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IFC and the Netherlands Launch Innovative Blended Finance Investment Facility Supporting Refugees and Host Communities

IFC, in partnership with the government of the Netherlands, is launching a new $17.5 million blended finance investment facility to help de-risk and improve the financial viability of high-impact projects benefitting Forcibly Displaced Populations (FDPs) and their host communities.

By the end of 2019, UNHCR estimates that there were nearly 80 million forcibly displaced people worldwide – 85 percent of whom are hosted in developing countries with limited resources. The new blended finance facility is part of the Prospects Partnership Initiative (Prospects) that aims to transform the way governments and other stakeholders, including the private sector, respond to these growing – and protracted – forced displacement crises.

Prospects supports refugees and host communities in Egypt, Ethiopia, Iraq, Jordan, Kenya, Lebanon, Sudan, and Uganda.

The new blended finance facility will be launched just ahead of World Refugee Day to unlock and catalyze private sector financing for innovative and scalable investments that will create solutions to address economic and social challenges faced by FDPs and host communities, as well as demonstrate commercial viability of refugee-focused investments.

The facility seeks to de-risk investments, alleviate first-mover costs, and develop a pipeline of concrete investment opportunities to create new markets where involvement of the private sector is currently nascent.

“Forced displacement crises have increased in scale and complexity in recent years and have become more protracted. Action is urgently needed to support host countries through joint initiatives for burden-sharing. The Ministry of Foreign Affairs of the Netherlands spearheaded a strategic multi-year partnership to improve coordination among stakeholders and boost overall impact for forcibly displaced persons and host communities. We believe that IFC’s efforts to develop the private sector in these settings is a potential game-changer that will help open possibilities for building livelihoods with dignity and in a sustainable manner. We are excited to support Blended Finance instruments under Prospects,” says Warner ten Kate, Head of Migration and Forced Displacement Unit, Ministry of Foreign Affairs of the Netherlands.

IFC has a strong track-record in creating innovative solutions to catalyze limited public funds to help de-risk and unlock private investment using blended concessional finance.

“At IFC, we are focused on creating markets that open opportunities for all. The use of blended concessional finance has been critical to enable IFC to invest in first-of-their-kind projects that have helped kick-start entirely new markets. We are excited to support the creation of private sector solutions to improve the livelihoods of both refugees and the communities that host them,” said  John Gandolfo, IFC’s Acting Vice President for Economics & Private Sector Development.

Prospects brings together IFC, the government of the Netherlands, the ILO, UNHCR, UNICEF, and the World Bank to provide a unique combination of humanitarian assistance, longer-term development support, and private sector solutions to help refugees rebuild their lives and support themselves and their families. The new blended finance facility complements IFC’s existing agreement with the government of the Netherlands under Prospects to provide advisory services, bringing the total amount of funding provided by IFC to $47 million.

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