Project Finance Consulting

Blended Finance New publication from Amundi Investment Institute. With Mohamed BEN SLIMANE, FRM, Jean-Marie DUMAS and Adnane LEKHEL, CFA, CIFE, we develop a comprehensive framework to bridge the theoretical and practical dimensions of structuring blended finance (BF) funds. Blended finance is a strategic solution employed by Development Finance Institutions (DFIs) and Multilateral Development Banks (MDBs) to mobilize private investment into high-impact, sustainable projects in high-risk markets, particularly in emerging economies. It does so by leveraging concessional capital and sophisticated tranche structuring to align the different objectives of public and private investors, balancing financial returns with sustainable impact. However, blended finance is distinct from both impact investing and public-private partnerships (PPPs). Our work focuses on the design and modeling of structured blended finance (SBF) vehicles, with particular emphasis on credit risk analysis, tranche calibration, portfolio diversification, cash flow structuring, and risk premium evaluation. We conduct an in-depth analysis of junior-senior tiered structures. We demonstrate how to reconcile diverse objectives — particularly optimizing the leverage ratio for the sponsor or DFI, managing the concessionality premium, and ensuring the safety of the senior tranche. While the economic rationale behind a junior-senior structure is relatively straightforward, this clarity diminishes when introducing a mezzanine tranche, especially given the multiplicity of stakeholders involved (sponsor, portfolio manager, structurer, and private investors). Additionally, we examine mechanisms designed to protect senior tranches, such as loss carry-forward techniques and dividend-sponsoring arrangements. We also explore the relationship between the concessionality premium, the leverage ratio, and the additional premium generated through tranche structuring. This paper is intended for professionals (DFIs, MDBs, asset managers, structurers) as well as private investors seeking a deep dive into the mechanics and the calibration of a blended finance transaction. Below are the links to the paper on SSRN, ResearchGate, and Amundi Research: https://lnkd.in/ejMNpih5 https://lnkd.in/e2_Efkz4 https://lnkd.in/eWfWjsnA #blendedfinance #esg #climatefinance #sustainability #impactinvesting #SDGs #structuring #concessionality #DFI

This is one of two go-to reports I use to explain the global climate finance landscape. I particularly like the figure on page 4 that shows the relationship between contributors and funds showing the *public* finance flows through some of the major mechanisms. Other key messages include: - The New Climate Finance Goal: At COP29, a new collective quantified goal on climate finance (NCQG) was established, succeeding the previous USD 100 billion annual target. The new goal aims for developed countries to lead in mobilizing at least USD 300 billion per year by 2035 for developing nations' climate action. The broader goal is to scale up total climate financing from all sources to at least USD 1.3 trillion annually by 2035. - Growth of Multilateral Climate Funds: The report highlights a significant planned increase in the role of multilateral climate funds. There's a call to at least triple the annual outflows from key funds like the Green Climate Fund (GCF) and the Global Environment Facility (GEF) by 2030, based on 2022 levels. - Launch of the Fund for Responding to Loss and Damage (FRLD): A major development is the establishment of the FRLD, which became an operating entity of the UNFCCC Financial Mechanism. As of January 2025, it had received USD 741 million in pledges to assist vulnerable countries in responding to the economic and non-economic impacts of climate change. - Challenges in Accessing Finance: Despite the increasing funds, the report underscores persistent challenges for developing countries in accessing climate finance. These include the high cost of capital, burdensome application processes, and co-financing requirements. The NCQG decision specifically calls for simplifying access and deploying more non-debt-inducing financial instruments. - Increasing Complexity and the Need for Coordination: The global climate finance architecture is becoming more complex, with a multitude of multilateral, bilateral, regional, and national funds and channels. ♻️ Share this informative overview with your network if you believe it can benefit others.

