Blended Finance in Action: Road to Doha SDG Finance in Least Developed Countries

The event is co-hosted by UNCDF and the Joint SDG Fund with the aim to generate more support for the UN’s catalytic role in financing the SDGs. It is expected to be the first in a series of discussions between UN partners, member states and other stakeholders, to further examine, define and build support for specific initiatives and investment vehicles that can drive increased UN action in helping LDCs and SIDS finance their development.

To showcase blended finance in action, the focus of this event will be on the BUILD Malawi Fund, a structured blended finance vehicle that aims to mobilize US$35 million for investing into 50 businesses in Malawi in partnership with Bamboo Capital Partners (Fund manager to BUILD Malawi Fund), and with UNCDF serving as the investment advisor, the Fund will work towards mobilizing additional financial resources for Malawi, helping to reduce poverty and hunger by increasing investments in sustainable agriculture and other manufacturing and supply-chains. The BUILD Malawi Fund will invest patient capital in promising businesses to increase their production capacity, serve a broader customer base, as well as become more efficient and effective. The Fund has vast impact potential and aims to support 37,500 households, integrate 75,000 small-scale producers into investee supply chains, increase SME income by 30%, and create 6,000 sustainable jobs, including 3,000 jobs (30% minimum for women and youth).

Build Malawi Fund will contribute to reducing poverty, hunger, and inequality by creating jobs and supporting small businesses especially in the country’s severely undercapitalized agricultural sector. The project will establish and operationalize a structured blended finance vehicle in Malawi, the first of its kind in the country. The Joint SDG Fund is contributing with half of the first-loss layer that offers traditional donors and impact-first investors with an opportunity to use their contribution (US$ 6.8M) beyond grant making to support their development objectives, while the balance will be a mezzanine layer that offers much greater leverage potential than through grant funding alone.