From Concept to Capital: Designing Smarter and Simpler Blended Finance Funds for Africa with Aly-Khan Jamal

[00:00:00] You're listening to the Unlocking Africa Podcast.

[00:00:30] We know that when we get to the investor side, they're going to be asking us these questions. Can we justify? I think we're at the beginning of a radical and permanent shift in the development finance space. Stay tuned as we bring you inspiring people who are unlocking Africa's economic potential. You're listening to the Unlocking Africa Podcast with your host, Terser Adamu.

[00:00:54] Welcome to the Unlocking Africa Podcast, where we find inspirational people who are doing inspirational things to unlock Africa's economic potential. Today, we have Aly-Khan Jamal, who is Managing Director and Partner at Boston Consulting Group. Boston Consulting Group and the British International Investment have published a new report titled Scaling Blended Finance,

[00:01:21] which provides practical tools for blended finance fund design and also provides a toolkit to significantly scale investor appetite for blended finance funds. And that's what we will be talking about today. So welcome, welcome, welcome to the podcast, Aly-Khan. How are you? I'm doing well. Thank you. How are you? I am very, very well. And it's a pleasure to have you on the podcast.

[00:01:49] So, as always, I like to get straight into it. Where better to start than to unpack why is blended finance crucial for, I guess, unlocking private capital for Africa's development and climate goals? You know, I want to maybe even start with one even more foundational question, which is why should we care about blended finance and what is it about?

[00:02:12] So, I was at a recent conference last week in Seville called the Finance for Development Conference 4. These happen, now they're spaced every 10 years. And they're essentially the cop of development finance. They bring all the different actors together, governments, the private sector, impact investors, foundations that have an interest in development.

[00:02:37] They bring them all together to discuss how are you going to really scale up the kind of financing that we need to meet our development and climate and sustainability ambitions. And I was on a panel and I was opening with the following comments that here we find ourselves at Finance for Development. We're talking about blended finance as one of the most important things that can help address a really huge funding gap to address the SDGs.

[00:03:03] People talk about many trillions of dollars required and that we can't do it with public financing alone. We need to find ways to crowd in private finance. And I said, that is not actually the context of today in Seville. That is Finance for Development 3 at Addis 10 years ago.

[00:03:22] So we've been having this discussion about massive financing gaps and the role of blended finance and what it can play to address that for 10 years. Why have people been interested and excited about blended finance? And you talk about the context of Africa, which I think is the crucible of this, but is something that is actually even global in its relevance. What blended finance is trying to do is bring in two different kinds of capital together.

[00:03:52] Commercial capital, which is looking for risk adjusted returns that are in line with what they could seek depending on their mandates. So pension funds might be a bit more risk conservative and other asset managers could be a bit more ambitious and risk taking. But combine that with more concessional capital because it's more impact motivated is willing to take less than a market level of return.

[00:04:17] And so by bringing them together, those who are seeking impact as well as returns or just the impact alone, if they can bring commercial capital alongside, they can move more money that they have on their own. And from the commercial capital's perspective, they can find markets where they could not normally invest. So it sounds like a great idea in theory. And what the last 10 years has shown is that it's difficult to actually scale it in practice because we're 10 years later and we're still talking about the potential.

[00:04:46] But that is fundamentally why, to your question, blended finance is important in the African context. We have massive gaps in the amount of funding that we need to address and fill. So, for example, public sector within Africa doesn't have all the funding required. Neither does the development community.

[00:05:06] And as we've seen this year in the first quarter of 2025, a number of actors that have typically been massive providers of overseas development assistance have been pulling back the US, UK and others. So it's become an even more important tool to investigate. How do we unlock this and how do we unlock the potential of Africa?

[00:05:29] So during your conference in Seville, was there much conversation about how to actually assess Africa's current blended finance landscape? There was. There was a lot of discussion. There was some that were focused on particular regions, Africa, Middle East, Asia, and some which were more global in scope. But yes, there were a lot of discussions around how can we have we think about unlocking blended finance in Africa?

[00:05:56] Certainly. And when I look at the kind of discussion that we were having, there was a lot of commentary around the fact that South-Saharan Africa attracts the highest number of blended infrastructure deals, as an example. But each dollar doesn't mobilize that much yet. And also that there just isn't enough. A lot of the blended finance deals and funds are still very small. They're very fragmented. And there's a lot of issues. And so we're still far below the level that we need to see in Africa.

