Blended Finance May Be the Answer for Least Developed Economies - Dalberg

As Shanti Krishnan notes in a recent D.Blog post on blended finance, there is a critical investment gap of roughly 2.6 trillion in critical areas such as health, education, food security, climate change and infrastructure to meet the estimated $4 trillion of annual investment needed to achieve the Sustainable Development Goals.  Fortunately, where the resources of public investors (aid agencies, development finance institutions and foundations) will fall short, private investors (e.g., private equity funds, pension funds, insurance companies) are increasingly picking-up the slack, particularly in emerging and frontier markets.  With a 26 percent increase in flows (with an increasing share coming from other other emerging and frontier markets).  Krishnan explains how public investors can use public finance to mitigate the risks in such markets and provide additional incentives to drive further private flows to such markets, where they might otherwise be less likely to go without the proper enabling frameworks or additional incentives.  As Krishnan explain, "When directed properly, this influx of private capital into and between emerging and frontier markets can be a powerful force for global development by helping to support investments that generate social, economic, and environmental impact.

Read it here on the D.Blog from Dalberg.