Left behind? The blended finance agenda and development cooperation and international solidarity organizations in Canada

Donor governments have promoted blended finance as an innovative way to catalyze private investment to achieve the United Nation’s 2030 Sustainable Development Goals (SDGs). The aim of blended finance is to “de-risk” investments to attract private and philanthropic capital to finance projects in developing countries. The idea still has traction despite growing evidence of problems with scalability and lack of transparency, as well as its impact on uneven development. This article examines how the turn to blended finance has impacted the internal dynamics of the international development cooperation and solidarity sector in Canada. Drawing on document analysis and interviews with Canadian development cooperation and solidarity organizations, we demonstrate that Canadian government-led blended finance initiatives have disproportionately advantaged large organizations operating in “bankable” sectors. Our findings reveal that blended finance is highly contested by civil society organizations because it reinforces a shift toward market logic in development assistance, driven in part by the (mis)perception that poverty and development are new frontiers for financial accumulation while narrowing the space for rights-based and solidarity-driven approaches to financing for development. We argue that alternative innovative models of financing motivated by public interest exist and merit renewed attention.