Accelerating Impact Investments for Climate and Nature in Asia 2025

3.1 The power and potential of blended finance Experts interviewed for this report highlighted the need for blended financial structures in certain projects where business models are not yet mature enough to attract support from corporate or institutional investors. Without this initial capital, these projects may struggle to survive long enough and overcome the so-called “valley of death”, in which early-stage impact ventures try to develop a minimum viable product and secure venture financing, as described in case study 9. As a result, concessionary capital – often sourced from family offices, philanthropic organizations, or public sectors – is crucial in helping to kickstart these investments. The experts’ portfolios reveal that co-invested blended finance interventions have proven to be among the most effective in building markets. They view blended finance as a paradigm shift, the result of years of development driven by impact investing pioneers. This shift has led to the creation of a broad range of risk-tolerant blended finance structures, providing investors with a diverse selection of investment options ranging from large-scale initiatives to smaller projects, with each delivering varying levels of social, environmental and financial returns. Although blended finance is still considered nascent in Asia, the market is growing, particularly in South Asia, where 69% of blended finance transactions are concentrated in India.23 The trend towards blended financial models in Asia appears to have been driven more by external investors entering the region rather than by domestic investors, although many of these investments are still relatively small in scale. In Asia, I think you are looking at smaller ticket sizes … but I think the beauty of Asia is that if you think about the economic growth, these are the future large companies – not just in terms of financial return but also from an impact perspective. Sector expert, July 2024 Many early-stage impact ventures face a critical challenge known as the “valley of death”. To help overcome this barrier, the Philanthropy Asia Alliance (PAA) and the Centre for Impact Investing and Practices (CIIP) have launched the Amplifier , with support from the Mastercard Center for Inclusive Growth. The year-long programme aims to nurture and mentor impact start-ups to become commercially viable and scale positive impact in Asia. Tackling complex societal challenges and addressing the “valley of death” requires not just funding, but a committed network of partners willing to share their knowledge, experience and resources. The Amplifier takes a “whole-of- ecosystem” approach, made possible by the contributions of a growing network of experts, mentors and resources from across industries and sectors, each bringing valuable expertise to help early-stage impact ventures succeed. By providing consulting and legal services, impact management and measurement training, industry mentorship, and expanded market access, the programme helps de-risk these ventures, making them more attractive to private investors. During the programme, Amplifier mentees are each eligible to receive catalytic capital of up to SGD 250,000 (Singaporean dollars) to scale their venture and impact. This funding is provided as a recoverable grant, which is repayable by the mentees when and if certain growth milestones are hit. This enables any recovered capital to be reused for future cohorts of Amplifier start-ups. The Amplifier model uses philanthropic capital to reduce the risk of failure for early-stage start-ups and positions them to attract private investment as they grow and demonstrate measurable impact. Ultimately, the Amplifier provides a pathway for start-ups to transition from early-stage risk capital to larger commercial investments, enhancing their financial stability and amplifying their societal impact. As more partners join this mission, the potential to drive meaningful change across Asia grows exponentially. The inaugural 2024 cohort brought together five Climate and Nature ventures – Circ, GRST, MAYANI, Mycotech Lab (MYCL) and Sampangan – from diverse geographies and business models, each offering innovative Asia-centric solutions to address the region’s pressing environmental challenges. Over the course of the year, the mentees will work closely with mentors and partners to build business partnerships, strengthen commercial capabilities and deliver more impact in the region.of blended finance transactions are concentrated in India.69% CASE STUDY 9 The Amplifier Accelerating Impact Investments for Climate and Nature in Asia 17