Programme Description

This paper lays the groundwork for the Global Blended Finance Alliance (GBFA) by exploring the specific design and objectives of this initiative to address financing gaps in developing countries' climate action plans. It provides a comparative analysis of existing global financing initiatives, identifies critical areas where these efforts fall short, and proposes the GBFA’s unique framework to meet the distinct needs of developing nations. Through detailed recommendations, the paper outlines GBFA's strategic approach to scaling blended finance for sustainable development. The academic version of the white paper has been accepted by the Asian Development Bank Institute's Call for Papers on Climate Finance and Solutions and will be presented at COP29 in a side event titled Climate Finance for Vulnerable Countries, co-hosted by ADA University and the Asian Development Bank.

Bridging the Gap:
Global Blended Finance Alliance, Climate Target, and Developing Countries

Authors:

Mari Elka Pangestu, Ardhi Rasy Wardhana, Benedicto Anggito Prayoga, Rosalia Marcha Violeta

Abstract

Climate change is one of the most pressing global issues of our time. In this regard, developing countries are faced with a remarkable challenge. On the one hand, these countries still need to undertake economic growth, which oftentimes is associated with increased carbon footprints. On the other hand, they need to adapt to and mitigate the changing climate because they are poised to bear the brunt of its impacts. Transitioning to green growth calls for a substantial amount of resources, much of which the developing countries lack access to. Most of the existing financing initiatives are not tailored to address the specific needs of developing countries. In response to that matter, the Group of 20 (G20) launched “G20 Principles: to Scale up Blended Finance in Developing Countries, including Least Developed Countries and Small Island Developing States” in the G20 Bali Summit 2022. At the summit and during its G20 presidency, the Government of Indonesia recommended that the G20 initiate the Global Blended Finance Alliance (GBFA) to bridge the financing gap to achieve Sustainable Development Goals (SDGs) in developing countries. In this paper, we lay the groundwork for initiating the GBFA. Herein, we start with a comparative analysis of the existing initiatives to solve sustainable development challenges and identify the cracks and crevices that the GBFA is designed to fill. We then formulate the GBFA’s ground ideas, functions, and organizational activities that are curated to benefit developing countries. Finally, we describe the intended impacts of the GBFA.

For more information, please email us now.