AuthorsandAcknowledgements

AnuAgarwal

‘24MPAgraduate,GlobalLeadership

BenivaGanther

‘24MPAgraduate,DevelopmentPractice

ChenxiLyu

‘24MPAgraduate,InternationalFinanceandEconomicPolicy

FelipeBernal

‘24MPAgraduate,GlobalLeadership-CGEPGlobalEnergyFellow

PatricioArenaHool

‘24MBAandMIADual-Degreegraduate

PinChuanShao

‘24MPAgraduate,InternationalFinanceandEconomicPolicy

YifeiShao

‘24MIAgraduate,InternationalFinanceandEconomicPolicy

YumoYe

‘24MPAgraduate,EconomicandPoliticalDevelopment

YuanXu

‘24MPAgraduate,Energy&Environment

IsabelleDelalex

FacultyResearchAdvisor,ColumbiaUniversity

WewishtoextendoursinceregratitudetoKartikeyaDesai,FounderofDesai&Associates,andhisteamforentrustingourswithconductingthisresearch.VikasArora,AVPNChiefofImpactInvesting;Xiaoning(Ning)Wu,AVPNDirector,ImpactInvesting;SharonSpiegel,UNDESAFinancingforSustainableDevelopmentOf?ce,Director;GlennHodes,UNDESASeniorAdviseronSDGinvestment;andJavierCaicedoTrujillo,UNDESAEconomicAffairsOf?cer,fortheirknowledgecapitalandcollaboration.

Weparticularlywanttothanktheprivateequityandventurecapital?rms,philanthropicorganizationsandfoundations,non-governmentalorganizations(NGOs),anddevelopment?nanceinstitutions(DFIs)leadingtheimpactinvestingspaceinAsiawhohavegenerouslycontributedtheirtimeandinsightsduringourengagementthroughinterviewstosubstantiatethisreport.TheseincludeBlueEarthCapital,BlueOrchardFinanceLtd.,GatesFoundation:StrategicInvestmentFund,HeritasCapitalManagementPte.Ltd.,ImpactVenturesbyJ&JFoundation,InsitorPartners,Kaizenvest,KKR,QuadriaCapital,responsAbilityInvestmentsAG,SavetheChildren,SavetheChildrenGlobalVentures

andUOBVentureManagementPrivateLimited.

Furthermore,wewouldliketothankourfacultyadvisor,ProfessorIsabelleDelalex,forherexpertiseincapitalmarkets,impactinvesting,andSustainableDevelopmentGoals,SDG-alignedpublicpolicy.Herresearchguidanceandreviewwereessentialinestablishingthescopeandformulatingtherecommendationsofthisreport.WewouldalsoliketothankSuzanneHollmann,Directorofthe

SDGProjectsandImpactInvestorLandscapeinAsia–RoadmapforInnovativeFinancing

ColumbiaCapstoneProgram,SalehaJ.Awal,CapstoneWorkshopProgramCoordinator,andtheirteam,whomadethisresearchpossible.

