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44 Technium Soc. Sci. J. 15 (2023)
Understand Blended Finance: How Different Definitions of Blended Finance Result in Different Inputs and Outputs and What to Expect

handle is hein.journals/techssj44 and id is 15 raw text is: Technium Social Sciences Journal Vol. 44, 15-27, June, 2023 ISSN: 2668-7798 SOCIAL SCIENCES JOURNAL www.techniumscience.com Understanding Blended Finance: How different definitions of blended finance result in different inputs and outputs and what to expect Farahdina Al Anshori, Roy Valiant Salomo, Retno Kusumastuti Faculty of Administrative Science, University of Indonesia, Indonesia farahdina.al.anshori@gmail.com, royvsalomo2357@ gmail.com, r.kusumastuti@ui.ac.id Abstract. Several breakthroughs were made to achieve the SDGs targets, including in the development funding subject, namely blended finance. As a new approach to development financing, this approach is not yet widely understood. One of the basic problems is that there is no internationally agreed definition of what blended finance is. The actors translate this concept according to the characteristics of their respective institutions. This translation causes a variety of blended finance, from the types of input in the blended finance operation, what output is produced from the collaboration, to what impact these institutions expect from the blended finance project they are involved. This paper examines the definitions of blended finance from four institutions commonly involved in blended finance projects, i.e. OECD, DFI, Convergence, and the European Union. By reviewing a selection of reports and their working papers, it can be concluded that the input, output, and impact expected by these actors depend on the blended finance definition they make respectively. Actors whose definition focuses on development are more toward developmental impact, while actors whose definition focuses on an economic perspective prefer focusing on projects with profit-oriented impacts. Understanding the matter will help those new players in blended finance, including policymakers, to decide which partner is more suitable to collaborate in which phase of blended finance. Keywords. blended finance, development finance, impact 1. Introduction Emerging as an alternative to funding to fulfill SDG targets, particularly in developing countries, implementing blended finance is not easy. Many people, including those in the government, are not yet aware of this type of financing. Not only it is a new perspective in financing development projects, it has no internationally agreed definition, yet it has various kinds in its operation. These varieties start from the multiple definitions that were developed by multiple organizations and depend on the emphasis of each organization itself. Understanding the variety will help decide which partner to approach at a certain time for a certain project, as there is no one-size-fits-all in terms of financing. In this paper, these varieties will be put forward and dismantled to highlight what blended finance is and how it differs from one another, particularly in their inputs, output, and impact, albeit the main goal is achieving SDGs. 15

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