The Development Assistance Committee (“DAC”) of the Organisation for Economic Co-operation and Development (“OECD”) has adopted policy guidance on the use of blended finance for development.
The guidance includes five nonbinding principles, which are described in Annex 1 to the DAC High Level Communiqué: October 31, 2017, which was published after a DAC convention on October 30 and 31, 2017. The five principles are referred to in the Communiqué as The OECD DAC Blended Finance Principles for Unlocking Commercial Finance for the SDGs. The principles are: (1) anchor blended finance use to a development rationale; (2) design blended finance to increase the mobilization of commercial finance; (3) tailor blended finance to local context; (4) focus on effective partnering for blended finance; and (5) monitor blended finance for transparency and results. The Communiqué provides additional detail with respect to each principle, including how each principle can be implemented.
In a separate publication, the OECD previously defined blended finance as “the strategic use of development finance for the mobilization of additional finance towards sustainable development in developing countries.”
The Communiqué also provided guidance on how aid can be spent on refugees arriving in transit or host countries, including a list of aid-eligible and noneligible expenditures.
The Communiqué is available here.
