Public Finance International: Is blended finance a silver bullet or a double-edged sword?
Polly Meeks, senior policy and advocacy officer at Eurodad, discusses the challenges of using blended finance to achieve the Sustainable Development Goals (SDGs). Meeks writes, “[A] growing body of analysis from civil society organizations and official bodies suggests [the] limitations and risks [of blended finance] are significant. Key challenges include: Opportunity costs. … A shortage of compelling evidence on impact. … Weak alignment with development effectiveness principles. … A risk that the real winner will be the private sector in donor countries, at the expense of local development. … [A]s yet there are too few safeguards to prevent blended finance harming sustainable development outcomes for the poorest. Until such safeguards are in place, far from achieving the SDGs, scaling up blended finance risks jeopardizing some of the most fundamental parts of the agenda” (1/30).