I recently spoke with journalist Chris Hall for a Responsible Investor article examining whether blended finance can move from successful individual transactions towards genuinely scalable models for climate investment in emerging markets and developing economies.
The article looks at a new generation of approaches—including aggregation, securitisation, guarantees and originate-to-distribute models—designed to create assets that better match the scale, risk and liquidity requirements of institutional investors. Recent initiatives from MDBs, DFIs and private asset managers suggest that this market is beginning to evolve beyond bespoke transactions. Pasted text
My contribution focused on what needs to happen alongside financial innovation. MDBs and DFIs can help strengthen local asset pools, deepen domestic capital markets and support better regulatory and policy conditions, rather than relying solely on concessional finance to insulate investors from structural weaknesses. Country platforms can also help connect inward investment with national development, climate and economic priorities.
The harder challenge is ensuring that scalable models can extend beyond relatively mature mitigation investments and middle-income markets. Ultimately, the test is not simply how much private capital is mobilised, but whether these approaches expand the investable frontier and contribute to lasting development outcomes.