What Makes a Multilateral Development Bank? In our latest research report (https://lnkd.in/dH_EF3kh), we provide information on 37 multilateral development banks (MDBs). Since there are quite a few border cases, we came up with a set of 9 criteria: - establishment by several states on the basis of an international treaty; - use of loans as the primary financing instrument; - focus on long-term financing for development projects; - reliance not only on shareholder contributions, but also on borrowing in financial markets; - no objective of maximizing profit; - control by sovereign governments or institutions authorized by them. - non-investment instruments (technical assistance, analytics and databases, training programs); - trade finance does not play a dominant role in operations; - self-identification as an MDB. These criteria are important because the MDB system is constantly changing. Some institutions are created as development banks from the beginning. Others start as development funds and gradually become more bank-like as they expand their mandates, instruments, membership and access to capital markets. This evolution is likely to continue. We forecast that, over the next 10 years, 3 to 4 new MDBs may emerge, particularly to address infrastructure, energy and development financing gaps in emerging economies. #Development #Finance #MDB #Investment #IFI

The '𝗚𝗿𝗲𝗮𝘁 𝗥𝗲𝘃𝗲𝗿𝘀𝗮𝗹' is underway: China’s pivot from lender to net creditor is reshaping development finance, highlighting multilateral development banks' critical role... New 𝗢𝗡𝗘 𝗗𝗮𝘁𝗮 analysis paints a stark picture of where development finance is really going (and where it isn’t): 1️⃣📉 Net finance to developing countries is shrinking: Once inflows and debt repayments are considered together, net public finance to LMICs fell by roughly 25% between 2010–2014 and 2020–2024. Headline aid numbers mask how little remains for real investment. However, if we exclude upper-middle-income countries, net flows increased by +14% between the periods. 2️⃣🇨🇳 China has flipped from financer to 'extractor'. Repayments to China now exceed new lending, making it a net outflow for many developing economies, particularly in Africa. The shift marks a structural break, not a cyclical slowdown. 3️⃣🏦 MDBs are carrying the system. Multilateral development banks have increased net financing by 124%, now accounting for more than half of all net public development finance, as bilateral and private flows retreat. Why this matters: 📌 Debt service is crowding out development spending 📌 Gross ODA figures alone can be increasingly misleading 📌 Policy choices based on partial data risk being dangerously wrong 🖇️ Link to full report below 👇 The report coincides with the announcement of the launch of the 𝗗𝗲𝘃𝗲𝗹𝗼𝗽𝗺𝗲𝗻𝘁 𝗙𝗶𝗻𝗮𝗻𝗰𝗲 𝗢𝗯𝘀𝗲𝗿𝘃𝗮𝘁𝗼𝗿𝘆 by ONE Data and The Rockefeller Foundation, with $4m funding from Google.org and RF. 𝗢𝗡𝗘 𝗗𝗮𝘁𝗮 is a data initiative backed by The ONE Campaign and The Rockefeller Foundation, focused on making development finance transparent, comparable, and usable.

A new global arms race is underway — and it’s getting costly. The demand for weapons in the Russia-Ukraine war is claiming a lot of the world’s capacity, even as the U.S. pulls back. The commitment by many Western countries, including Canada, to big increases in their defence budgets will only add to that demand. By one estimate, there could soon be another $1.9 trillion budgeted in the coming years for defence spending — and that’s just in the West. Where will all that money come from? And who will produce all the equipment, technology and weapons it will go shopping for? To bridge the gap, a lot of companies and public sector enterprises will need a new generation of capital to scale their innovation labs and production lines, and tackle new markets. It’s about much more than procurement and order books. The new defence and security sector will need new forms of capital, from venture to long-term equity. I’m in London and met today with a group of bankers, defence leaders and government officials to discuss a novel approach called the Defence, Security and Resilience Bank, a British-inspired idea that would pool capital from member countries. Those countries could then each borrow from the bank to finance expanded defence budgets, especially if their own borrowing costs in the open market are going up. Another novelty: This new form of multilateral bank could support guarantees for banks to lend to defence and security companies, making them much less risky. Here’s one of the challenges: The defence sector is made up of large multinational companies, which have a straight line to capital, and a vast array of smaller suppliers that don’t. Those small and medium sized enterprises, including a lot of Canadians, could soon see a massive increase in orders that they may not be ready for. That’s why many will need new equity investors or venture backers, depending on their size, to quickly expand. It’s not just defence firms. Lots of dual use security companies will be in the mix, too. Think of cyber, sonar and space, even health. An added challenge: many financial institutions, including government agencies, have shied away from defence companies, especially if they make lethal weapons. A new playbook may be needed, including definitions for security and defence. Eighty years ago this fall, the United Nations was created to help protect the world against major wars, largely through the rule of law, global standards and investments ion peacekeeping and human development. Now the focus is on deterrence. Starting in the 1940s, the UN approach used multilateral finance — think of the World Bank — to keep the world together. Can a similar approach to defence and security work? If it does, it may need to serve its own “dual purpose” — buzzwords of the season — to both deter conflict through strength while promoting peace through prosperity. RBC Thought Leadership

