waterforwomenfund.org/en/learning-and-resources/resources/KL/Water-for-Women-Blended-Finance-Research-Report-Jan-2022_external.pdf.
← 1. Since the first edition of the Guidance, there have been several calls for enhanced co-ordination between ECAs and DFIs. The G7 ECA Heads acknowledged in 2024 the “important role that ECAs continue to play in supporting their own exports and foreign investments and confirm that now, a variety of roles are expected, including promoting inclusive and sustainable trade and investment in developing countries, emerging markets, and more established economies, and contributing to the realisation of various policy agendas of their respective governments” (see: https://www.exim.gov/news/heads-g7-export-credit-agencies-2024-meeting-statement). Among EU member countries calls have been made both by ECAs themselves (see: https://eifo.dk/media/chbibwiq/exfilab_whitepaper_better-together-in-transformational-times_2024.pdf), the European Union, and external organisations (see both: https://ecdpm.org/work/scaling-global-gateway-boosting-coordination-development-export-finance and https://ecdpm.org/work/unlocking-capital-towards-european-approach-mobilising-institutional-investors). The European Union is exploring options for enhanced co-ordination through an expert group established in 2024 (available at: https://data.consilium.europa.eu/doc/document/ST-8157-2023-INIT/en/pdf).
← 2. At the end of 2024 and beginning of 2025, several major financial institutions withdrew from the Glasgow Financial Alliance for Net Zero and its affiliated sub-alliances including the Net-Zero Banking Alliance and the Net Zero Asset Managers Initiative. The institutions included the six largest banks in Canada, joining American banks such as JPMorgan Chase, Bank of America, Wells Fargo, Citigroup and Goldman Sachs. These withdrawals have been tied to political risks and growing environmental, social and governance backlash (read more at: https://www.clearbluemarkets.com/knowledge-base/financial-institutions-withdrawing-from-net-zero-alliances).