Blended finance

Private debt investments in emerging markets are still considered high risk by some institutional investors, but blended finance solutions and other structures are attracting the interest of some of Europe’s largest pension funds.

Spark+, a $64m blended finance fund, invests in scalable companies offering clean cooking energy solutions to the mass market in sub-Saharan Africa.

The Green Earth Impact Fund is seeking to attract up to $250m of investment in fund aiming to close the public-private financing gap for sustainable investments. 

A ‘blended government’ approach based on public-private partnerships can help overcome the shortcomings of the ‘vending-machine government’ model, according to the authors of ‘Bridgebuilders’, reviewed by Christopher Walker.

The Urban Resilience Fund is a multi-vehicle blended finance initiative, backed by DFIs and other investors, to support climate-focused projects in sub-Saharan Africa.

Investors commit €36m to back businesses providing affordable, safe drinking water to underserved populations mainly in Africa and Asia.

The initiative aims to change the financial sector’s perception of water: not as an isolated sector but as an entry-point for multi-sector, local and regional impact investment opportunities.

The Article 9 fund will invest primarily in Africa and Asia. US International Development Finance Corporation, Swedfund, Swedish International Development Cooperation Agency and other partners will provide capital and guarantees.

The fund, which has backing from the UK government, will support local capital providers investing in SMEs whose activities help meet UN sustainable development goals.

Green guarantees are a key component of the EU’s drive to support energy transition and climate adaption in developing countries. A large share of the investment programmes will be implemented by DFIs, as FMO’s David Kuijper explains.