Start of main content

Blended Finance

Public resources alone will not be sufficient to reach the 2030 UN Sustainable Development Goals, which require an investment of USD 4 trillion annually. Blended finance can be an effective tool to mobilize private capital, driving sustainable, inclusive development while helping to bridge the gap in SDG financing.

As a development finance institution (DFI), FinDev Canada is uniquely positioned to take on greater risk than most private investors. While our primary approach involves deploying core capital to support our lending activities, we also have the flexibility to leverage concessional finance when the conditions are appropriate -- enhancing our capability to catalyse impactful investments.

Our Approach

Blended finance involves the strategic use of concessional capital from public or philanthropic sources alongside commercial capital. In a single transaction, concessional capital can help to de-risk private capital, for instance, by taking a subordinated position or accepting a longer tenor. This approach is effective in catalysing private capital participation. However, it’s essential to apply blended finance judiciously to avoid distorting markets. When used under the right conditions, blended finance enhances the risk-return profile of investments and unlocks greater private sector engagement.

Our Goals

FinDev Canada blends concessional and commercial capital to:

  • Mitigate risk and improve the risk-return profile of investments for private investors
  • Crowd in private sector investors who would otherwise not participate in development finance
  • Support high-impact sectors including sustainable infrastructure, agribusiness and forestry, and the financial industry
  • Advance development goals in gender equality, climate and nature action, and local market development

We are guided by the DFI Enhanced Blended Finance Principles, ensuring our investments are additional, commercially sustainable, and reinforce markets.

Blended Finance in Action

FinDev Canada currently manages two dedicated pools of concessional funding and leads blended finance platforms to mobilise private capital.

  • 3 women working together

    Gender Smart COVID-19 Recovery Facility “2X Canada”

    Capitalization: C$75.9 million from Global Affairs Canada
    Regions: Latin America & the Caribbean, Sub-Saharan Africa
    Sectors: Financial industry and SMEs (investment funds, institutions, cooperatives)
    Impact Focus:Gender equality, market development

    2X Canada was FinDev Canada’s first blended finance facility, launched in 2021 with support from Global Affairs Canada. It targets investments that empower women and underserved communities, helping to close persistent market gaps.

    Learn more about 2x Canada
  • man working solar panels

    New Concessional Finance Facility

    Capitalization: C$700 million (plus C$20 million for technical assistance)
    Regions: Latin America & the Caribbean, Sub-Saharan Africa, Indo-Pacific
    Sectors: Agribusiness and forestry, financial industry, sustainable infrastructure
    Impact Focus:Climate and nature action, gender equality, market development

    Announced at the 2024 G7 Summit, this facility expands our blended finance toolkit to mobilize private capital at scale. It supports investments contributing to advance the SDGs and the Paris Agreement, in alignment with FinDev Canada’s sectors and impact priorities.

    Learn more
  • Dollar sign in trees

    GAIA

    GAIA is a US$1.48 billion blended finance platform co-created with MUFG Bank Ltd., the Green Climate Fund, and Climate Fund Managers. It supports climate adaptation and mitigation projects in up to 25 EMDEs, including a target 25% deployment in small island developing states and least developed countries.

    Key Features:

    • 70% of the portfolio dedicated to climate adaptation
    • Platform format to meet investor demand for scale and standardization
    • Established country and project limits
    • Integrating concessional capital to derisk the commercial tranche

    Our commitment to GAIA is the first transaction to leverage FinDev Canada’s new concessional finance facility.

     

    Learn more about GAIA