On 26 November 2025, alongside the Africa Investment Forum in Rabat, Boston Consulting Group convened a closed-door roundtable of nearly twenty Presidents, CEOs, and senior leaders from development finance institutions (DFIs), multilateral development banks (MDBs), export credit agencies (ECAs), project developers, commercial investors, and catalytic funds.
It was one of the most senior gatherings on blended finance held on the continent in recent years — and the timing could not have been more significant.
A moment of rising urgency
Africa faces a rapidly intensifying investment gap. Fiscal space is tightening, public debt has surged, and climate impacts are accelerating. Yet the continent’s long term opportunity remains extraordinary: demographic growth, critical minerals, renewable energy potential, new industrial corridors, and a rising entrepreneurial ecosystem.
Blended finance, the deliberate combination of commercial, concessional, and philanthropic capital, offers the potential to be a key lever to accelerate investment at the speed and scaled required.
However, progress has been challenging. From Addis (Finance For Development ‘FFD’ 3) in 2015 to Seville (FFD4) in 2025, the core challenges remain frustratingly familiar.
Incrementalism is no longer an option. A step-change is required.
Familiar Challenges – With New Clarity
The discussion quickly recapped those familiar challenges that have held back the progress of blended finance from truly achieving scale. Project pipelines remain underdeveloped, and the project-preparation capabilities that exist are fragmented, overlapping and lack sufficient coordination. Deals – at the individual transaction as well as fund level – are bespoke, and therefore slow and costly to close. This is compounded in Africa by the fact that 50% of transactions by volume occur on the continent, but only 20% by value – deals are smaller, and smaller deal economics are more challenging and lead to far lower mobilization rates of commercial capital. The regulatory context continues to remain challenging. High capital adequacy requirements, single-obligor limits, and rigid collateral treatment reduce the incentive for banks and DFIs to engage in blended structures—even when those structures materially de-risk the transaction.
But what was more striking were the less often articulated frictions that emerged. Certainty of blended finance being available can matter more than the amount. Developers emphasized that unpredictability in concessional capital — rather than its scarcity — is a bigger obstacle. Without confidence that risk-mitigation layers will be in place, they slow project development or walk away entirely. FX risk is not a side issue — it is the issue. The need for credible, scalable local-currency solutions is becoming existential for African markets.
One observation cut across the room: a great deal is happening, but not yet together. Project-preparation facilities are proliferating, fund-structure templates are emerging, new guarantee schemes are being launched — but these initiatives rarely interlock. Fragmentation, rather than capability, has become the binding constraint.
Real reasons for optimism
For all the frustration in the room, there was genuine momentum, around four points:
Reference points and norms are emerging. Research presented by BCG [insert link] showed that over 90% of blended-finance funds can map into five archetypes, opening the door to reusable templates and dramatically lower transaction costs. Although this finding was focused on blended finance funds, it speaks of the potential for the sector to start to take a critical, analytical look across the experience so far, and start to develop a more grounded and reuseable set of benchmarks and norms that can guide the field. This is the beginning of blended finance maturing as a market building tool.
Programmatic approaches to developing pipeline are gaining ground. Initiatives such as Mission 300 (a World Bank/African Development Bank plan to provide electricity to 300 million people in sub-Saharan Africa by 2030) demonstrate the positive effect of integrating project development, concessional design, and commercial alignment from the outset.
One of the clearest signals from the discussion was that new actors are leaning in with greater intentionality, especially on the risk-taking end of the capital spectrum. African institutional capital—pension funds, sovereign wealth funds, insurers—has historically invested offshore, but there is now a discernible shift toward domestic resource mobilisation and a desire to anchor projects locally. If this trend continues, it could mark the beginning of a self-sustaining African blended-finance market, with African capital investing in African opportunity.
Alongside this, Export Credit Agencies (ECAs) signalled a readiness to engage more directly as risk-mitigation partners. Their involvement, especially when paired with MDBs and DFIs, could materially expand the risk-sharing toolkit available for infrastructure and energy transactions.
Another notable shift was a clearer articulation of where philanthropy can play a system-critical role—not only by de-risking transactions, but by funding early-stage project preparation, country delivery capacity, and demonstration deals that commercial investors can later scale. Several participants noted that the real bottleneck is not concessional capital per se, but the lack of predictable, early catalytic funding upstream. This creates an opportunity for philanthropic partners to become the organising spine of a more programmatic, continent-wide blended finance architecture.
A system on the verge of coherence
What was striking in Rabat was not that participants restated the familiar obstacles. It was that, for the first time, those obstacles coexisted with a growing constellation of experiments that are actually working — programmatic pipelines, new catalytic actors entering the stack, early standard-setting, and fresh attempts at risk-sharing. But these efforts remain largely parallel rather than cumulative. Africa’s blended-finance ecosystem is full of promising pilots, yet the system that surrounds them has not caught up.
What Africa now needs is not a new institution but a more coherent operating system: clearer roles, more interoperable tools, fewer bespoke workflows, and a shared knowledge agenda that is grounded in bankable, CIO-grade insight — the kind of practical, replicable intelligence that can turn isolated success stories into a scalable market.
If the actors who shape this space can begin to align these efforts — not through uniformity, but through intentional coordination — blended finance in Africa could move from a decade of incrementalism into a decade of acceleration.
The next step — and an invitation
BCG will continue contributing to this coherence agenda. Our next major effort — to be launched ahead of the World Bank/IMF Spring Meetings in April 2026 — will focus on the question many in Rabat raised: how to calibrate the type and level of concessionally in a way that is consistent, efficient, and investable.
We will be inviting participants of this roundtable — and other leaders at the frontier of development finance — to help shape this work and to reconvene during the Spring Meetings for a follow-on dialogue.
Africa has all the ingredients to lead the world on blended finance. What is needed now is alignment — not around a single model, but around a shared direction of travel. The energy in the room in Rabat suggests that this alignment may finally be within reach.