Blended Finance can Catalyze Renewable Energy Investments in Low-Income Countries

Achieving the SDGs requires large-scale investment in developing countries. Blended finance—using concessional public funds to attract private investment—helps de-risk projects and enable impactful investments, especially in emerging markets. 

Since 2015, annual blended finance flows have averaged $9 billion, with notable success in Sub-Saharan Africa, particularly in climate-smart energy. Africa faces a major electricity access gap; blended finance is critical to scaling off-grid solar solutions. In Nigeria, the Daybreak project illustrates how concessional subordinated debt attracted senior commercial financing and outcompeted diesel. The DRC’s Scaling Mini-Grid initiative, backed by IFC and the World Bank, is expected to mobilize $400 million and benefit over 1.5 million users. 

Despite progress, blended finance remains underutilized and volatile. Strategic collaboration and replicable models, like Scaling Mini-Grid, are vital to unlocking consistent private capital and advancing sustainable infrastructure investment across low-income regions.