Blending Public and Private Finance

This World Bank note explores blended finance, which combines public and private funds, highlighting its various forms and potential pitfalls like market distortion and inappropriate risk allocation. It emphasizes that public finance can bring different risk appetites and time horizons, structuring assets to meet private sector profiles. The paper suggests blended finance can make marginally profitable projects attractive, acting as a stepping stone to comprehensive reforms and demonstrating commercial viability in risky sectors.