Climate Finance
Blended finance
Structuring public or philanthropic capital alongside private investment to make a project commercially viable.
Blended structures use concessional money to absorb first losses, provide guarantees or fund early-stage costs, lowering risk enough for commercial investors to participate.
In carbon projects this often appears as grant funding for community engagement and feasibility, with private capital funding implementation and credit revenues servicing returns.
Frequently asked questions
Why is blending necessary?
Because many credible projects have long lead times and uncertain early revenue that commercial capital will not underwrite alone.
What is the main critique?
That public money can crowd out private capital or subsidise returns that did not need support.