Blended Finance

This overview from Convergence defines blended finance as the strategic use of development finance and philanthropic funds to mobilise private capital investment in emerging and frontier markets. It explains the core concept: concessional capital is used to de-risk investments and improve their risk-return profiles, thereby attracting commercial investors to projects delivering positive social and environmental impact. The piece outlines the key stakeholders—including DFIs, MDBs, foundations, and private investors—and illustrates how this collaborative approach helps to bridge the significant financing gap for the Sustainable Development Goals (SDGs).