🌍 A milestone for multilateral climate action. The 2025 Joint Results Report from the Green Climate Fund, Global Environment Facility , Adaptation Fund and Climate Investment Funds, highlights a massive collective delivery of climate finance to date — and the impact is unmistakable. 💰 US$34 billion in approved climate finance 🤝 Mobilising US$176.2 billion in co-financing 🌐 Supporting 2,287 projects in 145 countries From resilient agriculture to low-emission technologies, coastal protection, and community-driven adaptation, these investments are generating real, measurable impact on the ground. Across the funds, results are tracked through five shared indicators, strengthening transparency and demonstrating how scaled, coordinated climate finance accelerates transformation. This collective effort shows what multilateralism can achieve when institutions work together — and how critical it is to continue expanding support for the countries and communities on the frontlines of climate change. #ClimateFinance #GCF #Adaptation #Mitigation #ClimateAction #Multilateralism #Resilience #SustainableDevelopment 🌱 Find the full report here: https://lnkd.in/gikpArjs

Working with multilaterals (World Bank, Green Climate Fund, Adaptation Fund etc) can seem intimidating and also near impossible. But it doesn't have to be that way. Often the way "in" is simply understanding how the funds flow, and where best to insert your company's work. Multilaterals fund governments for the most part, and not directly to implementers. BUT - there are times when it makes sense for multilaterals to co-fund alongside companies (with government sanctioned or apportioned funds). Also, certain programs within these agencies issue RFPs. Here are a few steps to take to follow and take advantage of multilateral funding opportunities: (1) Track upcoming and approved projects by sector as well as opportunities issued by implementing agencies (government ministries or NGOs that help support these programs) 📌 Where to look: Identify projects that fit your priorities and reach out to project implementers to explore partnership. (2) Follow government tender Portals for WB-Funded Projects- Recipient country governments release tenders and RFPs on their own national procurement portals — not the World Bank site. 📌 Where to look: Ministries of Transport, Energy, Health, etc., in the relevant country Local tender bulletins and gazettes (3) Partner with local orgs - Multilateral projects often favor or require local partnerships. 📌 Where to look: local orgs' newsletters, social media (LinkedIn) or via word of mouth. (4) Look for private sector windows or announcements (for blended finance or guarantees) 📌 Where to look: Look for PPP announcements or DFI-related scopes that involve multilateral agencies. What questions do you have on working with the World Bank or other multilaterals?

Raising capital is one challenge. Investing billions for impact across fragmented mandates, balance sheets, and governance systems is harder. Last week, at the Board of International Finance Facility for Education (IFFEd), we reviewed what it actually takes to invest capital at that scale across Asia and Africa. At first glance, this could look like a familiar capital allocation exercise. But it is not. This is not philanthropic grantmaking, official development aid, multilateral financing as we know it, or traditional public funding. It is all of them, combined into a single facility. But these forms of capital do not naturally converge. Each actor brings its own mandate, risk tolerance, and governance framework. What works within one balance sheet does not automatically translate to another. Alignment is not a given. It has to be engineered. This is exactly where the opportunity sits. It is precisely because these forms of capital and mandates are different that something new becomes possible: The ability to drive evidence-based education reforms at scale, with capital behind them and accountability around them. Public systems anchor policy and long-term implementation. Multilateral development banks deploy capital at scale. Philanthropy takes risk, supports innovation, and maintains a strong focus on evidence and outcomes. Sovereign donors, even as ODA comes under pressure, can maintain momentum by providing guarantees that unlock significantly larger flows of capital. What we are testing at IFFEd is not just new instruments, but a new level of coordination across institutions that were never designed to operate together. Reaching that ambition will require more partners at the table, including sovereigns and philanthropies willing to deploy capital in an aligned way. And the implication extends across the system, where there is real momentum. IFFEd, the Global Partnership for Education and Education Cannot Wait (ECW) are aiming to mobilize close to USD 10 billion for education by 2030. We are getting better at raising capital. We are not yet as good at aligning it. If these efforts remain parallel, we will continue to leave impact on the table. The future of development finance will be defined by our ability to align different forms of capital at scale, across institutions and geographies. Now is the moment to make that alignment real.