TableofContents

1.Summary 1

2.Introduction 4

Background 4

KnowledgePartners 5

ThesisStatement 6

3.Context:BlendedFinanceinSouthAsia 7

4.Methodology 10

ResearchParameters 10

ResearchProcess 10

ContextualUnderstanding 11

InductiveApproach 12

5.InvestorAnalysis 15

EnablersforImpactInvestors–MacroView 15

SelectedInvestorHighlights–MicroView 27

6.LookingAhead 31

EnablingFrameworktoScale-UpImpactInvestmentsinAsia 31

7.Bibliography 35

8.Appendix 37

AppendixA:ImpactInvestorQuestionnaire 37

AppendixB:AnalysisTools 41

AppendixC:Taxonomy 42

AppendixD:KeyInterviewees 45

1.Summary

MeetingtheUnitedNationsSustainableDevelopmentGoals(SDGs)andeffectivelyaddressingthecomplexsocialandenvironmentalchallengesofourtimerequiressubstantial?nancialresourcesandrobustcross-sectorcollaboration.Theimpactinvestingindustry’ssigni?cantgrowthinrecentyearsandanestimatedmarketsizeofover$1trillionUSDunderscoresthepotentialforprivatecapitaltobridgetheexistingfundinggaptoachievetheSDGsindevelopingeconomies.AccordingtoareportpublishedbyGIIN1,approximately24%oftheglobalimpactinvestingAUMisallocatedtobroaderAsia,includingSouth,East,SoutheastAsia,theMiddleEast,andCentralAsia.With60%oftheworld’spopulationresidinginAsiaandanannualneedof$1.5trillionUSD2in?nancingtomeetthe2030SDGobjectives,thestrategicdeploymentofimpactinvestmentsisessential.Thisapproachiscrucialforclosingthefundinggapandeffectivelyaddressingsustainabledevelopmentchallengesintheregion.

InthecontextofmeetingtheSDGs,innovative?nanceisbroadlyde?nedasthecombinationofimpactinvestingandblended?nance.Impactinvestingspeci?callytargetsinvestmentstogeneratepositive,measurablesocialandenvironmentalimpactalongsidea?nancialreturn.Blended?nancestrategicallyusespublicandphilanthropicfundsasacatalysttomobilizeprivatecapitaltowardsustainabledevelopmentinemergingmarkets.Thisapproachleveragesthe?nancialresourcesneededtobridgethesubstantialfundinggaps.Together,these?nancingmechanismscreateapowerfultoolforachievingtheSDGsbyengagingadiverserangeofinvestorstoaddressglobalchallengeseffectivelyandsustainably.

BridgingthefundinggaptoachievetheSDGsrequiresusinginnovative?nancingapproacheswithvaryinglevelsof?nancialreturnsandsocialimpact.Whilethereisalreadyawell-establishedecosystemsupportingthese?nancingmechanisms,effectivelyconnectingfundersandinvestorstoimpact-orientedprojectsandventuresremainsachallenge.Thislargelystemsfrommisalignmentbetweeninvestors'expectationsoverthe?nancialreturnsandimpactperformanceofbankableprojects,aswellasthecomplexitybehindde-riskinginvestments.ThisreportseekstoprovidesolutionstothischallengebyidentifyingthenecessaryconditionsforAsia-focusedimpactinvestorstoincreasetheircapitaldeploymenttowardsprojectsthatwillhaveasigni?cantimpactinachievingtheSDGs.

ByprovidingalandscapeofAsia-focusedimpactinvestorsandsheddinglightontheirpreferencesandconcernswheninvestinginSDG-alignedprojects,thisreportoffersvaluableinsightstoinvestorslookingtodiversifytheirportfoliostowardsimpact-alignedprojects.Italsoofferspolicymakersrecommendationsoncreatinganenablingenvironmentforimpactinvestmentstothrive.Theinvestorsinterviewedforthisreportreflectadiversespectrumofprivateequityandventurecapital?rms,foundations-philanthropicandcorporate,non-governmentalorganizations(NGOs),anddevelopment?nanceinstitutions(DFIs),eachdeployingcapitaltowardsimpactinvestmentsandcontributingtoabroadervisionofsustainabledevelopment.

1“2023GIINsight:ImpactInvestingAllocations,Activity&Performance”

/research/publication/2023-giinsight-series/

2“UNSDG|2030Agenda-FinancingandFunding.”UnitedNations,n.d.

/2030-agenda/?nancing#:~:text=The%20Way%20Forward,World%20Investment%20Report%2C%202

014

).

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ThisresearchhighlightsbothdifferencesandsimilaritiesinthepreferencesandconcernsofAsia-focusedimpactinvestors.