[00:06:24] Fantastic. So I guess you've touched on some of the challenges that we're seeing, but what would you say potentially some of the misconceptions people have about blended finance? Yeah, so I think the first thing is thinking of blended finance as something that is very unique to the development industry. In a way, blended finance is just a specific way of describing structured finance.

[00:06:50] Structured finance has been around for a very, very long time, for decades. It's just that we're taking the principles of how do we bring different kinds of capital together that have different goals into the development space. And now we bring those who have also impact related ambitions and those kinds of mandates into the capital stack.

[00:07:10] I think the second thing is that very often when people look at multilateral development banks and development finance institutions, they expect that they're the ones that will need to be the players that are going to subsidize the structure, if you like, or take that concessional position. Sometimes they can, sometimes they can, sometimes they can, and it's because each individual institution has a different mandate.

[00:07:37] They have different shareholders, but many of them, the way they work is they bring together capital from a number of different members and they then are able to pull together a very, very high credit rating, triple A credit rating. And then they can on lend to their member countries at a cost that they wouldn't normally be able to obtain on their own. But they have to maintain that rating. So they can't necessarily invest great amounts in very, very concessional ways.

[00:08:07] Not all of them can. Some of them have the ability to bring together individual pockets of donor financing that they have, but not all of them can. So very often there is the view that why are they sitting in the more senior trenches of these blended finance transactions instead of taking them on concessional ways? Well, often it's because they are trying to support the sector, build the sector, but they can't necessarily go into the most concessional tranche.

[00:08:31] And I think the third one, which is the one that we were trying to work on in this report, is that every deal has to be bespoke. Like my colleague, Greg Fisher described this really beautifully once saying that every branded finance fund is a beautiful snowflake, completely unique. And the work that we did shows that it doesn't need to be that way. And this bespoke nature of the industry right now is one of the things that's really holding it back from scale.

[00:08:57] Fantastic. So if we look at the insight in the report, I guess, maybe take it from the very beginning. What actually motivated BCG and BII to create this toolkit? Great question, because, you know, a lot of actors have been talking about the challenges of blended finance. And I talked a bit about it before, but the ones that people often come back to time and time again is that it takes a long time to create these structures.

[00:09:23] There's a lack of repeatability, but we didn't see enough work on actually trying to deal with the problem. We saw a lot of reports that provide an inventory of here's all the different funds that are out there and look at what's emerging. It's really, really interesting. But someone needed to go first and figure out how do we deal with the deal fatigue from all these ad hoc structures?

[00:09:49] So what we decided to do was to say, does it need to actually be the case that every single structure is ad hoc? Or can we actually now crunch some data and see what emerges? Are there some norms that are emerging? That was one part of it. The second was also, how do we ensure that those who are trying to invest into blended finance are not the ones who are producing the structures, but investing into them. And by the way, our report focused on funds. Sometimes you have individual transactions, but you focus on funds.

[00:10:17] How do you, as an investor, even look at these? How do you assess them? So there's some standard ways to look at any investment as an investment committee. But blended finance requires that you also look at the structuring side. Does the structuring itself make sense? And if everyone is looking at them in an entirely different way, then when you're trying to bring that product to market, well, every investor is asking you very different questions. Some of them more sophisticated than others. But you never know what you're going to get.

[00:10:42] So what we were trying to do is to really cut structuring time, make it much, much easier. I started to say, look, here's some structures that we see time and time again that will radically simplify the work of starting to put something together. And here's some standard ways they should be assessed. So if you're bringing a product to market, you know the questions you'll be asked. You should already be able to anticipate them.

[00:11:06] And if you're assessing them, you can assess it a lot faster and you know the kinds of questions that are going to empower you to make really good decisions. It's really about creating a shared language so that we can actually make the process go from years down to months. Fantastic. So I guess leading on from that, why do you believe having a shared language is so essential for blended finance in terms of design and deployment?

[00:11:32] Yeah, I want to maybe start with a different question and then get to your question. The question I want to start with is, why do these end up so complicated? True. Is it because people are just wantonly creating complicated structures? Not really. It's because what we're trying to do is bring together different motivations for putting money in and trying to make it all work. Right. Now, with commercial investors, it's relatively well understood.

[00:12:02] They're looking for different kind of points in terms of risk return. But when we start to bring in concessional investors or concessional contributors into a structure, it's not just that they write everyone a blank check. Like here's some concessional financing going into the structure. I will take on some of the initial losses, the first loss transfer. And whatever happens, fine.

