Over the past decade, “blended finance” has been offered as one way to close that gap. In its simplest form, blended finance is the strategic use of catalytic capital from public or philanthropic sources to mobilise additional private investment into sustainable development.
On paper, blended finance and Asia should be a match made in heaven. The depth of Asia’s capital markets, the pipeline of near-bankable projects or those perceived as too risky, and a rapidly growing philanthropic sector offer the perfect foundation to energise investment. However, for governments planning long-term transitions and for large investors seeking predictable products, the Asian blended-finance landscape still appears to be a series of one-off experiments.
Most blended finance structures are built deal by deal, with small ticket sizes, limited diversification, and bespoke documentation and risk-sharing terms. Between 2019 and 2023, blended finance deals worth about US$16 billion were recorded in the region, against an estimated US$2 trillion in annual climate investment opportunities. The talk of blended finance has been in trillions; the walk, thus far, is in a few billions.
The problem is not a lack of intent or capital. It is the lack of vehicles that can reliably bring concessional capital, commercial capital and real projects together at scale and on repeatable terms. That is where “platforms” come in.
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From projects to platforms
A platform, in this context, is a way of organising several funds or programmes under one roof, investing in them and shaping how they work so they follow a shared strategy.
Well-designed platforms can provide both commercial and catalytic capital providers with a familiar architecture rather than a new structure for each deal, while aggregating smaller projects into larger, more diversified portfolios. They can also embed consistent standards for governance, risk, and impact, serve as a focal point for coordination, and capture learning.
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Looking at the blended finance landscape through this lens, three broad archetypes of platforms emerge: anchor allocators, active catalysts and strategic shapers.
These archetypes differ principally along two dimensions. The first is how much the platform itself shapes fund design and deployment, for example, by selecting themes and coordinating pipeline development and go-to-market efforts. The second is how far the platform engages beyond capital deployment, including policy dialogue, technical assistance, and broader market development.
Anchor allocators
Anchor allocators pool catalytic capital and deploy it mainly through external fund managers. They have clear expectations on fund types, target themes and sectors, risk appetite, and impact, while leaving pipeline building and deal execution to fund managers. Beyond capital allocation, they tend to remain light-touch, relying on fund managers and other partners to lead value chain development and ecosystem engagement.
Altérra, launched by the United Arab Emirates at COP28, illustrates the Anchor Allocator model. It deploys sovereign catalytic capital alongside established fund managers to anchor and scale climate-focused strategies.
Active catalysts
At the other end of the spectrum sit active catalysts. Active catalysts bring much of the blended-finance toolkit in-house, shaping structures, co-developing projects, and staying involved from project preparation to deal execution. At the ecosystem level, they often run technical assistance programmes and work with governments, utilities and regulators on reforms and capacity building, tackling pipeline, product and policy gaps together.
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The Private Infrastructure Development Group (PIDG) exemplifies the Active Catalyst approach. It combines project development, guarantees, long-term debt and technical assistance within a coordinated structure to mobilise private investment in challenging markets.
Strategic shapers
Strategic shapers sit between these two models. Strategic Shapers tend to work with specialist managers to co-design blended-finance structures, actively define thematic focus areas, and coordinate go-to-market efforts. They leave day-to-day origination and asset management to those specialist managers. Regarding ecosystem activities, they engage selectively, often participating in policy dialogue and financial market development efforts where these are critical to scaling their funds, but without building the full project-support machinery of an Active catalyst.
Financing Asia’s Sustainable Transition Partnership (FAST-P) is one example of this emerging approach. It is a blended-finance platform focused on supporting ‘transition’ and near-bankable green projects across Asia. FAST-P is backed by the Monetary Authority of Singapore and structured as a family of programmes focused on green infrastructure, energy transition, and industrial decarbonisation.
FAST-P aims to be genuinely catalytic, deploying sovereign first-loss capital to improve risk-return profiles rather than subsidise projects that would have proceeded anyway. The intention is that this support is time-bound to entice first-time private investment into priority sectors and regions, build a track record, and then step back as risks become easier to price. In addition, by being based in the Singaporean financial ecosystem, FAST-P hopes to act as a trusted intermediary for both concessional and commercial investors, with clear governance and a central bank sponsor that emphasises discipline and credibility.
The road ahead
Asia’s transition presents both near-term pressures and long-term investment opportunities. The region’s scale of investment need, depth of institutional capital and diversity of markets make it a rigorous proving ground for platform models. And FAST-P is one of the early initiatives applying this model in practice.
More broadly, the question is no longer whether blended finance can work in principle. It is whether platforms can build a durable architecture that enables them to scale in practice. Different contexts will require different combinations of anchor allocators, active catalysts, and strategic shapers. If blended finance is to move from a promising concept to a reliable system, platform architecture, not just more pledges, will determine whether Asia’s transition can be financed at the speed and scale required.
Munib Madni is the CEO of FAST-P Office; Varad Pande is a partner & director at the Boston Consulting Group
