Africa: Blended Finance Initiatives to Facilitate $100 Billion in Support of Sustainable Development Goals

UNECA
UN Chief Ban Ki-moon at the Addis Ababa conference discussing how to finance development.
14 July 2015
World Economic Forum (Geneva)
press release

Addis Ababa — The World Economic Forum and the Organisation for Economic Co-Operation and Development (OECD), through the work of the Forum's ReDesigning Development Finance Initiative (RDFI), will formally announce three Blended Finance initiatives aimed at unlocking hundreds of billions of dollars of investment to help meet the United Nations Sustainable Development Goals (SDGs).

Blended Finance seeks to attract private-sector investment and finance alongside development finance and philanthropic funds to manage the risks and enhance returns.

Blended Finance offers a win-win-win option for all parties: wins for development finance and philanthropic funders, as they make their limited dollars go further; wins for private investors, as they generate attractive returns, and most importantly, wins for populations in developing countries, as more funds are channelled to their communities in ways that enables sustainable growth in the world's poorest countries.

Initiatives to be announced include:

Follow us on WhatsApp | LinkedIn for the latest headlines

  • A Sustainable Development Investment Partnership (SDIP), a global partnership between governments and financial institutions that provides practical solutions to unlock private capital for financing sustainable infrastructure and other development needs.
  • Convergence, a virtual platform for deal-making, sharing information and capacity building that facilitates and increases Blended Finance capital flows to developing countries.
  • The RDFI Toolkit, comprises a set of materials including knowledge products and a virtual community, the Blended Finance Network, to support the scaling up of Blended Finance as a mainstream, systematic practice.

Blended Finance is the strategic use of development finance and philanthropic funds to mobilize private capital flows to developing markets. Funds deployed through Blended Finance demonstrate the effective use of private capital to support development outcomes.

A recent survey conducted on behalf of the World Economic Forum identified 74 pooled funds and facilities representing $25.4 billion in Blended Finance assets, with the funds impacting over 177 million lives, demonstrating the tremendous potential of Blended Finance to close the funding gap required to finance the ambitious SDG agenda and deliver development outcomes.

"Expanding public-private cooperation in the form of Blended Finance is one of the most important ways the international community can support developing countries as they seek to generate significant amounts of domestic and foreign investment required to meet their Sustainable Development Goals by 2030. These kinds of initiatives can help catalyse domestic and foreign private capital at much greater scale by mitigating the risks that impede investors from pursuing otherwise attractive infrastructure and industrial investment opportunities that would create jobs and reduce poverty", said Richard Samans, Head of the Centre for the Global Agenda, and Member of the Managing Board, World Economic Forum.

"I am proud that Canada has played a lead role in the creation of Convergence with the tremendous support of the other founding members. We know that post-2015, financing the SDGs will be challenging. Innovative initiatives like this will help expand the pool of foreign and domestic capital for projects that accelerate social and economic progress in the developing world ", said Christian Paradis, Minister of International Development and Minister for La Francophonie, Canada.

The first Blended Finance Initiatives will be formally announced at the United Nations Financing for Development Conference in Addis Ababa on 15 July. Senior ministers and international financial institutions will discuss how Blended Finance can help achieve the SDGs.

"There is plenty of money in the world available for sustainable development. Blending public and private finance is the best way to mobilize the $4 trillion needed to achieve the proposed Sustainable Development Goals", said Erik Solheim, Chair, Development Assistance Committee (DAC), OECD.

Tagged:
Copyright © 2015 World Economic Forum. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 600 reports a day from more than 90 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.