Four trends in blended finance that will drive impact in 2024 and beyond

By UBS

January 1, 2024

Philanthropy continues to evolve to take a leading role in helping to solve the biggest issues of our time. Last year we looked at five broad trends. This year, we’re taking a deep dive into one of the trends that’s gaining the most momentum: blended finance.

In the past decade, blended finance has mobilized over USD 200 billion in capital toward sustainable development in developing countries. But what exactly is it and how can investors and philanthropists drive impact through catalytic capital in 2024? We asked our UBS philanthropy experts across the world for their thoughts on the year ahead.

1. More nature, more climate finance
   A surge in climate blended finance deals is expected in the coming years, particularly in Asia
2. Measurement will be king
   Calls for accountability will grow, including increased standardization and transparency
3. More philanthropists seeking efficient leverage
   Catalytic philanthropic capital will bring in more private investments, multiplying impact both quickly and more efficiently
4. Designing for local needs
   Success relies on greater focus on local contexts, market conditions and legal and regulatory frameworks

Blended Finance uses capital from philanthropic or public sources to catalyze commercial investment towards high-impact projects that may be overlooked by the mainstream market today. This structuring approach de-risks impact investments, mobilizing increased funds to deliver sustainable development.