[00:12:25] You know, no, they will typically say we have a mandate to focus on specific countries. Maybe it's about specific sectors. We're looking for agricultural development. We're looking for conflict and fragile states to be supported. Things like that. Now, the way the fund might start is we're looking at agriculture across Africa, the least developed countries all the way to middle income countries.

[00:12:53] And we're looking across lots of different things, both producers and also industrial agro industry and other aspects of that. Maybe it's inputs such as fertilizer and things like that. Some of which are easier to invest in, some of which are less. Now, the concessional actor may say, well, that's great, but we're not interested in all of these countries. We're not interested in all of these sub-sectors. So our money comes with strings attached. Now, imagine if you have three or four different actors coming in to be that concessional investor.

[00:13:23] Somehow you need to make that all work. You then start to end up with a very, very complicated structure where, depending on where some parts of the fund have been invested, we have different kinds of payouts to different players. And that's what's driving a lot of that complexity. I'm massively simplifying even the drivers of complexity here. But that just gives you the beginning of what is entailed in bringing together a blended finance fund together. So what does a shared language do? What are we trying to do here?

[00:13:51] If you are starting from scratch, you could think about putting together your fund in many, many, many different ways. And often people end up iterating towards certain kinds of structures that you see time and time again. And I'm happy to talk about the different kinds of structures. But I think the real point here is if you're starting from scratch and everyone is coming in with very different ambitions and there's no definition of what normal is, you could all end up in very different places.

[00:14:20] And even just the work of bringing everyone into alignment just takes an enormously long amount of time. So if we have a shared language saying, this is what we want to do here. This is generally the norm for how you would start for a fund of this kind with this kind of purpose. It gives you something to say, all right, now you're asking for us to deviate from the norm. Let's talk about that. Because we now know we have a reference point is what we call it amongst BII and BCG.

[00:14:49] If we start with a reference point, it makes that discussion a lot easier and a lot faster. And then when you have the scorecard alongside it, you'll say, OK, and as we do this, now we're going to generate more complexity. Is the complexity worth it or is there a different way of going about it? Because we know that when we get to the investor side, they're going to be asking us these questions. Can we justify it? So it helps to have a common set of things that people are solving for and a common place for everyone to start. Interesting.

[00:15:18] I guess from the study, the work that you've done, do you have any examples where this type of analysis could have potentially avoided friction or failure in past fund structures? Yeah, I don't want to mention individual funds right now, but I will talk about one in the generalities. Yes.

[00:15:40] I was speaking to a fund manager that brought together a 100 million euro agricultural SME focused fund for Africa. And it was a fairly simple structure at the very beginning. They wanted to bring in equity investment into the sector and they were looking for commercial equity investors. But it's a risky sector. It's got challenges.

[00:16:07] And so they also needed to have a more concessional, what's sometimes called subordinated equity tranche as well. And this was a prime example of having a few different actors with different goals. So they had one provider of their concessional capital that said, look, you want to cover India and Africa. So it was Africa focused, but there was about 25% allocation to India. They said, well, we're only focused on Africa, so you can only use our money for Africa.

[00:16:35] And then there were others that said, well, only part of what you're investing into is on mission for us. And the other part is not. So we will be able to support half of your deals, but not the other half. So they ended up with four years of discussions and negotiations to bring their structure to market. And they ended up with payout structure, which had four different payouts. One for India, all sectors. One for Africa, all sectors.

[00:17:03] One for India, but only as subcomponent of the most impactful sectors. And one for Africa, but only the most impactful sectors. Impactful according to the concessional providers of capital. And it created enormous amounts of complexity. So then when they were also then going to the commercial investors into this, we're like, goodness, that's a very, very complicated structure. So it's also a bit of work to get people over the line into that as well.

[00:17:29] Now, if they could have started, and they said this, if they could have started with a reference structure that said, look, this is what the normal is. And we're going to start from here. They were clear that that would have radically reduced the time. Four years is just far too long to bring a $100 million structure to market. So that's the kind of issues that we're trying to deal with in this report. I guess you've touched on this in terms of the complexity of structures.

[00:17:57] But outside of that, what would you say are some of the biggest practical barriers that inhibit blended finance to scale? Pipeline. Pipeline. Pipeline. It's great to have money, but you need to be able to deploy it. So one of the things that I'm constantly hearing is there's often a real challenge in finding a pipeline of deals that are ready for the kind of investment that they are looking to create.

