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How National-Level Blended Finance Can Catalyze the Climate Transition in Emerging Markets

In this paper from the World Economic Forum, the authors state that the current capital flow toward climate transition is insufficient, and there will be a particular shortfall in funds directed at emerging markets and developing economies. Blended finance offers an adaptive funding pathway to help overcome these barriers.

Blended finance leverages catalytic capital from public or philanthropic sources to energize private sector investment in developing countries, helping nations realize their climate action targets and goals. If executed correctly, blended finance can potentially create a three to five times multiplier effect leveraged from concessions or public funds, which could be extremely crucial to help close the funding gap required for climate action.