Blended Concessional Finance Principles for Private Sector Projects

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Blended Finance is one of the complementary tools that IFC uses to create markets and bring about development impact. IFC uses a disciplined and targeted approach when it comes to blending concessional donor funds with its own commercial funds by applying the following five principles:

  1. Economic Rationale for Blended Concessional Finance
    Contribution that is beyond what is available, otherwise absent from the market, and should not crowd out the private sector.

  2. Crowding-in and Minimum Concessionality
    Contribute to catalyzing market development and mobilization of private sector resources, with concessionality not greater than necessary.

  3. Commercial Sustainability
    Impact achieved by each operation should aim to be sustainable and contribute towards commercial viability.

  4. Reinforcing Markets
    Addresses market failures effectively and efficiently minimizes the risk of market distortion or crowding
    out private finance.

  5. Promoting High Standards
    Promote adherence to high standards, including in areas of corporate governance, environmental impact, integrity, transparency, and disclosure.