As trust in multilateralism is tested, geopolitical competition intensifies, and aid budgets tighten, development finance is being reshaped in real time. Success today depends less on traditional donor-recipient dynamics and more on credible partnerships and shared stakes. #ADF17 offers a compelling example. This analysis from #DonorTracker, an initiative by @SEEKDevelopment, examines why the African Development Fund replenishment succeeded even as many multilateral fundraising efforts faced significant headwinds. The Fund mobilized a historic $11 billion from 44 partners — a 23% increase over the previous cycle — at a time when global aid budgets are contracting and political priorities are shifting across donor countries. What distinguishes #ADF17 is not the scale of resources mobilized, but what lies behind it. African countries stepped forward like never before, as co-investors; traditional donor contributions decreased; and ADF innovations appeared for the first time. Twenty-four African nations pledged to the Fund -including twenty that also receive ADF financing- from Algeria to Zimbabwe, and Madagascar in between. This signals a structural shift — from dependency toward shared responsibility and co-creation of development outcomes. Partnership is no longer rhetorical; it is financial, political, and strategic. ADF-17 is also anchored in President Sidi Ould Tah’s Four Cardinal Points : • mobilizing capital at scale; • reforming financial systems to strengthen Africa’s global agency; • harnessing the continent’s demographic dividend; and • building resilient infrastructure with accelerated value addition. Together, these priorities position the Fund not only as a vehicle for aid, but as a platform for investment, resilience, and long-term economic transformation. As the analysis notes, ADF-17 reflects a broader evolution in multilateral finance — one where beneficiary countries, regional institutions, and non-traditional partners play increasingly central roles. The announcement of co-financing alongside the ADF by the #OPECFundfordevelopment and #BADEA, longstanding partners, puts the accent on supporting our investments in African countries. 🔗 Read the full analysis: https://lnkd.in/ex8eQ67A #ADF17 #ADFDelivers #AfricanOwnership #DevelopmentFinance #Partnerships #Multilateralism #Africa

✋ The global development finance system is entering its biggest stress test in decades — and the consequences could reshape multilateralism itself. 👉 The new report, “Multilateral Development Finance 2026” by the Organisation for Economic Co-operation and Development highlights a deepening crisis in the multilateral development system, driven by shrinking aid budgets, geopolitical fragmentation, and declining trust in collective action. ✋ I see this as more than a funding slowdown. It reflects a structural shift from an era of expansionary multilateralism toward a more fragmented and strategically contested global order. The real risk is not only lower finance volumes, but the weakening of institutions that support humanitarian relief, concessional finance, and long-term development in the world’s most vulnerable economies. 👉 Key takeaways: 🔹 DAC contributions to multilateral development organisations fell by over 15% in 2024, with projections suggesting a 23–30% decline by 2027. 🔹 Eleven major OECD DAC donors accounting for nearly two-thirds of multilateral funding have announced aid cuts. 🔹 Despite funding stress, multilateral outflows reached a record USD 296 billion in 2024, masking deeper structural pressures. 🔹 Humanitarian agencies such as the World Food Programme are already facing severe contractions in operations and beneficiary coverage. 🔹 Concessional finance for low-income and fragile countries is increasingly at risk as donors prioritise leverage and financial efficiency. 🔹 The report warns that uncoordinated cuts to central institutions could trigger system-wide delivery failures across humanitarian and development programmes. #MultilateralFinance #OECD #GlobalDevelopment #MDBs #ClimateFinance #HumanitarianAid #ODA #SustainableDevelopment #Geopolitics