Seminar
Blended Finance
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SeriesErasmus Finance Seminars
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SpeakersCaroline Flammer (Columbia University, United States)
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FieldFinance, Accounting and Finance
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LocationErasmus University Rotterdam, Campus Woudestein, Langeveld 1.08
Rotterdam -
Date and time
May 12, 2026
11:45 - 13:00
Abstract
Blended finance—the use of public and philanthropic funding to crowd in private capital—is a potential way to finance a more sustainable world. While blended finance holds the promise of being catalytic in mobilizing vast amounts of private capital, little is known about this practice. In this paper, we provide a conceptual framework that formalizes the decision-making of development finance institutions (DFIs) that engage in blended finance. We then provide empirical evidence on blended finance using deal-level data from a major DFI. The key variable we study is the level of concessionality, which captures the subsidy from the blended co-investment. Consistent with our conceptual framework, we find that DFIs provide higher concessionality for projects with higher anticipated sustainability impact. Moreover, the concessionality is higher for projects in countries with higher political risk and information asymmetries. In such cases, the blending is more likely to also include risk management provisions.