Expert Q&A: How blended finance can help Canadian communities unlock capital for impact

Blended finance is a strategy that combines different types of funding, such as government grants, philanthropic money and private investment, to help communities launch projects that might otherwise struggle to secure financing. This approach is particularly valuable for initiatives that offer significant social or environmental benefits but face challenges in attracting conventional investors due to risks, early-stage nature, modest size or lack of traditional profitability.

The Blended Finance Canada initiative, a collaborative effort between the University of Victoria's Impact Investing Hub, Scale Institute and the Spring, aims to establish a national research and innovation hub. This hub will offer practical guidance to communities across Canada, assisting them in understanding and implementing blended finance solutions to surmount funding obstacles.

One of the key objectives of the initiative is to create a national knowledge hub that serves as a repository of case studies, models and tools. This resource will illustrate how other communities have successfully combined various forms of capital to transform projects from conceptual ideas into tangible realities. By sharing these practical examples, the hub will empower communities to develop their own financing strategies, serving as a valuable reference point for those navigating the complex funding landscape.

In addition to providing guidance and resources, Blended Finance Canada will focus on addressing the challenges faced by underserved rural, remote and Indigenous communities. These areas often encounter difficulties in accessing conventional funding sources. The initiative will delve into the reasons behind these barriers, exploring financial approaches that can help overcome them.

Furthermore, it will examine the distribution of risks and benefits among stakeholders, ensuring that financing solutions align with community priorities, promote equity and inclusion, and maintain economic and social benefits within the community. This work will build upon the expertise and focus of the ACET's community energy transformation efforts and the Impact Investing Hub's commitment to connecting research with practice to support climate solutions, community resilience and inclusive economic development.