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Research & Publications

New Data & Evidence for Blended Finance Approaches & Practices

Project snapshot 1

„Blended Finance: When to use which instrument“

This research project addresses one major question: How to select – or create – an appropriate and effective blended finance instrument to address a given problem.

There are numerous factors to be considered when deciding on the best approach. An intimate and granular understanding of both, the contextual factors which play a role and the mechanics of varying blended finance instruments, will be vital to come to the right decision.

So far, the majority of research conducted on blended finance has focused on the effectiveness of instruments with respect to mobilizing private investment in a broadly defined development context. What is new, however, is to thoroughly investigate how specific instruments contribute to solving a concrete problem or achieving specific outcomes. Therefore, this research project will perform a bottom up assessment of how to effectively address a predefined problem with appropriate financial structures.

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Blended Finance Instruments

Blended Finance Archetypes

Project snapshot 2

„Public support: How much is enough“

While both public and philanthropic funders are using concessionary capital to crowd in private investors – sometimes even forgoing financial returns altogether -,  private investors often have mixed expectations vis-a-vis this specific type of funding.

The research project will focus on assessing how much „blending“ is exactly needed to successfully crowd in private investors. A related question is whether or not excessive concessionary capital is actually crowding out private investors and thus creates competition rather than collaboration.

Answering these questions with the help of excellent research will enable funders to identify the appropriate level of concessionary capital and ensure that private investment is effectively crowded in while negative side-effects are avoided.

More research news

….. to come soon.

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More Basics on Blended Finance Instruments?

Would you like to get initial food for thought about the right financing instruments for catalyzing private investment in developing countries?

Then this working paper by the Center for Global Development is a great start.