Blended Finance: How Mixing Money Can Help Save the Environment
Blended finance might sound like a weird smoothie, but it’s actually a way to mix different types of money to help protect the environment. Let’s break it down into simpler terms.
Imagine you have some money and you want to help the environment. You could donate your money to a nature-based project like planting trees or restoring wetlands. But what if your money isn’t enough? That’s where blended finance comes in.
A formula to help climate projects
Blended finance is when different types of money are combined to help fund a project. For example, a project might get some money from donations, some from government grants, and some from private investors. By mixing all these different types of money, the project can get the funding it needs to be successful.
But why is blended finance so important for nature-based projects? Well, these types of projects can be expensive because they require a lot of resources like land, labor, and materials. They also take a long time to complete, which means they need a lot of money over a long period of time.
Blended finance can help these projects by providing a stable and diverse source of funding. Instead of relying on one type of funding, like donations, which can be unpredictable, nature-based projects can use blended finance to create a more sustainable financial model.
Connecting the dots and scaling the impact
Blended finance can also attract more investors to nature-based projects. When different types of money are combined, it can create more attractive investment opportunities for private investors who are looking for ways to make a profit while also doing good for the environment.
But blended finance isn’t just about mixing money – it’s also about mixing different perspectives and skills. By bringing together different types of funders, like private investors, governments, and non-profits, blended finance can create a more collaborative and innovative approach to protecting the environment.
Andrea Lasevitch, Bluebell’s CFO, emphasises that blended finance is an excellent way to minimize investor risks, as it is not only exposed to investment, and has other investors who believe in the same purpose of saving the planet and still get good returns from it!
In summary, blended finance is a way to mix different types of money to help fund nature-based projects. It can provide a stable and diverse source of funding, attract more investors, and create a more collaborative approach to protecting the environment. By using blended finance, we can work together to create a better future for ourselves and the planet.