Blended Finance Bulletin

Foreword

Welcome to the inaugural edition of the India Blended Finance Collaborative (IBFC) Bulletin!

IBFC is a pioneering Blended Finance initiative with the aim to catalyze Innovative Finance in India and being built with the active support of United States Agency for International Development (USAID). The collaborative is a multi-stakeholder initiative and will work with a diverse base of commercial, philanthropic, and public stakeholders to scale-up blended finance structures and deepen sector-specific knowledge.

Blended finance is the strategic use of development funds, such as those from government, aid and philanthropic sources, to mobilize private capital for social and environmental results, such as improving education, agriculture, healthcare, climate mitigation, and more. Through Blended Finance, development finance and philanthropic funders are able to leverage and enhance funding from commercial sources to help address development challenges via different mechanisms including innovative risk sharing mechanisms, concessional debt or equity capital, results-based financing as well as more traditional technical assistance programs.

The Indian Impact Investors council (IIC) has been tracking the impact investing ecosystem for years. Through robust data driven research and focused advocacy efforts, IIC has been active and successful in reaching a variety of stakeholders to move the needle on some nascent segments of the impact investing market such as climate-tech sector and leverage greater flows of impact capital. As an industry network, conversations with India focused LPs and asset managers reveals considerable interest in innovative financing structures for impact. Despite Blended Finance's immense potential to create sustainable, catalytic impact, the ecosystem is still in its infancy in India. Challenges include a lack of sufficient data and experience on suitable structures and sectors in addition to the low number of active participants in blended finance transactions.

The goal for IBFC is to use an integrated approach to support the development of the Indian blended finance market by:

1. Sharing local market knowledge and experience to help build understanding and engagement in the blended finance ecosystem;
2. Building local capacity and collaboration across different structures and stakeholders to drive synergy and wider participation;
3. Deepening understanding of local policy and regulatory guidelines which can help reduce the overall cost and time of structuring transactions.

The IBFC Bulletin is a sector initiative to drive discovery and discussion on different opportunities in the blended finance market and features interviews, articles and case studies from key sector experts. The Voice of Market section features interviews and discussions with leading organisations and experts who share their perspective on the state of the market, gaps and opportunities to build scale as well as emerging sectors and structures which the industry is prioritising and require greater attention. In the Research and Insights section we share opinion pieces written by experts on the trends, best practices and innovation in blended finance transactions and structures. The third section seeks to spotlight Case Studies which provide the practitioner perspective and learnings from executed transactions. The last section, What's New, covers emerging blended finance structures that are in the process / pipeline of implementation in the Indian market.

I hope that this newsletter allows various stakeholders to have a better understanding of how the blended finance market is evolving and shaping up and also help drive discovery and interest in new and emerging transactions and collaborations. By facilitating robust public-private collaboration, Blended Finance structures present a strong and unique opportunity for investors, foundations and the Government to develop more effective strategies that build upon each other's strength while mitigating risks and we look forward to working towards this goal.