It’s widely recognised that there is an enormous gap between transition finance requirements and what is being delivered globally, with a particularly stark gap in emerging and developing markets. A key problem is how to crowd in private sector investment, given that the private sector will need to deliver around 3 of every £4 of finance globally to finance the net zero transition. To resolve this conundrum, it’s equally widely recognised that there is an urgent need to scale up “blended finance” : the deployment of public or philanthropic capital to mobilize private capital.
While the need for blended finance has long been recognised, the market is smaller than it needs to be, by at least an order of magnitude. A number of barriers prevent it from scaling: lack of investable deal-flow; suboptimal use of blended finance tools by concessional investors; lack of a market place to enable interaction between public and private actors; and lack of institutional investor orientation towards this kind of investment.
The aim of the Blended Finance Lab is to complement LSE’s existing strategic and public policy work on development finance with regular on-the-ground dialogue about how to address the practicalities of getting blended finance done, with a particular focus on how best to secure private sector participation.
The Lab brings together investors, policy makers, development banks, and academics to discuss, identify, and resolve key blockages to the necessary scaling of blended finance: scaling the blended finance marketplace, improving blended finance practices and education, growing the blended finance practitioner community and developing more investable opportunities. The focus is on action, not just reports.
The Blended Finance Lab is funded by the Global School of Sustainability.
For more information contact Tom Gosling t.gosling1@lse.ac.uk
