Blended finance instruments and mechanisms

Blended finance involves the use of different financial instruments that can be used alone or together to address unfavourable risk-return profiles of investment in developing countries. This chapter outlines the main risks facing commercial investors in developing countries. It presents the types of financial instruments that can be used in blended finance and outlines the main mechanisms and structures that blending entails. The chapter presents examples to illustrate how different instruments and approaches come together to crowd in private, commercial investment for development outcomes.