Blended Finance: When to Use which Instrument
Blended finance is considered a critical tool for public and philanthropic capital to maximize environmental and social impact. With growing interest in blended finance, the sector is seeing diverse and innovative tools - yet, guidance on which instrument to use in which context is still lacking.
Blended finance instruments harness philanthropic or public funding to unlock private investment for development impact. This white paper should facilitate decision making processes and thus promote effectiveness in the allocation resources for development impact. The research project was made possible with support from UBS Optimus Foundation, with the goal to establish the factors that influence the appropriateness of a given financing instrument in each context to construct a guiding tool which can be used by different actors wishing to engage in a blended finance transaction.