Blended finance is the strategic use of development finance for the mobilisation of additional finance towards sustainable development in developing countries. It attracts commercial capital towards projects that contribute to sustainable development, while providing financial returns to investors. This innovative approach helps enlarge the total amount of resources available to developing countries, complementing their own investments and ODA inflows to fill their SDG financing gap, and support the implementation of the Paris Agreement.
The OECD's blended finance work focuses on blended finance most broadly - and on specific instruments such as Green, Social, Sustainability and Sustainability-linked (GSSS) bonds - while ensuring good practice impact approaches.
The DAC Blended Finance Principles (pdf) and accompanying Guidance are effective policy tools for donor governments, development co-operation agencies, philanthropies and other stakeholders to design and implement effective and transparent blended finance programmes.
The OECD-UNDP Impact Standards for Financing Sustainable Development (IS-FSD) are a best-practice guide and self-assessment tool for public and private investors seeking to optimise their positive contribution to the SDGs.
The Standards address four areas - Strategy, Management, Transparency & Accountability, and Governance - and the accompanying Guidance provides detailed support in aligning with each of the Standards.
What is the OECD DAC Community of Practice on Private Finance for Sustainable Development (CoP-PF4SD)?
Established in 2020 by the OECD Development Assistance Committee (DAC) - an international forum of many of the largest providers of aid - the CoP-PF4SD is a platform for mutual learning and exchange between DAC members, bilateral and multilateral development finance institutions and the private sector. It seeks to promote greater use of both blended finance strategies and robust impact management and measurement practices in the development finance ecosystem.