Largeglobalprivateequityandassetmanagement?rmsoperatinginAsiastronglyemphasizeful?llingtheir?duciarydutiesandseekimpactinvestmentreturnsonparwithtraditional,non-impactinvestments.Whilesmallerprivateequityandventurecapital?rmsalsotendtoseekcomparablereturnstoalternativeinvestments,theymorefrequentlyrequireaccesstoguaranteesorsubsidizedinterestratestoinvestinthelong-termandpursuemoreaggressivegrowthstrategiesthroughearly-stageinvestments.Regardlessofsize,impactinvestment?rmsconductextensiveduediligenceevaluatingboth?nancialreturnandimpactmetrics,aimingtomitigateanypotentialtrade-offbetweenthetwo.These?rmsfrequentlyexploreinnovative?nancingstrategiesbyformingpartnershipsandutilizingblended?nancestructures.However,manyinvestorsvoiceconcernsoverthecomplexitiesandsubstantialtimecommitmentsassociatedwiththesekindsofpartnerships.

NGOsandfoundationsdeployingphilanthropiccapitaltendtoprioritizelong-termimpactovershort-term?nancialreturns,championingprojectswithprovenoperationalfeasibilityandaclearproofofconcept.Alongtherisk-returnspectrum,NGOsandfoundationsaremission-drivenorganizationswithahigherrisktolerance,willingtoacceptlowerreturnstodeliverhigher-impactsocialandenvironmentaloutcomes,alongwithsustainablecash-flowpositiveandlong-termreturns.Theirde-riskingstrategiesinvolveacollaborativeapproachtospreadingriskacrossmultiplestakeholders,incorporatingmethodssuchasresults-based?nancingandcatalyticcapital.

DevelopmentFinanceInstitutions(DFIs)haveemergedasessentialplayersintheimpactinvestingspace,providingfundingforinvestmentprojectsthatgeneratepublicgoodsinsectorswhereotherinstitutionalinvestorsareunabletoparticipateduetotheinvestments’risksconflictingwiththeir?duciaryduties,necessitatingcreditenhancementmechanisms.Byprovidingtechnicalassistanceprogramsandinvestingincatalyticcapital,DFIsstimulateprivateresourcemobilizationandenhancethe?nancialsustainabilityofSDG-alignedprojects.DFIscanfacilitatebelowmarketratecapital,robustde-riskingcapabilities,flexible?nancingstructures,rigorousduediligence,andpost-fundingmonitoringoftheinvestmentperformancetofosterlong-termreturnsandimpact.Indeed,thereisavailableprivatecapitaltoscaleupimpactinvestmentsinAsiaandaddressthesubstantialdevelopmentchallengesoutlinedbytheSDGs.Itseffectivemobilizationhingesonimpactinvestorsaligningonthe?nancialandimpactperformanceofinvestableprojects,andwhenneededestablishingrobustde-riskingmechanisms.

Governmentsandpolicymakersarepivotalincreatingthenecessaryconditionstodriveimpactinvestmentsforward.Thisresearchoffersseveralrecommendationstoachievethisgoal.

Firstly,institutionalframeworksmustbeestablishedtoensuretheenforcementofpredictable?nancialmarketrules,creditors'rights,propertylaws,andregulationsgoverningforeigncapitalinvestments,includinglawsrelatedtocapitalrepatriationandconvertibility.

Secondly,incentivesandsupportmechanismsshouldbeimplementedtoattractearly-stageimpactinvestmentfromfundswillingtotakeonconcentratedrisks.Suchcapitaliscrucialforassistingimpactenterpriseswithscalablebusinessmodelsintransitioningtolargerinvestmentrounds.Additionally,regulationsshouldencourageinvestorboardparticipationandactiveinvolvementinportfoliocompaniestoprovidestrategicguidancealigningcommercialgrowthwithsocialimpactobjectives.

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EnhancingtheImpactofInvestmentsinOff-gridSolarSMEsthroughGender-FocusedSocialPerformanceScorecards

Thirdly,government-investorcollaborationthroughnuancedpoliciesandincentivescanleverageimpactinvestingtoaddresssocialchallengeswhileensuringmutuallybene?ciallong-termreturns.Establishinganimpactinvestmentpipelinethatincludesbusinesseswithadoubleortriplebottomline,fromsmallSMEsandup,andprovidingcapacitybuilding,technicalsupport,andincentivesforcompaniestomaintainaccurate?nancialandimpactrecords.

