Is blended finance the panacea for addressing sustainability issues in developing Asia?
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BLENDED finance has been widely championed as a key pathway to decarbonising developing Asian countries, not least among policymakers in the region. However it has been noted of late that this innovative avenue of financing has “fallen short of its promise”.
Over the past 15 years, annual volumes of blended finance have been stagnant at around US$15 billion, with only 38 per cent sourced from private financing. Given the projected need of around US$9 trillion by 2030 for climate finance alone, the concern raised is not unfounded, as achieving this lofty target needs significant involvement from private financiers.
Convergence, the global network for blended finance, defines the approach as “the use of catalytic capital from public and philanthropic sources to increase private-sector investment in sustainable development”.
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