Blended finance Definitions and concepts

Blended finance has played a role in development financing for some time and is gaining greater attention among donor governments. However, its potential for generating needed investment for the 2030 Agenda for Sustainable Development and the Paris Agreement is constrained by the absence of a mutually agreed understanding of blending even within the development co-operation community. This chapter presents the range of definitions in use, the characteristics and boundaries of blended finance, and efforts to build a framework that addresses concerns about blending while allowing it to achieve its potential. It also highlights key concepts associated with blending such as concessionality, additionality, mobilisation and catalysation.