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A window to blended finance in the Indo-Pacific


Thursday, 21st November 2019 at 8:31 am
Wendy Williams
$3.5 million DFAT investment hopes to spark investor capital and meet development challenges


Thursday, 21st November 2019
at 8:31 am
Wendy Williams


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A window to blended finance in the Indo-Pacific
Thursday, 21st November 2019 at 8:31 am

$3.5 million DFAT investment hopes to spark investor capital and meet development challenges

A new $3.5 million initiative has been launched to help blended finance solutions get off the ground in the Indo-Pacific and drive sustainable development in the region.

The Australian government has teamed up with Toronto-based global network Convergence to launch the Indo-Pacific Design Funding Window, which will provide grants to early stage blended finance solutions focused on sustainable and resilient infrastructure.

Blended finance refers to the use of catalytic capital from public or philanthropic sources to draw in private sector investment where it otherwise wouldn’t go.

This $3.5 million window is expected to pull in significant amounts of investor capital in critical development areas in the Indo-Pacific region.

Approximately five to eight grants will be awarded in the three-year period, in an amount up to $490,000 for each grant. 

Joan Larrea, CEO of Convergence, said they knew from working in the design funding field that small amounts of money early in a transaction’s lifecycle could mobilise huge amounts of money.

“In the program that the Canadian government asked us to manage we have so far put about US$6 million out the door and we have seen $400 million follow it,” she said.

“Our hope for this one program is to repeat or improve on that.” 

She told Pro Bono News it was also important for achieving the Sustainable Development Goals (SDGs).

“The SDGs need trillions of dollars in investment and if we get a small amount of grant capital from the likes of DFAT (Department of Foreign Affairs and Trade), to speed up the rate of investment, we are more likely to achieve the Sustainable Development Goals,” she said.

“We’re still not there, we’re operating with the wrong number of zeros right now in blended finance and investment in the SDGs, but that is the big goal.”

It comes after the State of Blended Finance 2019 report found Asia to be the new frontier of blended finance.

Larrea applauded the Australian government’s leadership as a blended finance champion and market builder in the region.

“It is just a really smart thing for DFAT to be doing, to use a really precious capital, your taxpayer money, in a way that has a profound multiplying impact. Hats off to them for trying,” she said.

Adhiti Gupta, manager of design funding at Convergence, told Pro Bono News there were two main objectives behind the partnership – capital mobilisation and market building.

“We are giving grants at that early stage and we are really looking for those blended finance structures to then go ahead and launch on the market and set a trend or an example for others,” she said.

Larrea described the latest window as a test-bed.

“We are hoping to demonstrate there are a lot of things that you can do that are very investible, if somebody gives a nudge to teams who are working on really early stage concepts,” she said.

She said it was a huge win for a young organisation like Convergence to work in partnership with DFAT. 

“We are grateful for this partnership, which will be the first step in our strategy to greatly scale our activities in the region and bring to life more effective blended finance vehicles that drive private capital to places that need it most,” she said.


Wendy Williams  |  Editor  |  @WendyAnWilliams

Wendy Williams is a journalist specialising in the not-for-profit sector and broader social economy. She has been the editor of Pro Bono News since 2018.


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