DFAT has a portfolio of blended finance mechanisms that mobilise private finance for development outcomes. Recognising the effectiveness of this approach, the Government endorsed the August 2023 Development Finance Review's recommendations to scale up Australia's blended finance portfolio to drive greater development, climate, and gender equality outcomes in our region.
What is Blended Finance?
Blended finance is the use of catalytic capital from public or philanthropic sources to increase private sector investment in sustainable development (Convergence, 2023). DFAT’s blended finance portfolio is designed to draw in private sector investment to support Australia's development goals in our region, at a larger scale than traditional grant aid.
Private capital is often reluctant to invest in emerging economies due to higher real or perceived risks. By providing concessional capital, DFAT’s blended finance portfolio makes projects or investments that have strong development impacts more attractive for private capital to co-invest in. This allows different sources of capital with different risk and financial return objectives to participate in the same investment.
The blended finance global network (Convergence) calculates that blended finance deals mobilised approximately USD $249 billion in global capital towards sustainable development between 2014 and 2025.
What is Australia investing in?
DFAT’s impact investment portfolio currently supports investments across South and Southeast Asia, and the Pacific, with the largest volume of investment in Southeast Asia.
DFAT’s investments are impact first – focussed on projects or investments that help achieve the Sustainable Development Goals. These investments prioritise climate change and women’s economic empowerment outcomes.
The Australian Government invests in a variety of sectors including but not limited to, green field and early-stage infrastructure development, energy, agriculture, water, health, small and medium enterprise finance, and projects that support financial market innovation in the region.
DFAT’s blended finance investments must demonstrate additionality. Investments are expected to catalyse additional private sector investment and development outcomes that would not have been realised without DFAT’s involvement.
The Australian Development Program's Blended Finance Portfolio
DFAT’s blended finance portfolio is comprised of mechanisms that make financial investments, as well as supporting initiatives that can deploy grants and/or provide support to develop a pipeline of investible deals. In some instances, multiple components of DFAT’s portfolio are active in the development and subsequent investment in deals.
Australian Development Investments (ADI)
Australian Development Investments (ADI) is Australia's AUD $250 million impact investment fund. ADI provides early stage and concessional investment to impact investment funds. These funds in turn give critical early-stage finance to small and medium businesses that are driving climate action and gender equality in the Indo-Pacific.
ADI uses a blended finance approach. It utilises concessional finance to de-risk transactions and attract additional private finance into deals with sustainable development outcomes, helping to bridge the climate and development finance gap . ADI also provides technical assistance alongside its investment to ensure rigorous impact measurement, promote gender equality and environmental sustainability, and enhance project bankability.
Affordable finance is essential for businesses to innovate, grow their employment, and deliver goods and services to their communities. ADI supports sustainable development in the region by expanding the finance options available to businesses through the impact investment market. By blending Official Development Assistance and private finance, ADI sends a powerful signal to the finance sector about the opportunities to generate financial returns and development impact in the region.
Since 2020, the ADI portfolio has achieved the following impact:
- Sustaining over 22,819 jobs, 40% of which are held by women
- Abating over 209,352 tons of CO2
- Serving 28 million individuals with education, health and financial services
- Mobilising over 188 million in private investment, with a mobilisation rate of 1:3 (one dollar of ADI capital leverages over three dollars in private sector investment).
For more information, visit the website: Australian Developments Investments (ADI) or read the fact sheet:
Private Infrastructure Development Group (PIDG)
The Private Infrastructure Development Group (PIDG) is a multilaterally funded infrastructure project developer and investor. PIDG operates across the entire infrastructure project lifecycle to develop sustainable and inclusive infrastructure. PIDG uses public finance to develop or assist early-stage projects to overcome any financial, technical or safeguards challenges to become investment ready, bankable projects. Australia's contributions to PIDG are helping to drive its expansion into South and Southeast Asia. The core focus of PIDG infrastructure projects in the Indo-Pacific region is increased access to stable renewable energy sources, clean drinking water and agribusiness logistics facilities.
PIDG uses a large range of financing solutions including equity, debt, guarantees, and technical assistance to enable projects to attract commercial financing. Australia's co-ownership and financing of PIDG supports three of the PIDG group companies operating in our region: InfraCo Asia, GuarantCo and the Emerging Africa and Asia Infrastructure Fund.
