Scope of private blended finance

The strategy is to attract commercial capital to projects that contribute to sustainable development.

Blended finance, both as an innovative approach and practice, is lately gaining currency as an emerging tool for development financing in the developing countries where financing needs are acute. According to the OECD (2017) definition , "blended finance is the strategic use of development finance for the mobilisation of additional finance towards sustainable development in developing countries". The strategy is to attract commercial capital to projects that contribute to sustainable development while providing financial returns to private investors. Many see blended finance as a new departure in development finance to leverage private funding for public utilities, traditionally seen purely as the government's responsibility.