Capturing the economic opportunity in clean and resilient energy, infrastructure, and industry across emerging markets and developing economies requires stronger collaboration between development finance institutions and private finance. In recent years, blended finance funds have increasingly shown they can mobilise commercial capital into new markets and sectors, allocating risks more effectively between commercial and catalytic investors.
Yet, despite this progress, structuring blended finance funds remains complex, time-consuming, and costly, constraining the growth of the market. Too often, participants lack a shared understanding of how to structure funds to use scarce concessional capital efficiently, while meeting investors’ regulatory and mandate requirements.
This report seeks to help address that challenge. Building on the first Scaling Blended Finance publication and on the direct experience of BII, GFANZ, and BCG, it translates observed, real-world market practice into a robust, practical, voluntary use framework for fund managers, catalytic investors such as development finance institutions, and commercial investors. By providing a common language for why concessional capital is needed, in what form, and in what amount, it aims to help reduce the complexity and cost of structuring these funds, and to support new participants—including fund managers based in emerging markets—in entering this space.
We are grateful to the many practitioners, investors, fund managers, and market experts whose insight and experience have informed this work. They show what can be achieved when funds are well designed and catalytic investors are willing to engage. We hope the framework and case studies presented here contribute to greater transparency, speed, and confidence across the market and, in turn, help mobilise more private capital where it is needed most.
