OECD Blended Finance Guidance for Clean Energy
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The OECD blended finance guidance focuses on designing blended finance to increase the mobilization of commercial finance. It highlights sub-sector specific considerations for blended finance use in clean energy projects, specifically exploring off-grid clean energy systems, energy efficiency, utility-scale renewables, and several other clean energy and integration technologies, including battery storage, green hydrogen, and carbon capture, utilization, and storage. It also draws attention to the common risks, climate finance may help overcome for these clean energy infrastructures.
Blended finance is an important tool that can help mobilise commercial investment towards clean energy, whilst preserving scarce public resources for wider climate and development objectives. A systematic approach to the deployment of blended finance – that tailors instruments to the nature of underlying barriers to commercial investment, minimises concessionality, has a clear exit strategy, and is co-ordinated within a wider ecosystem of support and enabling measures – can help maximise its development impact and stimulate private sector development. Blended finance helps de-risk investments and supports effective public-private cooperation on the ground. The exploration in the guide of sector-specific considerations for deploying clean energy in greater detail can inform development practitioners to make better decisions on and ultimately maximize the development impact of blended finance interventions.