Making blended finance work for nature-based solutions

Making blended finance work for nature-based solutions

This report explores innovative financial instruments for climate action and nature conservation, with a focus on Green Climate Fund's catalytic approaches and blending mechanisms for maximum impact.

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Within Green Climate Fund’s portfolio of existing projects and pipeline of proposals for approval, the instruments mentioned do not come as standalone items but as part of larger financial systems and reforms which are tailored to specific needs and to achieve maximum impact. This paper describes the experiences of GCF and its partners in designing examples of these and other blended finance mechanisms and concludes with two messages. First, while these instruments can individually be perceived as standalone tools, they are most effective when combined and sequenced appropriately as part of a programmatic approach. Secondly, it is the needs of the beneficiaries capable of achieving an impact, whether in terms of climate or biodiversity or preferably both, which should determine the structure and composition of financial mechanisms rather than the other way around.