Lastly,promotingimpactinvestmentfairsatnationalandregionallevels,particularlyinAsia,canfacilitateconnectionsandpartnershipsamonginvestors,projectdevelopers,governments,anddevelopment?nanceinstitutionswithintheSDGinvestmentecosystem.Notably,annualUNSDGInvestmentFairs,alongsideeventsliketheAVPNnationalconferencehaveservedaspioneeringinitiativesinthisregard,drivingprogresstowardsachievingtheSDGsandbuildingamoreresilientandequitablefutureforall.

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2.Introduction

Background

Achievingthe2030AgendaforSustainableDevelopmentrequiressubstantial?nancialresources,withanestimatedannualfundingneedofapproximately$3.3to$4.5trillionUSD3.AccordingtotheUnitedNationsConferenceonTradeandDevelopment(UNCTAD),thereisanannual?nancialshortfallforrealizingtheSustainableDevelopmentGoals(SDGs)indevelopingcountriesestimatedbetween$2.5to$3trillionUSD4.Furthermore,accordingtotheForceForGoodReport2023,fundingtheSDGswillrequireaccessing40%oftheUS$450trillioninglobal?nancialwealth(grossliquidassets).Onanannualbasis,thefundingneededforSDGsrepresents20%oftheglobaleconomicoutput(GDP)of$100trillionUSD.5Thissubstantialgapunderscorestheneedtomobilizeprivatecapitalandemployavarietyofinnovative?nancingstrategiestodrivedevelopment.Suf?cientprivatecapitaltomeet2030SDGtargetsexistsanditssuccessfulmobilizationcancontributetoadramaticaccelerationofdevelopmentprogress.

To?llinthisgap,innovative?nancingstrategiesarecritical—theyarediverseandrangeintherealmsandtrade-offsof?nancialreturnsandimpact.Someoftheseemerging?nancialstrategiesincludeventurephilanthropy,whichfocusesonbuildingcapacitiesinsocialenterprises;blended?nance,whichcombinespublicandprivatefundstoleveragelargerinvestments;andSDG-alignedcorporate?nance,whichdirectscorporateinvestmentstowardsachievingtheSDGs.Whiletheecosystemsupportingthese?nancialmechanismshasgrown,effectivelyconnectingfunderswithalignedandbankableinvestmentsremainsasigni?cantchallenge.Thisdif?cultyoftenarisesfromamismatchbetweeninvestorexpectationsintermsofimpactandreturnandtheinvestment’sobjectivesandperformance;additionally,fromtailoringasuitable?nancialinstrumenttode-riskinvestmentswhilescaling-upresourcemobilization.

ToaddressthesechallengesandenhancecapitalflowstowardsSDG-orientedprojects,theUnitedNationsDepartmentofEconomicandSocialAffairs(UNDESA)playsacriticalrolethroughvariousinitiatives,suchasitsannualSDGInvestmentFair.Launchedin2018byUNDESA’sFinancingforSustainableDevelopmentOf?ce,theSDGInvestmentFairsnotonlyshowcaseinvestment-readyprojectsbutalsofostercrucialpartnershipsbetweenthepublicandprivatesectors.ThesepartnershipsmobilizeresourcesandfacilitatesubstantialprogresstowardachievingtheSDGs.

Additionally,socialinvestornetworksliketheAVPNenhancetheecosystembylinkinganetworkofimpact-focusedinvestorstoSDG-alignedinitiatives,therebyexpandingthereachandeffectivenessofsustainableinvestmentefforts.Bothorganizationsserveascriticalhubsfordialogue,transaction

3“UNSDG|2030Agenda-FinancingandFunding.”UnitedNations,n.d.

/2030-agenda/?nancing#:~:text=The%20Way%20Forward,World%20Investment%20Report%2C%202

014

).

