We spoke with Jessica Cheam about her role in advancing sustainability in Asia. She delves into the importance of blended finance in overcoming challenges to sustainable development, sharing her thoughts on why this approach is crucial for scaling sustainable projects across Asia.

Why do you think blended finance is so important for sustainable development in Asia-Pacific?

Jessica Cheam: I think blended finance is an emerging but very key instrument to help finance sustainable development projects at scale, especially in Asia-Pacific, where developing markets suffer from a lot of risks that a substantial amount of private capital would not typically touch.

Since 2015, when the SDGs (Sustainable Development Goals) and Paris Agreement were adopted, it has been an increasingly important agenda item in international forums, but as a funding mechanism itself, it has not scaled. The approach of blending public, philanthropic, and private capital to de-risk investments is crucial, but its implementation faces challenges.

Convergence, the global network for blended finance, has said that blended finance transactions totalled about US$213 billion as of 2024, but this is a small amount compared to private capital. Geopolitical tensions that have flared up recently and the wait-and-see approach by politicians and business leaders are not good for climate action or progress for the SDGs. There is a need to scale successful platforms, addressing issues like effective taxonomies, standardisation, and regulatory barriers.

Platforms like the HSC are vital to bring stakeholders together on global efforts to standardise and harmonise blended finance approaches.

Would you still say that blended finance would be the solution to the sustainable financing gap?

Jessica Cheam: I think we all need solutions, right? I mean, there is obviously a huge momentum being generated and achieved in things like green bonds all over the world, sustainability-linked loans, and a lot of debt financing that’s happening as well. So, I wouldn’t say it’s the only solution, but I would say it’s a very key solution that complements a wide range of sustainable finance mechanisms happening right now.

Read the full article about blended finance by Joanna-Luisa Giese and Jessica Cheam at Eco-Business.