The amount of finance required to meet the sustainable development goals (SDGs) in developing countries dwarves available public funds, whether from the countries themselves or their international partners. A broader range of financial sources must be leveraged, especially from the private sector.
By supporting the creation of markets, demonstrating financial viability, pooling financing and helping investors better understand risks, the blended finance operations of donors, multilateral development banks (MDBs), development finance institutions (DFIs) and philanthropic organisations can improve the risk-return profile of investments in developing countries, attracting more private finance there.
The OECD promotes high quality in the design and implementation of such interventions. Building on its data and evidence of best practices, it supports greater co-operation and co-ordination amongst public and private actors; highlights opportunities and risks; reviews the instruments (e.g. guarantees) and structures (e.g. risk transfer mechanisms) that underpin blended finance; and advises on their use in different contexts to mobilise more local and international private finance, including investment in local currencies.
