Strengthening the Local Dimension of Blended Finance

The document outlines the role of blended finance in mobilizing commercial capital for sustainable development goals, emphasizing the need for DFOs to anchor these activities in local contexts. It recommends that DFOs develop explicit local context policies, align investments with national development strategies, and deepen partnerships with local financial institutions. Additionally, it highlights the critical need to increase local currency financing and develop cost-effective foreign exchange solutions to mitigate risks for international investors.

• Blended finance is used to mobilize commercial capital for sustainable development goals, including climate action, poverty reduction, and reduced inequalities, by reducing perceived risks or improving returns.
• To maximize development impact and additionality, DFOs should implement explicit policies on local context and create country or sub-regional strategies that align with national development plans rather than making ad hoc investment decisions.
• DFOs are encouraged to strengthen partnerships with local entities such as national development banks, local pension funds, and Sovereign Investment Funds (SIFs) to scale activities, or provide technical and financial support to establish such institutions where they are missing.
• There is a significant requirement to increase the proportion of finance provided in local currency, as the demand for foreign exchange (FX) solutions to mitigate currency risk for international investors currently exceeds the available supply.

APA

Webmaster (2020). Strengthening the Local Dimension of Blended Finance. African Center for Economic Transformation. https://acetforafrica.org/research-and-analysis/insights-ideas/policy-briefs/strengthening-the-local-dimension-of-blended-finance/

Chicago

Webmaster. Strengthening the Local Dimension of Blended Finance. African Center for Economic Transformation, 2020. https://acetforafrica.org/research-and-analysis/insights-ideas/policy-briefs/strengthening-the-local-dimension-of-blended-finance/.

Wikipedia

{{cite report |last1=Webmaster |title=Strengthening the Local Dimension of Blended Finance |publisher=African Center for Economic Transformation |date=28 June 2020 |url=https://acetforafrica.org/research-and-analysis/insights-ideas/policy-briefs/strengthening-the-local-dimension-of-blended-finance/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{webmaster2020strengthening, author = {Webmaster}, title = {{Strengthening the Local Dimension of Blended Finance}}, institution = {African Center for Economic Transformation}, year = {2020}, month = jun, url = {https://acetforafrica.org/research-and-analysis/insights-ideas/policy-briefs/strengthening-the-local-dimension-of-blended-finance/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }