Yhdistelmärahoitus

Yhdistelmärahoitus, a Finnish term, translates to blended finance. It is an innovative approach to financing that strategically combines public and private capital to address development challenges and achieve specific goals. The core idea behind blended finance is to leverage limited public or philanthropic funds to de-risk investments and attract significantly larger amounts of private capital that would otherwise not be available for these often-perceived higher-risk sectors or regions.

This financing model typically involves a public or philanthropic entity taking on a portion of the risk or providing a concessional element, such as guarantees, first-loss capital, or grants. This enables private investors, such as commercial banks, institutional investors, or impact funds, to participate in projects that align with development objectives but might not meet their standard risk-return thresholds. The private capital then provides the bulk of the funding needed for projects in areas like renewable energy, sustainable agriculture, affordable housing, or healthcare in developing countries or specific underserved markets.

Blended finance is not a single instrument but rather a spectrum of approaches tailored to specific contexts. Its primary aim is to mobilize private investment for sustainable development by improving the risk-return profile of projects. By doing so, it seeks to accelerate progress towards global goals, such as the Sustainable Development Goals, by enabling projects that are crucial for economic growth, social progress, and environmental protection but are undersupported by traditional financing mechanisms alone.