Blended Finance in the Poorest Countries: the Need for a Better Approach

This report critically examines the application of blended finance in the world’s poorest countries, arguing that current approaches are often inadequate and misdirected. It finds that most blended finance is not channeled towards the countries with the greatest need and frequently fails to mobilise genuinely additional private investment. The authors call for a renewed focus on development impact, greater transparency, and a fundamental shift away from simply subsidizing private investors. They recommend better targeting of concessional finance to ensure it addresses market failures and supports inclusive growth.