IFC’s Report ‘ Using Blended Concessional Finance to Invest in Challenging Markets: Economic Considerations, Transparency, Governance and Lessons of Experience’
8 Oct 2021, 18:11
Hi, I am writing to share the summary and highlights of IFC’s Report ‘ Using Blended Concessional Finance to Invest in Challenging Markets: Economic Considerations, Transparency, Governance and Lessons of Experience’ (published February 2021).
The Report describes the evolution of IFC’s thinking and highlights its principles for governing the use of concessional funds with partners’ commercial capital.
The initial chapters build on existing IFI and OECD research on blended finance (bf) by focusing on the economic rationale of blended finance, issues of transparency and governance. The remaining chapters, most of which have already been published independently, provide a summary of lessons from IFC’s experience of implementing bf, criteria for selecting and structuring infrastructure for concessional finance, scaling up of private investment in low income countries and the rise of returnable capital contribution.
These last three chapters are important since they depart from the dominant emphasis on the ‘developmental’ aspects of bf to provide a clearer focus on the drivers and incentives of bf as a commercial model.
The IFC website notes that from the fiscal year 2010 to 2020, the IFC deployed $1.6 billion of concessional donor funds to support 266 high-impact projects in over  countries, leveraging $5.8 billion in IFC financing and more than $6.8 billion from other private sources.
Given the emphasis on the private sector in the COVID-19 recovery efforts, these figures are likely to expand further and this report is particularly useful in explaining IFC’s rationale in expanding blended finance in low-income countries and Least Developing Countries (LDCs).
Please feel free to share your thoughts.