Sustainable Markets Initiative launches Blended Finance Task Force to build new pathways for an investable pipeline of projects
Driving momentum to mobilize additional private capital, scale investment and reduce risk
London, England: The Sustainable Markets Initiative (SMI) announced today the launch of its Blended Finance Task Force. The Task Force will build on the blended finance work undertaken to date and aims to develop solutions that will help mobilize finance at scale and promote innovation to drive industry, create value and support sustainable solutions.Members will help to unlock capital that is needed to realize global commitments on climate change and sustainable development, including in emerging economies where climate change has an even greater adverse impact.
The Task Force will be led by Marc-André Blanchard, Executive Vice-President, and Head of CDPQ Global and Global Head of Sustainability at CDPQ.
“Climate change requires an extraordinary amount of capital investment to scale solutions on a global level. It also requires the private and public sector working together to create partnerships that will get things done. Blended Finance takes hard to do investments and makes them more scalable and investable by considering specific risks related to the different markets,” said Blanchard. “In the end, it has the potential to bring trillions of dollars to advance a wide range of issues and provide global benefits.”
Blended Finance can play a key role in making hard to invest projects, more investable, driving greater capital flows and expanding the use of blended and layered financing. Blended finance uses concessional finance, such as grants or loans from governments or philanthropy, to lower the risk return nexus – therefore attracting private investors and increasing the volume of financing available. In doing so, blended finance can scale clean technologies, renewable energy projects and other sustainable initiatives that otherwise may have not been initiated due to their complexity, geography or implementation risk. Blended Finance can also demonstrate the power of leveraging flexible financing which can produce loan guarantees or first-loss structures that then can attract private capital and mitigate investment risk.
Recognising best in class practices and other market initiatives underway, the Task Force will ensure to collaborate and coordinate with leaders to build momentum and scale solutions. Working with other SMI financial and industry Task Forces, the Blended Finance Task Force will also seek to collaborate on existing and new blended finance activities.
The Task Force will support the following objectives:
Developing a stronger pipeline of “investor-ready” projects
Scaling the use of de-risking tools and solutions
Increasing engagement between the private and public sector
The Task Force will promote leadership and collaboration in the Blended Finance space, in the pursuit of tangible, scalable and lasting sustainable business and financing practices. It will help to identify blended finance solutions that enable the private sector to dramatically scale investment and deploy capital to accelerate the transition to net zero, including in emerging and developing markets.
The Blended Finance Task Force is aligned to the SMI’s Terra Carta and will contribute to the acceleration of solutions that are financially, socially, and environmentally sustainable, and advance the SMI’s mission and support the United Nations Sustainable Development Goals.
Visit the Blended Finance Task Force page here
View the full PDF press release here