Presentation 16 January - Guidance

1. GUIDANCE ON THE
OECD DAC BLENDED
FINANCE PRINCIPLES
A closer look at the Local Context and Results
Wednesday 16 January, 9:30-13:00
At the Private Finance for Sustainable Development
Conference (PF4SD)

2. OECD Blended Finance Principles

3. Goals: Guidance serves to support the application of the Blended Finance
Principles, providing further clarity and explanation for development finance
providers involved in their implementation.
1) Provide practical guidance on the Principles’ policy-level implementation
2) Deliver a dynamic compendium where additional references and input can
be contributed and
3) Coordinate policy makers and potentially other development actors
Timeline: The Principles Guidance will be developed throughout 2019-2020
Collaborative effort: The OECD will engage with experts and stakeholders
throughout the development of the Guidance in form of workshops,
conferences and invitations to review
Guidance on OECD Blended Finance
Principles

4. Workshops
Collaboration
ReferencesReview
Expertise
The Interactions towards the Guidance

5. Principle 1 – Development Rationale
• How to formulate strategic ambition and policy objectives for blended finance?
• How to integrate/link blended finance to overarching development and
development finance objectives (e.g. to leaving no-one behind)?
• How to define development objectives and expected results in blended finance?
Principle 2 – Mobilisation
• Policy on market testing for Blended Finance, including the extent to which
concessionality is required and warranted to mobilise commercial investment
and continuous monitoring of the adequate level of concessionality
• Matching Blended Finance approaches and objectives to different stages of
market development
• Assessing the context specificity of mobilisation
• Dynamic benchmarking of mobilisation
• Strategic exit from mature blended finance markets
Guiding Themes and Questions

6. Principle 3 – Local context
• A work programme on “Strengthening the local dimension of blended
finance” has been initiated with ECDPM and ACET.
Principle 4 – Effective Partnering
• Approaches to manage risk in blended finance, especially with regard to
concessional and grant resources, including policy approaches to (financial)
risk sharing
• Approaches to reach scale in blended finance, including coordination
approaches at policy level
Principle 5 – Transparency and Results
• A working paper on “Blended Finance Evaluation: Governance and
Methodological Challenges” will be soon published, building on a workshop
that took place in October 2018
Guiding Themes and Questions

7. • Blended Finance in LDCs
– Joint UNCDF-OECD Report
• Blended Finance in Fragile Contexts
• Blended Finance for Water and Sanitation
– Joint Sida - OECD Development Co-operation and Environment
Directorate Work Programme
• Blended Finance for Agriculture
– Joint IFAD/SAFIN-OECD Work Programme
Building the Evidence Base

8. Anchor Blended
Finance use to a
Development
Rationale
Additionality/Ratio
nale for Using
Blended Finance
SDGs
Design Blended
Finance to
mobilise
Commercial
Finance
Crowding-in and
Minimum
Concessionality
Mobilisation
Tailor Blended
Finance to Local
Context
Commercial
Sustainability
Commercial
sustainability
Focus on
Effective
Partnering for
Blended Finance
Reinforcing
Markets
Building
inclusive
markets
Monitor Blended
Finance for
Transparency and
Results
Promoting High
Standards
Transparen
cy
Underlying Reference Framework - DFI Working Group Enhanced Principles on Blended Concessional Finance for Private Sector Projects
Underlying Reference Framework – The OECD Blended Finance Principles
Aligning with
SDGs, national
priorities, and
development
cooperation
principles
Key role in
mobilizing finance,
with careful
consideration of
appropriate use
Sharing risks and
reward fairly
Structuring and
pricing of blended
finance
instruments
efficiently
Ensuring
accountability,
transparency,
debt
sustainability, and
participation
Underlying Reference Framework – Addis Ababa Action Agenda
The Context:
Core Blended Finance Frameworks

9. The Tri Hita Karana Roadmap for
Blended Finance

10. The Shared Value System
on Blended Finance
Anchor blended finance into the SDGs
Commit to using blended finance to mobilise commercial
finance
Design blended finance to move towards commercial
sustainability
Structure blended finance to build inclusive markets
Promote transparency when engaging in blended finance

11. The Principles Guidance Note – A
dynamic digital compendium
http://www.oecd.org/dac/financing-sustainable-development/blended-finance-principles/