Australia’s investments through PIDG since 2012 have delivered 126.1MW of clean and sustainable energy capacity and helped over 178,000 people gain access to clean energy.
Australian Climate Finance Partnership (ACFP)
The Australian Climate Finance Partnership (ACFP) is Australia's up to AUD 140 million concessional financing facility designed to mobilise private sector investment in low emission, climate-resilient solutions for the Pacific and Southeast Asia. It is a 10-year initiative managed by the Asian Development Bank (ADB).
Projects are supported to reduce climate emissions, increase a partner country’s resilience and empower women. The ACFP responds to market gaps and demand by de-risking and bringing to market demonstration projects with strong impact. Financing is provided for non-sovereign climate projects at different stages of development to crowd-in private sector finance. This process maximises impact by following blended finance principles that ensure that projects receive only the minimum amount of support required to succeed.
Convergence
Convergence is the pre-eminent global network for blended finance – managing the world's most comprehensive database of blended finance transactions. This includes historical data, as well as current and prospective deals. It also hosts the largest blended finance match making platform – connecting project proponents with potential financiers both public and private.
Australia's partnership with Convergence provides DFAT and its partners (including other government departments and agencies, and private financiers) with access to Convergence's databases, technical support, and training capabilities. This partnership continues to play a significant role in supporting Australia's capacity to scale its blended finance response to climate and development needs in our region.
DFAT supports two competitive accelerator grants through Convergence - the Asia Climate Solutions grant and the Catalytic Climate Finance Facility. The accelerator programs provide support for proponents to develop and launch early-stage blended finance structures that aim to attract private capital.
Indo-Pacific NGO Blended Finance Accelerator
The Indo-Pacific NGO Blended Finance Accelerator was designed in conjunction with the NGO sector. The Indo-Pacific NGO Blended Finance Accelerator is a five-year, AUD 10 million initiative, running until 2030. Blended finance activity is growing in the Indo-Pacific region, yet funding still falls far short of what is needed to meet development goals. A major gap is the lack of investable, high-impact vehicles.
NGOs are well-placed to help fill this gap, bringing local knowledge, technical expertise, and trusted community relationships. However, their role in blended finance remains limited, with NGOs currently only sponsoring about 6% of global blended finance deals.
The Accelerator is designed to address barriers faced by NGOs by providing catalytic grants and dedicated acceleration support to help them design and launch blended finance vehicles. In doing so, it aims to build a pipeline of investable solutions enabling NGOs to take on roles not only as technical assistance providers, but also as impact managers and, where appropriate, fund managers. In doing so, the Accelerator will help mobilize private capital at scale, expand development impact, and set an example for the wider NGO community.
Solutions supported by the Accelerator must focus on gender and/or climate outcomes and accepts solutions targeting any of the Sustainable Development Goals.
Business Partnerships Platform (BPP)
The Business Partnerships Platform (BPP) supports direct partnerships between the Australian Government and inclusive and sustainable businesses to advance Australian priorities and deliver development and climate impacts. The BPP is scheduled to finish on 30 June 2026.
BPP partnerships bring together businesses, NGOs and academic institutions to target a diverse range of objectives driven by country and thematic priorities. The unique partnership model incorporates a sharing of networks, reputation, knowledge and expertise that has enabled a wide variety of partners to collaborate. These partnerships have successfully piloted experimental business models that combine impact with sustainable commercial returns.
The BPP is in its second phase, having supported an initial series of partnerships from 2015-2020. The 35 partnerships in the first phase catalysed $28.9 million in co-contributions, nearly double Australia’s investment of $14.8 million. The current phase consists of 47 partnerships supported by Australia’s investment of a further $18.7 million.
The BPP is the key mechanism under the broader Impact Private Sector Partnerships Program (IPSP). An independent evaluation of IPSP was completed in July 2025.
Engage with DFAT’s Investment Portfolio
Southeast Asia presents a lucrative opportunity for Australian investors, as acknowledged by Invested: Australia’s Southeast Asia Economic Strategy to 2040. The region is an economic powerhouse fuelled by favourable demographics, industrialisation, urbanisation and technological advances. Southeast Asia (as a bloc) is projected to become the world's fourth-largest economy by 2040, after the United States, China and India, with an expected compound annual growth rate of 4 per cent between 2022 and 2040.
