OECD DAC Blended Finance Guidance 2025

Readers guide

Background

The OECD DAC Blended Finance Guidance was developed as an implementation tool to ensure high standards in blended finance while increasing the overall amount of financing available for sustainable development. It outlines policy guidance as well as practical steps and elements that should be considered to facilitate the design and implementation of blended finance programmes. The Guidance also provides good practice examples and key references for practitioners. Its ultimate objective is to increase the scale of private capital mobilisation for sustainable development while improving the standards and development impact of the private capital invested.

What has changed in this second edition of the Guidance?

While the five Principles have stood the test of time, the Guidance has been amended and adjusted to reflect key learnings and good practices that have emerged over the last five years. Besides updating the existing Guidance, this second edition includes several new topics as well as areas of renewed and stronger focus:

• instruments and mechanisms to scale the mobilisation of private finance (see Subprinciple 2.B);

• approaches to promote local currency financing and local capital market development (see Subprinciple 3.B);

• using technical assistance to strengthen enabling environments for private finance mobilisation (see Subprinciple 3.C);

• achieving more transparency in blended finance (see Subprinciple 5.D);

• forming partnerships with new stakeholders in blended finance (see Subprinciple 4.A);

• increasing collaboration among donor agencies, and between donors, multilateral development banks and development finance institutions in blended finance initiatives (see Subprinciple 4.C);

• guidance for private investors and other providers of commercial finance (see Guidance summary).

The Guidance is underpinned by thematic case studies, tailored to the Principles.

How is the Guidance structured?

The Guidance is structured as follows:

Overview

The overview presents a section on “Blended finance fundamentals” that reiterates the definition of blended finance and its implications for providers of development finance. The section also presents the rationale for using blended finance and the main financial structures and instruments applied. It then provides an overview of the main actors in the blended finance ecosystem and presents the five Principles. This is followed by a “Guidance summary” that provides an overview of guidance for development finance providers (mainly donors but also other providers) and for providers of commercial finance (private investors, asset managers, etc.).

Guidance

The Guidance is composed of five chapters, one for each of the Principles. Each chapter opens with the aim of the Principle. A box presents the subprinciples reproduced from the first edition of the Guidance and summarises the updated Guidance messages. A subsequent section on context and trends presents the main developments that have taken place in blended finance since the first edition was launched in 2020. This is followed by a section with the updated Guidance.

Thematic case studies

Chapter 6 contains an introduction to a range of case studies within selected thematic areas that represent core enablers, tools and concepts in blended finance. The case studies underpin the Guidance and are meant to provide a resource for policymakers seeking to set strategic direction for their blended finance interventions and for practitioners seeking to design, evaluate or scale blended finance solutions for sustainable impact. A link to an online repository of the case studies is inserted in Chapter 6. The repository contains a more elaborate version of each of the case studies and includes links to further information. The repository is meant to be a living documentation of cases in blended finance and will be maintained on a continuous basis.

Target audience

The Guidance is targeted at several stakeholders in the blended finance ecosystem:

• Bilateral donors are the main target group. The Guidance focuses on the role of donors in setting policy standards for blended finance. Donors are partly owners or shareholders of bilateral DFIs and MDBs, and the role of donors in blended finance thus includes engaging with DFIs and MDBs, as well as with other organisations receiving donor funding or implementing donor funded projects.

• Private investors. The Guidance to private investors typically focuses on the importance of their engagement in blended finance to increase the flow of sustainable investment in emerging markets and developing countries, as well as on the role of private investors around sharing risk, impact reporting and maintaining transparency.

Other groups of stakeholders outside of the above groups play important roles in facilitating blended finance, including credit rating agencies and regulatory authorities. However, as these actors are not directly accountable to bilateral donors, implementation of policy recommendations in the Guidance specific to these actors should take place through donors’ engagement and dialogue in relevant bodies and institutions. The overview of the blended finance ecosystem and Principle 4 include more information on stakeholders.

How to use the Guidance

The Guidance can be used as an introduction to blended finance for stakeholders new to the approach, but it can also be used to support actors that have well-established programmes and wish to further explore and develop specific elements, such as mobilisation at scale, increased transparency and the development of local capital markets, among others. While certain Principles will be more relevant to certain stakeholders, readers can benefit from the entire Guidance. Blended finance operates in a complex ecosystem and better understanding that ecosystem in its entirety will enable better outcomes and solutions. The thematic case studies can be used as inspiration for designing blended finance interventions across the entire development finance value chain.