4“DevelopingCountriesFace$2.5TrillionAnnualInvestmentGapinKeySustainableDevelopmentSectors,UNCTADReportEstimates.”UnitedNationsConferenceonTradeandDevelopment(UNCTAD),June24,2014.

/press-material/developing-countries-face-25-trillion-annual-investment-gap-key-sustainable

.5“CapitalasaForceforGood:SolvingtheSDGGap.”GreaterPaci?cCapital,October2023.

https://www.greaterpaci?/thought-leadership/capital-as-a-force-for-good-solving-the-sdg-gap#:~:text=40%25

%20of%20the%20US%24440,SDGs%20remain%20fundable%2C%20in%20principle

.

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facilitation,anddealclosing,providingessentialinsightsandaccesstoimpactinvestorsinAsia,andcontributingtotheadvancementoftheSDGs.

Inthiscontext,Desai&Associates(D&A),inpartnershipwiththeUNDESA,AVPN,andgraduatestudentsfromColumbiaSIPA,havepartneredforthisresearchprovidingalandscapeofimpactinvestinginAsia,understanding,andframingtheinsightsaroundimpactinvestortypologiesandenablingenvironmentconditionsforGovernmentstocatalyzeimpactinvestmentsintheirnations.ItalsotakesintoconsiderationthedriverscreatingimpactinvestmentopportunitiesforPrivateEquity?rms,AssetManagers,VentureCapital?rms,Philanthropicorganizations,Foundations,NGOs,andDevelopmentFinanceInstitutions/MultilateralDevelopmentBanks(DFIs/MDBs).

KnowledgePartners

WeextendourgratitudetoDesai&Associates(D&A),AVPN,andUnitedNationsDepartmentofEconomic&SocialAffairs(UNDESA)fortheirinvaluablecontributionstothisstudy.Theirinputshavebeeninstrumentalinshapingthecoreofourresearch.WearedeeplyappreciativeoftheirwillingnesstosharetheirexpertiseandprovideaccesstotheexpertswhohaveenrichedourunderstandingoftheimpactinvestmentlandscapeinAsia.Theircollaborationhasbeenessentialinensuringthequalityanddepthofourstudy.

Desai&Associates(D&A)

Desai&Associates(D&A),aspecializedinnovative?nanceadvisory?rm,istheprimaryclientforthisproject.D&Aoffersdesigningandstructuringofblendedandoutcome-based?nancingsolutionsforpublic,philanthropicandprivatesectorcapitalproviders.Italsoprovidesresearch,advocacyandmarketbuildingservicestodriveimprovedcapitalallocationforsustainabledevelopment.Ithasasolidhistoryofadvisingtop-tierfoundations,funds,non-pro?ts,socialenterprises,governmentbodies,andinternationalorganizationsoncreatingandimplementinginnovative?nancialsolutionsforsigni?cantdevelopmentissues.

AVPN

AVPNisakeyknowledgepartnerforthisprojectandservesasAsia’spremiersocialinvestmentnetwork.Itconnectssocialinvestors,philanthropists,andimpactfulorganizationstodrivesustainablesolutionsandinnovativefundingmodelsacrossAsia.AVPNutilizesitsextensivenetworkandinitiativesinknowledgesharingandcapacitybuildingtotacklesocietalchallengesinareaslikeeducation,healthcare,andenvironmentalconservation.Asaneutralplatform,itpromotescross-learningandthoughtleadership,influencingpublicpolicytosupporttheSDGsandregionaldevelopment.AVPNalsoplayedapivotalroleinlinkingtheCapstoneteamwithimpactinvestorsfromtheirnetwork.

UnitedNationsDepartmentofEconomic&SocialAffairs(UNDESA)

TheUnitedNationsDepartmentofEconomicandSocialAffairs(UNDESA)servesasaknowledgepartnerinthisproject,advancingglobalsustainabledevelopmentinlinewiththe2030Agenda.Throughresearchandpolicyadvisory,UNDESAaddresseskeyissuessuchaspoverty,inequality,andclimatechangebyfosteringinternationalcooperation.ItsFinancingforSustainableDevelopment

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SDGProjectsandImpactInvestorLandscapeinAsia–RoadmapforInnovativeFinancing

Of?ce(FSDO)playsacrucialrole,particularlythroughorganizingUNSDGInvestmentFairsthatlinkinvestorswithsustainableprojectsinemergingmarketsandfacilitatingUNparticipationinG20andotherglobaleconomicforums.UNDESAalsoprovidesinsightsintogovernmentalinitiativesandobjectivesconcerningSDGinvestments.

