Blog
06 Feb 25
I recently read Mariana Mazzucato’s blog and UN policy brief commenting on blended finance falling short of expectations and the need for a new approach to mobilising private finance. Her piece brought forth issues plaguing blended finance that should be addressed, such as the need for alignment of donors’ goals with those of developing countries themselves and the need for donor transparency.
As the global network for blended finance, Convergence exists to mobilise private investment into sustainable development through blended finance, and we’ve been doing it for nearly a decade. So, we wanted to respond to Dr Mazzucato’s piece and offer our own real world perspective on where blended finance is and how we think it needs to evolve.
While Dr Mazzucato states that blended finance has stagnated, the Convergence data she cites actually shows a notable rise in 2023. And the climate portion of the blended finance market in particular saw its highest ever annual financing total, growing by 120% to US$18.3bn in aggregate investment from $8bn the year prior – the entire market currently sits at around $23bn. Recently, we’ve also seen a small number of very large blended transactions come on the market that have the potential to be replicated and are providing much needed momentum (read more in the first story in this edition of The Impact World This Week).
To read the rest please visit Pioneers Post.
About the Author
Joan M. Larrea is an expert in catalyzing investment in places that need it most and brings with her close to 30 years of experience in emerging markets investing. Joan has led Convergence since its inception, establishing it as the leading independent authority on blended finance. Prior to joining Convergence, she led the U.S. Overseas Private Investment Corporation's (OPIC) efforts to partner with philanthropic and private investors to increase capital flows to OPIC's target markets. While there, she also directed a pilot program to finance smaller, high impact, and innovative funds, many of which drew on blended finance structures. Previously, Joan served as a managing director on the emerging markets team at Global Environment Fund, an asset manager dedicated to the energy, environmental, and natural resource sectors. She began her career as an investment officer at International Finance Corporation, the private sector arm of the World Bank Group, where she concluded pioneering transactions in a variety of infrastructure and manufacturing sectors across Asia.
In addition to her Convergence role, Joan serves on the Global Environment Facility's Blended Finance Advisory Group, the Advisory Council for the U.S. Millennium Challenge Corporation, the Investment Committee of the Global Energy Alliance for People and Planet, and the ASIA Panel for Infrastructure Asia in Singapore.
