Blended finance for WASH

Research Purpose

If we are serious in our efforts to meet the sustainable development goal 6 of access to safe water supply, sanitation and hygiene (WASH) for everyone, especially in the face of climate change, there will need to be significantly more investments to overcome the substantial gap between the public funds that are available, and the finance needed to tackle the challenges communities are facing due to a changing climate.

Blended finance is a partnership of various financial “actors”, working together to combine different sources of capital with innovative financing structures. It provides an opportunity for the public sector to leverage their own funds to access or to secure private funds. They can do this by providing publicly-sourced capital that has a high tolerance to financial risk (e.g. grant, subsidy, guarantee, or first-loss capital) so that private (or other) investors’ financial returns are more “protected”, and thus the private sector is more willing to participate.

The IWC has been working in partnership with Lean Finance to describe the potential positive impacts and challenges of blended finance, and to support appropriate approaches to blended financing for WASH.