ThesisStatement

ThisreportaimstoformulateaframeworkthatenablesinvestmentstrategiestobemoreeffectivelyintegratedwithimpactoutcomesgearedtowardsachievingtheSustainableDevelopmentGoals(SDGs).Itseekstoidentifythekeydriversinfluencinginvestorcapitalallocationandestablishbenchmarksforef?cientimplementation,therebymaximizingthe?nancial,social,andenvironmentalimpactinrelationtotheSDGs.Moreover,thereportprovidesstrategicinsightsforinvestorslookingtodiversifytheirportfolioswithSDG-alignedinvestmentopportunitiesinAsiaandofferoptionstopolicymakersforcreatinganenvironmentconducivetoimpactinvestments.BycreatingadetailedlandscapeofAsia-focusedimpactinvestors,theprojectseekstoguidestrategicinvestmentdecisionsandpolicyformulations,ultimatelyenhancingthecapacityforSDG-alignedinvestmentsintheregion.

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3.Context:BlendedFinanceinSouthAsia6

SouthAsiaisoneofthefastestgrowingregionsintheworld.Inrecentyears,thisdiverseregionhasexperiencedsigni?canteconomicgrowth,withagrowthrateof5.8%in2023.Despitethissuccess,SouthAsiancountriescontinuetofacemajorchallenges,includinghighforeignexchangerisks,dif?cultlegalandregulatoryenvironments,andlowfamiliaritywithblended?nance.Itisasigni?cantregiontoconsiderforblended?nanceduetoitsuniquecombinationofhighdevelopmentneeds,rapideconomicgrowth,andalargepopulationthatisstillsigni?cantlyunderservedinmanysectors.

Theregion'sexperiencewithblended?nanceprovidesvaluablelessonsforapplyingsimilarstrategiesacrossotherpartsofAsia.Thesubsequentmethodologysectionwilldetailtheresearchapproachesusedtoexplorethesedynamics,ensuringacomprehensiveunderstandingofhowblended?nancecanbeeffectivelyimplementedacrossdiverseAsianmarkets.

SouthAsiacomprisesAfghanistan,Bangladesh,Bhutan,India,theMaldives,Nepal,Pakistan,andSriLanka.India’seconomyhasthelionshareintheregionforeconomyandpopulationwith70%and75%respectively.Theregion,asmanyothersintheworld,hasbeensubjecttomountingsovereigndebtyear-over-yearaveraging86%ofGDPin2022.Somecountriesintheregionhavedefaultedwhileothershavebeenassigneddebtratinginornearsovereigndebtdistress,therebylimitinggovernmentcapacityintheregionto?nancedevelopment.However,blended?nance,hasbeensteadilygrowinginSouthAsia.Thenumberofblended?nancetransactionshastripled,contributingtoafourfoldaggregate?nancingduringthepastdecade.

Source:Convergence.2023.BlendedFinanceinSouthAsia

AsdenotedinFigure2,theallocationofblended?nancegrowthandaggregate?nancinghasprimarilybene?tedIndiaasmainrecipient,bothfordealcountand?nancingamount.Yet,theaveragedealticketsizeinIndiahasnotbeenthelargest.Pakistanleadstheregionwiththehighestaveragedealsizeat$375million,largelyattributedtoitsutilizationofblended?nance.Nepalfollowswithanaveragedealsizeof$285million,andIndiaisthirdatapproximately$120millionperdeal.

InkeepingwiththesizeoftheirGDP/capita,BhutanandAfghanistanhavethelowestaverageticketsizeintheSouthAsiaregion,registering$24and$40millionrespectively.

