Blended Finance -what It Is, How It Works and How It is Used

This briefing provides a critical perspective on blended finance, examining its mechanisms and implications for sustainable development. While acknowledging its potential to mobilise private capital, the report raises significant concerns about its effectiveness and risks to the world's poorest. It warns that blended finance initiatives may create harmful subsidies, fail to reach those most in need, and often lack transparency and accountability. The paper recommends that development goals must drive these initiatives, calling for strong safeguards, alignment with country priorities, and robust development impact measurement frameworks.