Spring 2025

This newly released report by Convergence provides a detailed analysis of blended finance trends in 2024, with a focus on deal activity, investor behaviour, and efforts to scale the market. It reveals that blended finance deal flow in 2024 exceeded the average of the previous four years, with 123 transactions totalling $18 billion. Climate-related deals represented 49% of the total number and accounted for over 62% of total financing. The report also highlights a shift toward larger deals, the median size rose to $65 million, supported by several transactions exceeding $1 billion. Financial instruments such as concessional guarantees and risk insurance played a greater role, appearing in 34% of transactions. Development Finance Institutions (DFIs) and Multilateral Development Banks (MDBs) continued to be major players, especially in energy and infrastructure, while Sub-Saharan Africa remained the top investment destination by volume. However, Europe and Central Asia saw a notable increase in deal share, largely due to financing support for Ukraine.

The report also examines investor trends, noting that private sector investors deployed more capital than DFIs and MDBs in 2024, with commercial banks and intermediaries increasing their share of commitments. Development agencies and multi-donor funds remained the largest sources of concessional finance, while philanthropic and local investors continued to play relatively small roles. A final section assesses ongoing structural challenges to scaling blended finance, including limited local investor participation, lack of transparency, and an underdeveloped market ecosystem. It provides concrete recommendations, such as improving data sharing, attracting local capital through targeted instruments like local currency green bonds, and standardising deal structures to meet institutional investor requirements. The report offers a valuable snapshot of where the blended finance market stands and what is needed to enhance its effectiveness in addressing the SDG financing gap.

Find out more below: