Outcome-Based Concessional Blended Finance for Sustainable Financing: Key Lessons and Insights from Latin America
This study by CIF-TAF and IDB Invest explores how outcome-based concessional blended finance, paired with technical assistance, can drive sustainability in financial institutions (FIs).
Using case studies from Sicredi in Brazil and Produbanco in Ecuador, it highlights evolving finance structures such as green bonds with bullet payments and third-party guarantees tied to decarbonization goals. Key insights include linking concessional terms to outcomes aligned with international sustainability standards, rewarding achievements with below-market rates, deferring assessments to allow long-term impact, and aligning technical assistance to reduce transition costs. It stresses that ambitious yet attainable goals foster institutional engagement.
The report emphasizes continuous innovation, adaptive strategies, and multi-stakeholder collaboration as essential to closing the $4 trillion global sustainable finance gap and embedding climate action and inclusion into financial systems.
