Séminaire QSEF – Quantitative Sustainable Economics & Finance

10h – 12h

Jeudi 26 novembre 2026

Salle 3001

Nicolás Oviedo-Dávila (Universitat Autònoma de Barcelona | Barcelona School of Economics) “Targeting Additionality: A Theory of Blended Finance”

Summary :

Blended finance combines market-rate funding with scarce concessional capital that can absorb expected losses or fund impact incentives. I study how this capital should be allocated when impact potential is private and financial and impact efforts are hidden. An impact investor required to break even cannot improve on competitive commercial finance, so loss-absorbing capital is necessary for additionality. Despite these frictions, three contract forms suffice: one raises impact in bankable projects, while the other two bring excluded projects to market, with or without inducing high impact effort. The optimal portfolio compares interventions by additionality and concessional cost, rather than ranking projects by financial viability, impact potential, or mobilization alone.

New project-level evidence from the International Finance Corporation supports the predicted sorting and financing boundaries. Calibrated simulations rationalize the predominance of contract forms that restore access to finance without an impact upgrade and show that expanding concessional capacity and assigning greater value to impact can shift the portfolio in opposite directions.