The Blended Finance Task Force used the Spring meetings of the World Bank to launch an 8-point programme of action arising out of its recent report. Interesting to note that mobilisation of private finance via more ambitious MDB leverage targets tops the list.
The 8 initiatives from the programme of action are:
Provide a clear, ambitious proposition on MDB/DFI mobilisation targets in line with the requirements of the Paris Agreement and the SDGs.
2. Investor club:
Form a high ambition club of institutional investors and asset managers, willing to commit to sustainable infrastructure targets (e.g. 2% by 2020 and 5% by 2025).
3. Regulatory disincentives:
Support the launch of a standardised development guarantee and accelerate amendment to financial regulations (e.g. Solvency II and Basel III) which currently disincentivise investment in emerging markets and infrastructure.
4. Infrastructure data:
Drive greater access to data on infrastructure performance (including historical MDB/DFI data) as a public good to help build infrastructure as an asset class.
5. Blended finance vehicles/instruments:
Double capacity for long-term FX hedging instruments to support deepening of local capital markets; profile existing blended finance vehicles to support scale up.
6. Private intermediaries and incubators for pipeline:
Work with investment platforms, incubators and foundations to seed new blended finance intermediaries (e.g. 20 by 2020) to drive project pipeline and ensure innovation as well as scale, especially in frontier markets.
7. Investment for priority sectors:
Dramatically scale private investment for resilient cities, sustainable land-use (+ ocean plastic, energy access) by developing blended finance strategies for high-impact sectors.
8. Blended finance capacity in developing countries:
Create a network of blended finance funds and initiatives to share knowledge and build capacity to drive sustainable growth and deliver the Paris Agreement and the SDGs.