A public-private coalition of major financial institutions and governments has revealed its plans to launch a dedicated company aimed at accelerating private investment in sustainable development projects across emerging markets and developing economies (EMDEs).
Blended finance brings together public or philanthropic capital and private funding through a common investment structure, enabling investors to invest in certain types of investments that have high perceived risk profiles, such as new climate mitigation-related technologies.
The coalition – Scaling Capital for Sustainable Development (SCALED) – was first introduced as the Hamburg Sustainability Platform at last year’s Hamburg Sustainability conference. Since then, it has evolved into a formal partnership of financial institutions and governments including Allianz, AXA, Zurich Insurance Group, Canada, France and the UK, which is focused on growing sustainable blended finance-focused investment opportunities across EMDEs.
At this year’s conference, which took place this week, the coalition has said it is preparing the launch of a service provider company that will be focused on investment standardization.
Achim Steiner, Administrator at the UN Develop Program, said:
“We are in a time of uncertainty with rising geopolitical divisions, where development pathways are under pressure because of aid cuts, trade tension, and the debt crisis. What we need now is more cooperation, not less. It is in opportunities like the Hamburg Sustainability Conference where we find those critical touch points to take on big ideas, rebuild trust, advance innovative solutions, and forge meaningful connections across communities around the world.”
The new company is expected to commence operations by the end of this year. It will be tasked with developing and establishing standardized financial vehicles that both public and private investors can utilise.
It will also play a key role in matchmaking, bridging persistent financing gaps across climate, infrastructure and development sectors.
SCALED expects the initiative to unlock billions of dollars in private investment over the coming years.
The announcement came as part of a wider series of developments at the conference, which convened around 1,600 global leaders across government, business and academia.
The Asia-Pacific Blended Finance Community of Practice was also launched. Serving as a regional hub to coordinate and mobilise blended finance solutions for sustainable development, it is expected to enhance collaboration, knowledge exchange and deal origination.
