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Blended Finance Could Play Critical Role In Attracting Private Capital, Achieving SDGs

The Hill: Unshackle private capital to deliver Sustainable Development Goals
Paul Horrocks, head of the private finance for sustainable development unit at the OECD’s financing for sustainable development division; Aron Betru, managing director of the Milken Institute’s Center for Financial Markets; and Christopher Lee, director of the Milken Institute’s Center for Financial Markets

“…[To achieve the Sustainable Development Goals (SDGs),] the development finance community needs to encourage greater participation by private banks by ensuring the efficient and innovative use of money loaned or invested to support the goals. Blended finance … can play a critical role in attracting private capital. … According to an Organization for Economic Cooperation and Development (OECD) survey, guarantees (financial products that minimize or remove risk for investors) have particular promise. … Additional research into the compatibility of guarantees with regulations would be a significant step forward, but there are more immediate actions that would help make the SDGs achievable. First, modify guarantees to address the needs of private capital. … Second, bilateral and multilateral stakeholders must better align their strategies with those of regulatory policymakers and the private sector. … The SDGs present a unique challenge. Only through alignment, shared responsibility, collaboration, and understanding the impact of regulatory changes on all developed countries’ policies can the goals be reached” (7/16).