G20 Bali Global Blended Finance Alliance (GBFA): A Breakthrough of Multi-Stakeholder Financing for Development
Description
Financing for development requires whole economies and societies to pull together for the greater good. ln many countries, the smart use of public resources to increase private investment is a priority for development, because an active, responsible, and inclusive private sector investment is an essential provider of groMh. ln this context, private investments through blended flnance is the strategic use for the mobilization of additional private finance. The most significant value of blended finance transactions is the ability to unlock funding for investments in areas that are not well funded. These investment segments are typically seen as 'too risky' for low risk seeking investors, or returns are not commensurate with risk for risk-seeking investors.
Nevertheless, the lack of an accessible intermediation platform for sustainability projects makes it hard for private financiers to participate in blended financing. Accordingly, enhancing and opening up channels where private investors can easily interact with concessional capital providers can facilitate a greater flow of capital toward the development sector. Thus, to maximize the potential for utilizing blended finance, at the G20 Bali 2022, the formation of the G20 Bali Global Blended Finance Alliance (GBFA) was initiated and is expected to become a breakthrough of multistakeholder financing for development. lndonesia has then taken a lead in its development through the establishment of the G20 Bali GBFA Secretariat in May 2024 which was followed by the signing of Letters of lntent from various countries in Bali.
G20 Bali GBFA is expected to implement the "G20 Principles to Scale up Blended Finance in Developing Countries, including Leasf Developed Countries and Small lsland Developing Sfafes", through its role as a platform for knowledge sharing, role of matchmaking information related to demand and supply of blended finance projects at the global level and as a platform for project preparation or providing support to the market to be able to propose bankable projects. Apart from that, there are several characteristics of G20 Bali GBFA that need to be implemented, including bringing an international perspective and placing it as a solution to problems on an international scale, following the market dynamics and interests / appetites (both in terms of schemes, project pipelines, meeting bankability standards) in order that the activities carried out can be relevant and impactful and the latest, accommodating the needs of the private sector and the perspective of the philanthropic sector.
Thus, in order to delve into the role of blended finance as a multi-stakeholder financing model, this seminar was held. The discussion will bring together relevant practitioners of blended finance from governments, global development institutions, and private sectors to share their insight, best practices, and expertise on blended finance policy and implementation and gain input for the development of G20 Bali Global Blended Finance Alliance (GBFA).
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