IFC is one of the world’s largest implementers of Blended Concessional Finance for private sector operations.
IFC is a global leader in crowding-in private finance to deliver sustainable impact in the developing world. Blended Concessional Finance is one of the most significant tools that a development finance institution like IFC can use, in cooperation with development partners, to address market failures and to help mobilize private investment in pioneering projects and challenging environments.
In its Blended Finance practice, IFC uses relatively small amounts of concessional donor funds to mitigate specific investment risks and help rebalance risk-reward profiles of pioneering investments that are unable to proceed on strictly commercial terms.
Blended finance solutions at IFC can be structured as debt, equity, risk-sharing, or guarantee products with different rates, tenor, security, or rank. Under select facilities, they can also be performance-based incentive structures. Solutions are tailored to address specific market barriers and failures and the requirements of donor partners.
IFC’s Blended Finance practice uses concessional resources effectively, efficiently, and transparently to deliver on impact.
IFC has a well-established, formal, and rigorous approach to blending concessional funds alongside its own capital, including the principles and governance by which it applies such funds.
The use of blended finance allows IFC to fill financing gaps by addressing market barriers and attracting private sector investments to areas of strategic importance with high development impact. As pioneering projects, when successful, blended finance investments pave the way for other investors and help create markets. With increased interest in the use of blended concessional finance in transformative projects, IFC pays particular attention to its ability to measure project outcomes and impact. Read more about IFC’s Anticipated Impact Measurement and Monitoring (AIMM) system.
From fiscal year 2010 to 2022, IFC has deployed $3.1 billion of concessional donor funds to support 369 high-impact projects in over 50 countries, leveraging $17.2 billion in additional financing.
- $3.1BILLIONIN CONCESSIONAL DONOR FUNDS
- $17.2BILLIONIN ADDITIONAL FINANCING