Opportunities in Southeast Asia extend beyond traditional investment targets, as the impact investment market continues to strengthen and provide investment opportunities that align with improved climate and gender outcomes. Economic investment in decent jobs, inclusive products and services, and the clean energy transition are critical to the region’s future.
DFAT appreciates the pivotal role that philanthropies, impact investors and institutional investors play in scaling investment. DFAT is working collaboratively with a group of Australian family offices and foundations through the International Development Investor Group (IDIG) to attract more Australian impact investment into the region. DFAT supports regional exposure and deal origination, by sharing impact investment opportunities, due diligence, and market intelligence.
Jennifer Buckley, managing director of SWEEF Capital (the Southeast Asia Women’s Economic Empowerment Fund), said DFAT’s involvement “has been instrumental in deepening SWEEF’s relationships with institutional partners and family offices, including from Australia, Canada and Europe”.
– James Eyers, Australian Financial Review, 14 November 2022
If you are looking for impact investment opportunities in emerging markets in Southeast Asia, South Asia or the Pacific Islands, please reach out to us via email at blended.finance@dfat.gov.au.
Portfolio Performance Management
The Blended Finance Learning Program (BFLP) is a central part of DFAT's blended finance performance management framework – helping us to maintain oversight and monitoring of the blended finance portfolio, provide greater transparency and support program financing designs.
Read the report: Review of DFAT Australia’s Blended Finance Investments, 2022.
Australian Development Investments has published it’s 2025 Impact Report. The report examines how blended finance and targeted technical assistance deployed by ADI has helped businesses grow sustainably and contribute to development outcomes across the Indo-Pacific. Read the report: ADI 2025 Impact Study.
Through their BPP partnership, technology start-ups JupViec, LienVietPostBank, CARE Vietnam and the Australian Government co-invested in an initiative to create more than 5,000 jobs for urban migrant women in Vietnam.
ADI provided an anchor equity investment in 2022 into Southeast Women’s Economic Empowerment Fund (SWEEF Fund I), helping mobilise millions in co-investment from private and public investors. As an equity fund, SWEEF used this capital to invest into USM Healthcare, a company that produces medical products like coronary stent systems. USM champions gender equality and diversity, boasting 50 per cent female representation in senior management and 57 per cent female representation among its 254 full-time employees.
ADI provided first loss equity to SEACEF II in 2023 and engaged extensively to improve their fund offering, helping de-risk the investment and raise over 200 million at first and second close. SEACEF used the capital to invest in Upgrade Energy Philippines (UGEP), a solar energy company. To date, UGEP has completed 20 distributed rooftop solar projects totalling 26.3 MWp, including the biggest solar rooftop project in a single facility in the Philippines with the Merbau Solar Project.
ADI provided an anchor equity investment into Ascend Vietnam Ventures (AVV) Alpha Fund in 2022, which helped mobilise millions in private and public investment. AVV used this capital to invest in MFast, a digital platform designed to help people in rural Vietnam access financial products, including loans, insurance, and bank accounts. For example, Mr. Duy (pictured), did not have access to clean water and could not afford a water purifier. Through Mfast, Mr. Duy purchased a water purifier on an instalment plan. Three months later, his health improved significantly as the clean water enabled him to treat his kidney stones.
ADI provided first loss equity to Lendable’s Micro, Small and Medium Enterprise (MSME) Fintech Credit Fund in 2021, which was critical to attracting private institutional investors into the fund. Lendable used its capital to invest in Amartha, a company that provides loans to unbanked female micro-entrepreneurs in rural areas of Indonesia. Since inception, the company has disbursed loans to over 500,000 individual borrowers in more than 10,000 villages in Java, Sulawesi, and Sumatra.
ACFP invested in New Forests Tropical Asia Forest Fund 2 (TAFF-2) in 2022 to support sustainable forestry practices in Southeast Asia. TAFF-2 used this funding to invest in conserving and restoring Thailand’s second largest peat swamp forest, the Kuan Kreng Landscape (KKL), which covers an area of 70,715 hectares.
ACFP invested in VinFast, an electric vehicle (EV) manufacturer, in 2022 alongside Export Finance Australia. VinFast supports Vietnam’s first fully electric public transport bus fleet, electric bus manufacturing facilities, and electric vehicle charging stations. Australia’s investment furthers Vietnam’s efforts to achieve net-zero greenhouse gas emissions and expand high-tech manufacturing industries.