Published 2017
Blended finance in fragile contexts: Opportunities and challenges
By Cordelia Lonsdale and Sarah Dalrymple

Cordelia Lonsdale and Sarah Dalrymple both work as Senior Policy and Engagement Advisors for Development Initiatives, an independent international development organisation that focuses on the role of data in driving poverty eradication and sustainable development. Cordelia Lonsdale leads DI's policy and engagement work on financing for development and development effectiveness.

Sarah Dalrymple works on policy analysis and engagement on both humanitarian assistance and conflict, peace and security.

Financing the 2030 Agenda for Sustainable Development is a substantial undertaking − the annual funding gap for developing countries is currently estimated at trillions. Blended finance (using development cooperation to de-risk, crowd-in or ‘leverage’ private investments in these countries) is attracting attention for its potential to help fill this funding gap, including within the Addis Ababa Action Agenda.¹ With financing especially challenging in situations of conflict, fragility and crisis (‘fragile contexts’ for the purpose of this paper)², the role that blended finance can play in such contexts is a particular focus of emerging international discussions. This paper explores the role of blended finance in fragile contexts and identifies considerations and recommendations for the United Nations and wider development actors. We recognise that fragile contexts are diverse (from prevention and risk, to post-conflict and transition, and active crises) and that considering different types of evidence will be critical.