6“DataBrief:BlendedFinanceinSouthAsia.”Convergence,March2024.

/4cgqlwde6qy0/M8CMJWRLjGKM5Gs2zEccg/afb50aed15d258d97a325f880d8c0d51/D

B_BF_in_South_Asia.pdf

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Source:Convergence.2023.BlendedFinanceinSouthAsia

AccordingtotheFinancialDevelopmentIndexbytheInternationalMonetaryFund(IMF),SouthAsialagsbehinditsG20andASEAN-8counterpartsin?nancialdevelopmentandinclusion.In2021,just11%ofadultsinSouthAsiawereutilizing?nancialinstitutionsforborrowingandsaving.BlendedcapitalinAsiahasbeenallocatedprimarilyinthreesectors:Energy,FinancialServices,andAgriculture.Thiscanbelargelyattributedtoresponsestoregionalneeds.Since2000,economicandpopulationgrowthinSouthAsiahaveincreasedenergydemandby50%,drivingupblended?nancedealsthat?nancecleanenergyinitiatives.

Source:Convergence.2023.BlendedFinanceinSouthAsia/HDD:OverallMarket–ConvergenceHistoricDealDatabase

Theimpactinvestorsanddealsponsorswhohavecatalyzeddevelopment?nancinginSouthAsiahavebeendiverseintypology.Historically,commercialinvestorshavebeentheprimarydealsponsorsintheregion.However,todayweseethatimpactinvestorsarematchingtheirstake,almostsharingequivalentparticipationsof25%and23%respectively.Theremaining50%isdistributedbetween

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DevelopmentAgencies,DFIs/MDBsandFoundations/NGOs.India-focusedinvestmentsaremainlyprovidedbyimpactinvestors,whoalmosttwofoldtheaggregated?nancingfromcommercialinvestorsforblended?nancedeals.

Blendingarchetypesandstructuresdifferandblenddependingontheprojectandthecountry,butingeneralmorethanhalfoftheaggregated?nancinghasbeenprovidedunderconcessionalcapitalconditions(58%).Concessionalguaranteesandriskinsurancehaveproventobeveryeffectivetode-riskinstitutionalandprivateinvestments,mobilizinginvestmentcapitalinblendedstructures.InSouthAsia,concessionalguarantees,andriskinsuranceaccountfor47%.,Grants,whichalsoplayafundamentalroleinreducingthecostofcapital,onlyaccountfor12%ofthetransactionsintheregion.Theregionpresentsanimportantopportunitytoincreasetheshareofgrantsandallocatecatalyticcapitalintheregionto?nancedevelopmentprojectsbythismeans.

Technicalassistance,asthisstudywillfurtherevidence,hasalsoplayedanenablingroleforblended?nanceinemergingeconomiestotakeprojectstoa“bankable”stateby1)Structuringsolidandde-risked?nancingconditionsforcapitalsponsorsand2)advisingprojectdevelopersonbestpracticesandstandardstoofferthemahealthierandmoreappealingdouble-bottomlineperformance.Technicalassistanceholds27%oftheusedblendedarchetypesintheregion.

Source:Convergence.2023.BlendedFinanceinSouthAsia

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4.Methodology

ResearchParameters

ThisstudysynthesizestrendsandfeedbackfromimpactinvestorsoperatinginSouthandSoutheastAsia.Throughthissynthesis,asetofenablingfactorsareidenti?edacrossthefollowingsectoralgroups:

●Group#1:PrivateEquity,VentureCapital,&AssetManagers

●Group#2:Foundations-PhilanthropicandCorporate&Non-governmentorganizations

●Group#3:DevelopmentFinanceInstitutions

Theenablingfactorscapturetrendsininvestmentselectionandriskmanagementidenti?edacrossthethreegroupsanddescribeasetofrecommendationstofurtheroptimizeimpact.Theresearchconcludeswitha“LookingAhead”oftheimpactinvestorlandscape,offeringrecommendation