Mobilisation of capital
Meeting the scale of the opportunity will require increased mobilisation across the spectrum of capital:
(1) concessional capital, mobilised from the public sector, philanthropy and non-traditional donors, must grow in both volume and flexibility, and be used strategically to attract and amplify private capital.
(2) non-concessional capital, must be drawn in through blended structures that enable investors to participate in higher-risk or harder-to-reach markets. This includes supporting existing market participants, such as commercial banks and asset managers, to extend their reach into underserved sectors.
Mobilisation will also require the closing of communication and mandate gaps between public, philanthropic and commercial investors. Building trust, establishing clarity on objectives, and ensuring the right incentives and governance are in place will enable all actors to work together towards shared impact goals.
Mobilisation will also require the closing of communication and mandate gaps between public, philanthropic and commercial investors. Building trust, establishing clarity on objectives, and ensuring the right incentives and governance are in place will enable all actors to work together towards shared impact goals.
State of play
Mobilisation of capital is essential to address the scale of today’s global challenges. Momentum around blended finance is growing, but capital mobilisation remains constrained by persistent risk perceptions, structural barriers and investor mandates. Greater clarity, consistency and trust between concessional and commercial actors will be critical to unlock investment at scale.
Core enablers of progress
Reframe concessionality as strategic investment: Position public and philanthropic capital as catalytic investments that create the conditions for markets to function, not as one-off subsidies. Adopt language that emphasises long-term value creation and partnership, and draw a wider range of concessional funders into the field.
Clarify the role of concessional capital: Define when concessional funding is intended to prove new models, support early-stage risk or accelerate commercial investment. Clarity of purpose supports stronger fund design and more consistent mobilisation.
Develop a shared approach to sizing and concessionality: Build on frameworks such as the DFI Enhanced Blended Concessional Finance Principles and the OECD Blended Finance Principles to define how capital is combined. Provide benchmarks on use cases and return expectations and create practical guidance for how concessionality is sized and justified in transactions.
Apply targeted and minimal subsidy: Use concessional capital only where commercial investment remains unviable to preserve scarce resources and avoid market distortion. Respect that different stakeholders have varying mandates and risk-return expectations, and apportion risk appropriately within that framework.
Bridge gaps with layered capital structures: Expand access to multi-layered blended structures that address the gap between risk-averse investors and impact-driven funders. Provide tools for both funded and unfunded approaches, but ensure funded first-loss capital is available to take pioneering risk, without creating structures that socialise risk and privatise profit.
Align structures with investor mandates: Engage commercial investors in the design of blended structures, so that products align with their mandates and risk frameworks. Building structures with investors’ needs in mind from the outset accelerates uptake and embeds blended finance in mainstream practice.
Increase transparency through shared data: Collect and share data on returns, risk allocation and subsidy levels relative to impact to improve pricing and decision-making. Greater visibility will reduce duplication, reduce market distortion and build trust across the capital spectrum.
Formalise philanthropy’s role in blended finance: Develop guidance and incentives that recognise where philanthropic capital can take early-stage risk, fund design or build the ecosystem. Explore policy levers such as matched funding, tax reliefs and joint commissioning to scale philanthropic participation.
Momentum in the market
Emerging Africa and Asia Infrastructure Fund (EAIF) a blended finance vehicle that mobilises private investment into critical infrastructure across Africa and Asia, combining public, private and donor funding to deliver large-scale development impact.
Climate Fund Managers: Climate Investor One, Two and Three blended finance funds that mobilise institutional capital for climate-resilient infrastructure in emerging markets, using layered capital structures to attract commercial investors.
Meridiam Infrastructure Africa Fund demonstrates how blended finance can mobilise long-term institutional investment into sustainable infrastructure across Africa, balancing commercial returns with measurable social and environmental impact.
DFI Enhanced Principles for Blended Concessional Finance were developed by a group of development finance institutions. These principles set a shared standard for how concessional capital should be deployed, ensuring transparency, discipline and the avoidance of market distortion.
Convergence: Private Investment Mobilization Project insights highlights where standardisation can drive efficiency, but also recognises that flexibility is essential to meet local market needs.