[00:18:25] And some of it requires a lot of support to the kinds of actors and businesses or sectors that they want to invest into or projects. I think the other thing is around data. There's just a lot of scarce market data, which can really make it very challenging to be able to both through the fundraising side, but then also it does affect things operationally. One of the things that comes up a lot is also just foreign exchange risk.

[00:18:51] So often, you know, there are actors that are investing into really challenging markets, often affected by a lot of volatility. You know, I spent a lot of my time on part of our Lagos office in Nigeria. And it's very clear that there's been a lot of ups and downs in the Nigerian economy, but FX changes have been a real challenge for the last couple of years. And that's endemic across Africa.

[00:19:15] And I would say finally, and this is one which is quite geeky, so I'll try to not get too technical, but there's a lot of regulatory challenges as well. So even when there is some sort of downside protection in the form of guarantee that pays out in case there's less performance in your portfolio than you were looking for in individual deals or at the level of the overall portfolio,

[00:19:38] it may not be recognized as being the kind of thing that allows those investors who would want to invest in that to be able to hold less money in reserve on their balance sheet, if you like, or less reserves against that. So those kinds of issues, when you bring them all together, can make the transaction costs for bringing together blended finance really, really challenging.

[00:20:05] It's time for our brand new segment, Vertocorna, brought to you by Vertocorna, the cross-border payment platform, helping businesses scale globally with smarter financial tools. Today, we're talking about the challenge that touches almost every international business. That is managing FX risk and volatility. Joining us to break it all down is Jack Stanton, a trader at Vertocorna.

[00:20:32] Jack is going to give us an overview of the current FX landscape and share strategies businesses can use to stay ahead of currency risk. Jack, over to you. Thank you, Tersa. So from our side, and for me personally as a trader, it's been a really exciting year ever since the start really with Trump's inauguration.

[00:20:55] What we've seen is intraday, weekly, monthly, quarterly volatility in the majority of our markets that we serve at Vertocorna. Now, volatility to many represents an existential threat. However, as a trader, it represents opportunities and potential for me to assist our clients and make sure they're on the right side of any of the developments that we see.

[00:21:20] If anything, we're becoming slightly numb to the daily whipsawing we're seeing, not only in the major FX currency pairs, but also in the emerging markets as well, where we're seeing things moving up and down. And it's really hard even for us to get a handle on what's going on sometimes. So we employ our own kind of hedging strategies to managing everything. In some of the emerging markets across Africa, we're also seeing the dollar taking a bit of a pounding.

[00:21:49] You know, this is particularly due to tariffs and political instability. And overall, we're seeing the dollar is slipping from its status as the global reserve currency. Or at least that's what Trump is seemingly trying to achieve as he wants his exports to be relatively more competitive on the global markets. But we're also seeing things on the continent in Africa that are unprecedented swings, really.

[00:22:13] For example, a couple of weeks ago, oil prices tanked 7% in a single day when America struck Iran and Iran threatened to blockade the Strait of Hormuz, which is a very, very key port and export strait in the Middle East. Now, we know in Nigeria, for example, oil is their bread and butter. And you would think that a 7% drop in the oil price would then have a depreciatory effect on the Naira.

[00:22:43] But actually, what we saw in the next 72 hours after that is the Naira appreciating every day. So it's hard to take anything as a known truth at the moment. And it just makes it really difficult for treasurers to try and predict what's going on, what positions to hold, what to be keeping their eyes on at any one time. So a business can't get things perfect, but, you know, you generally want to have a plan.

[00:23:07] And Verta works with a number of different CFOs and treasurers and helps them to establish kind of a strategy for the year or an approach to work around invoice cycles for the business and lots of bespoke things that they need to do on their side. It's different really for each firm. Really, the headline here is to remain prudent. So what you need to do is keep your eyes on developments, make sure that you're aware of the currency moves on a weekly basis.

