Global political stability has faced significant setbacks in recent years. Conflict and violence are on the rise, with armed confrontations affecting millions in Ukraine, Gaza, the Democratic Republic of the Congo (DRC), and beyond. At the same time, many nations continue to grapple with the economic and societal fallout of the COVID-19 pandemic, which led to sharp contractions in
gross domestic product (GDP), soaring debt, and rising poverty and inequality. Climate-induced disasters are further threatening stability, as extreme weather events such as floods, droughts, and hurricanes disrupt livelihoods, intensify displacement, and worsen resource scarcity. These circumstances underscore the necessity of scaling up support to fragile and conflict-affected situations (FCS). 

Blended finance in FCS remains limited. Convergence’s Historical Deals Database (HDD) recorded only 54 blended finance deals targeting countries on the World Bank’s Fragile and Conflict Affected Situations List for five consecutive years (2019–2023), with a total value of $4.5 billion.

This data brief examines the key challenges and opportunities associated with the use of blended finance in FCS, drawing on trends from Convergence’s HDD and incorporating insights from interviews with industry stakeholders. Although blended finance transactions in FCS have been limited, they provide essential lessons on capital mobilization within these complex environments and lay valuable groundwork for further discussion.

DB Blended Finance in Fragile and Conflict-Affected Situations V4

Blended Finance, Fragile and Conflict-Affected Situations, Convergence