Blended Finance for State-led Decarbonization: How Public Interventions Direct Private Finance Towards Green Investments

This paper investigates how state-led interventions using blended finance can effectively steer private capital towards green investments essential for decarbonization. It analyses the specific mechanisms through which public finance can de-risk and incentivize private sector participation in renewable energy and other low-carbon infrastructure projects. The study explores different models of public-private co-investment and identifies key factors for success, including clear policy signals, credible public commitment, and well-designed financial instruments. The research provides critical insights for policymakers on structuring interventions to accelerate the green energy transition.