Exploratory study into the critical success factors for effective stakeholder engagement in blended finance projects

Abstract

It is estimated that to meet the 17 Sustainable Development Goals (SDGs) by the goal date of 2030, between $ 5-7 trillion of development financing is required annually. Blended finance has been highlighted as an innovative financing solution in which to achieve the SDGs. Blended finance, through multistakeholder partnerships, combines development finance and philanthropic funds to mobilise or leverage private capital flows to sustainable development projects, which aim to deliver both development impact and financial return. While blended finance has grown in prominence, significant concerns have been noted concerning stakeholder engagement, primarily around the lack of alignment, communication, monitoring and evaluation and the inability to engage with local stakeholders, which impedes transparency and accountability. Exploratory qualitative research, through the lens of stakeholder theory, was undertaken. Eleven semi-structured interviews were conducted with a range of local and international blended finance actors. The aim was to identify the critical factors for successful stakeholder engagement in blended finance and to determine whether stakeholder engagement would enhance the delivery of blended finance. The primary finding of this study highlighted the serious need for coordinated and inclusive stakeholder management within blended finance projects. Seven factors were identified to enhance stakeholder engagement. Stakeholder engagement was identified as being critical to the delivery of blended finance, particularly in attempts to build scalable and replicable models.