Pakistan’s Blended Finance Masterclass Paves Pathway for Sustainable Development

The Pakistan Private Sector Energy Project recently hosted a Blended Finance Masterclass, focusing on mobilizing private capital for development objectives in Pakistan’s climate and environmental transition.

On 18 September 2024, the USAID funded Pakistan Private Sector Energy (PPSE) Project organized the Blended Finance Masterclass in collaboration with Convergence, which is a global knowledge leader in the domain. The objective of the event was to provide participants with an understanding of the importance of blended finance to mobilize private investors/financiers to finance projects in developing countries and how to structure blended deals. Held at the National Institute of Banking and Finance in Karachi, the event brought together 50 climate and finance professionals to explore how blended finance can be leveraged to attract private capital for Pakistan’s climate and environmental initiatives. Leading the sessions was Aakif Merchant, Director of Engagement & Capacity Building at Convergence, who has extensive experience working with governments, development finance institutions, and private investors to mainstream blended finance strategies. With a strong track record of collaboration with organizations such as the UN, the African Development Bank, and Global Affairs Canada, Aakif shared valuable insights and best practices for driving sustainable investment in the region.

The training covered topics such as Blended Finance Archetypes & Underlying Rationale, Blended Finance Ecosystem, and Trends and Leverage of Concessional Capital in blended finance deals. It included presentations of case studies of two such deals in Pakistan among presentations of multiple global case studies. The highlight of the training was the Blended Finance Group Activity which involved breaking participants up into small groups and assigning them to a specific stakeholder/responsibility (company, commercial investor, concessional capital provider, etc.). They were provided with certain information and constraints, which they had to take into consideration when designing a blended finance transaction.

The second session, held on 19 September 2024 in Islamabad, targeted key public sector representatives from planning and development departments. Hosted by USAID funded Pakistan Climate Financing Activity, the event focused on financing strategies for climate and environmental projects. Attendees engaged in a dynamic mix of interactive discussions, case studies, and practical exercises. These sessions offered actionable insights into harnessing blended finance to unlock sustainable investments for climate development initiatives.

Both sessions of the Blended Finance Masterclass represent a crucial advancement in Pakistan’s efforts to meet its environmental and climate goals. By equipping key stakeholders from both the public and private sectors with the knowledge and tools to effectively use blended finance, these events have laid the groundwork for stronger collaboration between the government, financial institutions, and private investors. The participants, empowered with actionable insights, are now better positioned to mobilize capital for impactful climate and environmental projects. This approach not only accelerates the transition towards a sustainable future but also strengthens Pakistan’s ability to address critical challenges such as climate resilience, environmental protection, and sustainable economic growth. These masterclasses symbolize a significant milestone in unlocking the potential of blended finance to drive long-term environmental sustainability in the country.