[00:23:35] And if you see a strengthening relatively, then that's a good time to sell down some slash all of the position and overall average down costs throughout half the yearly period. And as obscure as this sounds, you've got to expect the unexpected. That's really my most important piece of advice. Thank you for that, Jack. You've done a great job contextualizing all of that information. But I was wondering, for businesses who are just getting started with hedging,

[00:24:02] what are the most practical tools or techniques they can begin using? No, you can go into a lot of detail with this question, but to keep it high level. And it's a lot of what we do at Verta. So I'm involved in it from a lot of these conversations. Really, the most important thing to do, particularly at the start, is to manage any local exposures within the finance or treasury team have set limits. You know, if you aggregate a certain amount of currency and it goes past that limit,

[00:24:31] you want to have a procedure to dispose of any additional risk. You want to be plugged into sources and understanding of where the rates are at any point in time. That's really primary. If you're in a market, you need to have an understanding of what's going on. And outside of that, you need somebody within the team who is able to work with different brokers or FX providers to make sure that you're able to quickly not only lock in a trade and rid that exposure,

[00:25:00] but also be able to settle it, manage that position, work with the broker or provider as well, and see it through from A to Z to make sure that you actually are able to sell that risk effectively. Thanks again to Jack Stanton and to Verto for powering the segment of Verto Corner. We'll be back next week with another sharp take on cross-border finance. Until then, stay curious, stay global.

[00:25:30] And now back to our interview. You touched on the data, regulatory challenges, and also satisfying a pipeline, which requires some level of customization within how you manage the fund. But how can fund managers manage the trade-off between the simplicity and then also, I guess, the customization in the capital stacks? This is a great question.

[00:25:57] So this is where it will continue to be an art versus a science for now. I think what we're trying to do with our work is move from a world where we're 100% customized to one where we've got a backbone of standardization, but you will need to have some level of deviation from the reference structures that we have

[00:26:19] to be able to cater to the sector or the realities of the geographies that you are trying to focus on. Right. So I would simplify it as saying, let's go from 100% bespoke to what would it look like for in a world of 50-50 standardized versus bespoke elements or even 80-20, which would be for me the ideal.

[00:26:45] And that would keep the complexity down, the legal fees, the timeline to create the structure much more manageable. Okay. So thank you for sharing that. I guess if we go back to some of the insights or learnings from the reports, I was hoping you could break down the two main tools in terms of the typology and scorecard and how specifically are they designed to help fund managers and investors? Yeah, and this really gets to the heart of it.

[00:27:15] So we asked ourselves the question, what would it look like if we actually started to analyze a lot of funds out there and see if there's patents and see if there's patents in terms of the kinds of structures? Do they all need to be so differentiated and unique? Or actually, when we start to just look at the data, what do we see which? We also, at the same time, looked at it from first principles. If you just started with a blank sheet of paper, what are the ways in which you need to think about the kinds of structures that exist?

[00:27:44] So that was the first tool, which is the archetypes. And the way we looked at it is, first of all, there should be two, we're seeing two main types of fund arise based on what its purpose is. The first is whether or not it's focused at what we would call pioneering impact, where the focus is on either frontier markets or challenging markets, or we're looking at emerging technologies or products.

[00:28:11] And the aim here is to start to drive towards scale, but there's a lot of risk here. So we need relatively high levels of protection for those that are investing into it, but with the aim to deliver significant impact and with a runway towards, often a runway towards substantial scale. And here we would see a lot of what we were calling pioneering impact equity and pioneering impact debt.

[00:28:40] So basically, is it an equity fund? Is it a debt fund? And what we are seeing there is substantial downside protection and returns enhancement to bring in investors. And the investors in that case were often development finance institutions. And then the second family is what we call mobilization at scale. So how do we focus on large scale capital deployment?

[00:29:03] Here we're looking at sectors where we are certainly seeing almost investable opportunities, but we're just not quite there. And we need an additional bit of protection to really crowd in institutional investors. Now, there are some investors that are actually looking to take on high risk, but they want high yield. And so that was one of the archetypes under what we call mobilization, where we call that high yield mobilization.

[00:29:31] So you bring in actors that are willing to take cap return and the higher risk actors are willing to take a position into that because they want some upside. And then you see those that are more moderate risk appetite in institutional investors that will take a bit of risk, but they want also appropriate protection. And under that, you'd see funds which either focus on a specific area of geography or those which are really diversified. So we call those targeted versus diversified mobilization.

[00:30:00] So that was the first principles that we said. And honestly, it was a bit iterative, actually, in terms of this is what we think could be the structures. And then we saw what happens when we start to light up at this point in time. But at the time of the report, we looked at 65 funds and we said, how many of those could we categorize under those different archetypes? So the two under pioneering impact and the three under mobilization of scale, we found that more than 90% actually sit under those five different families.

