Blended finance is a risk mitigation tool for investments that find it difficult to attract commercial funding.

Blended finance refers to the combination of concessional and commercial funding in private sector-led projects. Its rationale is to support projects with potentially high social benefits, but that would not attract funding on strictly commercial terms due to their high risks.

This note synthesizes evaluation findings from two sources:

  1. IFC’s early experience with blended finance as reflected in 14 project evaluations of projects approved over 2010-2014; and
  2. a cluster of five Project Performance Assessment Reports (PPARs) of recent projects, approved over 2012-2016. The emphasis is on findings from the more recent projects.

 

Pictured: Men in Kenya guard their livestock. IEG’s evaluation has found that blended finance has improved dairy farmers’ capacity to improve herd management and quality. Photo credit: Dragos Lucian Birtoiu/ shutterstock