Objective and Additionality
The BFF aims to mitigate various financial risks associated with investments in SMEs and agribusiness as well as pioneering investments across sectors1 to unlock private sector opportunities that promote productivity improvements and innovation with strong development impact. The BFF builds on and expands IFC’s existing blended finance platforms, including the Blended Climate Finance programs, the private sector window of the Global Agriculture and Food Security Program (GAFSP), and the SME Finance facilities, and extends support into new high-impact sectors.
The BFF will enable IFC to expand its engagements in markets and sectors covered by its current blended finance platforms and enter into new ones critical to enabling high-impact transactions in PSW-eligible markets. In sectors currently covered by IFC’s blended finance program—SME, agribusiness, and climate change, the BFF will build on the current facilities, leverage existing experience and practices, and bring in additional scale and scope of engagement.
Transaction financial mechanics
Existing IFC financial products will be eligible for clients under the facility, including senior loans, subordinated loans, equity (direct and through funds), preferred equity and guarantees (e.g., first-loss in risk sharing facilities). The BFF will enable IFC to undertake additional projects by providing: i) blended financing to enable IFC to support projects which are not yet able to meet fully commercial financing terms, but which promise to be sustainable and have strong development impact; and/or ii) risk mitigation, through subordination, deferrals, provision of first loss, and structuring flexibility (e.g. longer tenors) to enable IFC to support higher risk projects. Long tenors are particularly important for green-field projects, which typically have higher risk than expansion projects, but which are more common in PSW-eligible markets. The facility could incur losses only up to the designated allocation of PSW’s resources.
Contact: Kruskaia Sierra-Escalante, Manager of Blended Finance Unit, IFC, email@example.com
Illustration: BFF will enable IFC to expand its engagements in markets and sectors covered by its blended finance platforms and enter new ones.
Builds on and expands IFC’s existing blended finance platforms, including the Blended Climate Finance programs, the private sector window of GAFSP, and the SME Finance facilities, and extends support into new high-impact sectors
 These include investments in areas such as health, education, manufacturing, affordable housing, infrastructure such as energy, telecommunications, technology, water and sanitation, and climate finance (including renewable energy generation and other climate-smart infrastructure investments).