Blended Finance and Its Potential for Development Cooperation

This report analyses the concept of blended finance and its potential role within development cooperation, with a specific focus on Austria's engagement. It critically assesses the opportunities and risks, questioning whether blended finance effectively targets poverty reduction and the Sustainable Development Goals (SDGs). The paper examines the influence of private sector priorities and highlights the danger of Official Development Assistance (ODA) being diverted to de-risk private investments that might have occurred anyway. It recommends a cautious approach, emphasizing transparency, strong development criteria, and alignment with partner country priorities.