Joan Larrea

Bridge and Blend: The Role of DFIs in Scaling Sustainable Financing

Alison Harwood, Amit Bouri, Joan Larrea, Nancy Lee, Monish Mahurkar

With the annual financing gap for Sustainable Development Goals in emerging markets estimated at $2.5 trillion, development finance institutions face critical challenges in mobilizing the necessary private capital due to institutional constraints and a historical overconcentration in middle-income regions. To address this disparity, organizations like the International Finance Corporation are shifting strategies by targeting low-income countries with specialized "stretch funds" that absorb early-stage risks and harmonizing global impact metrics to streamline complex deals. Experts emphasize that achieving the 2030 deadlines requires immediate structural reform to transform concessional finance into scalable market infrastructure rather than relying solely on bespoke transactions.