Blended finance driving capital to emerging markets

THE Indonesian and Malaysian governments, and the recently established Singapore Sustainable Finance Association, have made blended finance a key priority, recognising its potential as a powerful tool to unlock development finance across the region.

Developing nations, including Indonesia, contribute half of global gross domestic product, yet only attract a fraction of the US$220 trillion of global capital due to high perceived risks and other market inefficiencies. Blended finance offers a template for how emerging economies can attract investment without compromising on growth or sustainability.

Despite its potential, there remains a shortage of execution of such structures, leaving many key projects in emerging markets underfunded.