New research: Blended finance for climate action - Good value for money?


During COP28 the issue of ‘blended finance’ for climate action was a major focus - particularly at the inaugural Business and Philanthropy Climate Forum. This event saw global funds – the Green Climate Fund, Allied Climate Partners and Allianz Global Investors – collectively announce the mobilisation of US$ 5 billion through several blended finance structures, bringing together philanthropies, development finance institutions (DFIs), and the private and public sectors.

Today a new report has been published which examines the expansion of blended finance in climate action - broadly defined as a combination of public concessional finance (finance with more generous terms than the market has to offer) with private or public resources, with the aim of mobilising development finance from other actors. 

Written and coordinated by the European Network on Debt and Development (Eurodad), and supported by ActionAid, Blended finance for climate action - Good value for money? is one of the first in-depth studies to outline the risks and opportunities associated with blended finance specifically for climate projects. 

It is  accompanied by two case studies - South Africa’s Just Energy Transition Partnership (JETP), and the World Bank IFC Scaling Solar Programme in Zambia. 

The report will also be presented during a webinar on February 28th. 

Author Farwa Sial, Senior Policy and Advocacy Officer at Eurodad said: “Blended finance is often seen by governments and international financial institutions as a silver bullet when existing financing goals are not being met.  But during my research I found numerous risks involved with the use of blended finance. 

“This financing instrument often implies debt, which must be paid back. And there are serious issues around transparency and accountability related to how the funds are used. In a time when a growing number of countries are facing serious debt crises, relying on debt-creating instruments is a problematic approach.”

The report has several recommendations for governments and DFIs if the continuing expansion of blended finance for climate is to be considered. 

Farwa Sial said: “Governments need to ensure that public money could not have achieved better climate impacts if spent in alternative, cost effective ways. Improvements to transparency around how blended finance for climate is spent - and a far greater involvement of local entrepreneurs and communities - are also crucial.

“Blended finance should not substitute rich governments delivering on their climate commitments and lowering their emissions.”



Spokespeople available: 

Farwa Sial, Eurodad 
Anders Dahlbeck, Climate Justice Programme Manager at ActionAid Denmark

Media contact:

Julia Ravenscroft, Communications Manager, Eurodad: [email protected]/ 07957 184 695. 

Notes to editors: 

  • Farwa Sial will present her research during a webinar held on February 28th. More details will be published here soon. 
  • The European Network on Debt and Development (Eurodad) is a civil society network advocating for democratically-controlled, gender-just and human rights-based financial and economic systems.
  • ActionAid is a global federation working with more than 41 million people living in more than 72 of the world’s poorest countries. We want to see a just, fair, and sustainable world in which everybody enjoys the right to a life of dignity and freedom from poverty and oppression. We work to achieve social justice and gender equality and to eradicate poverty.