Hello, welcome to Impact Insights, the podcast series of Assyria as Land managers.

In this episode, John Duncan, the CEO of Astoria, we'll talk about blended finance.

In recent years, blending has become a common development finance term.

There is some confusion about its meaning, how it works and how it fosters development.

So blended finance is the use of catalytic capital from public or philanthropic sources

to increase private sector investment in sustainable development goals.

What we know is that to achieve the SDGs, a significant scale up of investment is required today.

The UN estimates that the total financing needed to achieve the SDGs is nearly $4 trillion annually.

Current levels of development financing are by a multilateral development banks,

development finance institutes is estimated at 2.5 trillion, meaning that there's a funding gap

in order to realize the SDGs in developing countries.

So blended finance is important in a sense that it allows the scaling and catalyization of private

sector capital.

Bended finance transactions typically have a couple of important characteristics.

One is that they should contribute towards the SDGs they should

contribute towards the achievement of a of a positive overall financial return

and thirdly they are identified by the fact that public or philanthropic

partners are really the catalytic participants in the transaction that public or philanthropic partners are really the catalytic participants in the

transaction that actually allows it to occur. These kinds of transactions can typically take

the form of concessional finance that may be provided where a philanthropic or public investor provides funds on a below market return

basis within a capital structure to lower the overall cost of capital or provide an additional

layer of protection to private investors. So concessional capital would be the example.

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