[00:30:29] So that was the first step. And that was also the first really big step. We said, all right, we're onto something here. But they could be very, very, very different when we start to really look inside. Right. And so what we did then was we started to look at how do they actually work? What's the structure? It's often called the waterfall, which is how the money gets paid out. And so we started to look at, if you like, the most common approaches in terms of

[00:30:56] what are the different ways, how many different tranches you see in these funds and how do they work? And we found that actually we could start to point out or paint a picture of, okay, you've got a pioneering equity fund structure. Typically, they're between 50 to 200 million. They typically have a senior equity tranche and a junior equity tranche. And this is how the payouts normally work. And that was the coming together of all that kind of bottom-up analysis, but also that top-down.

[00:31:26] So actually, these are things that are anchored in facts. This is the norms that we're seeing emerge. And so if you're going to start with a new pioneering equity fund, this might be a good starting point because this is what is now becoming usual or what we think the industry is moving towards. And so then as you get into your discussions with different investors, you have a starting point. And if they want you to deviate, you have the right to be able to paint a picture

[00:31:54] or point towards, well, this is what is normal in the market. This is why we're starting here. I understand where you're coming from. And let's make sure that we can justify the difference versus that. So that was the first tool, the five archetypes. The second was the scorecard. Now, that sounds quite, I would say it sounds a bit more abstract compared to, you know, what is a normal fund? How do I put it together and all of that?

[00:32:22] But it becomes really important for those who want to invest into these funds to understand how do they assess it, right? Few institutions at the time when we were writing a report have a systematic approach to evaluating the fund structure itself, even though the structure and having a blended finance approach does introduce some unique things that you really need to think about. And so what we decided to do was say, right, you will typically have your commercial assessment of this investment.

[00:32:50] And depending on the actor, you'll also have your impact assessment of this investment. Those are all very well developed. We're not going to change that at all. But you now need to start looking at the structuring side as well as your third pillar. And here we identified three main things you need to look at. The first is, is there even a compelling rationale to justify the use of blended finance in the first place? Now, that sounds like a fairly fundamental question. Why should that even come to the investment committee?

[00:33:18] But you would be surprised about the value you get from really, really kicking the ties on what is the impact basis? Has it justified the use of concessional funding? Is there evidence that you even need concessionality or could you find a different way of structuring the fund or maybe having a more diversified approach and still get you to where you need to go without needing concessionality? The second thing is, is the structure even appropriate?

[00:33:42] So are you matching the different risk return profiles that the different investors are looking for? Have you got the right sizing? So have you got too large or too little a buffer in terms of that concessional tranche? And do the waterfalls, are the mechanics very complex or can they be well understood? And then the third area is alignment. And this is one that came out in our discussions at the market as we were writing the report

[00:34:08] as a really big one, which is you're now bringing together different kinds of actors into a structure. And these different investors and the fund manager, it's really important that there is a governance framework that ensures that they stay aligned over the life of the fund. If you don't have that well thought through at the beginning, you start to see some real tension as those interests might potentially conflict or diverge over time. So you want to see these at the outset.

[00:34:37] And when you are developing a fund, if you know that also those are the kinds of things that you're going to be tested on, it allows you to already bring that discussion into your design and also into the conversations that you have with prospective investors. It allows you to push back because you can say, well, I understand where you're coming from, but this is driving a lot of complexity and we might fail the appropriate structure test and so on.

[00:35:06] So those are the two tools and that's how we anticipate what we want. Thank you for sharing that. You've detailed the different fund structures and how they work. If we look at it from an African perspective in terms of what lessons can African fund managers draw from successful funds or case studies such as the, is it, Mirova Gigaton Fund and the Blue Orchid MSME Fund?

[00:35:32] Yeah, I think what was really interesting seeing the Mirova Fund was the level of mobilization from junior capital to senior debt. And one of the things that you often see being discussed is for the amount of concessional capital you have in your structure, what is it? It's the ratio between that and the senior amount.

[00:35:58] And the higher that is often is considered a demonstration that you have a structure that has been successful in mobilizing a lot of private capital. Now, there are different perspectives around whether that's too simplistic an approach, but I just want to just frame that that is one of the things that that fund did quite successfully. I think that, for me, looking at the individual funds out there is almost less of the story.

[00:36:24] And it's more around how can African fund managers now start to use these kinds of reference structures overall to successfully bring their structures to market? And I would say that, you know, it's time to now take the tools, test the models, and engage with your stakeholders and start to see how they can actually reduce the time it's taken for you to bring these structures to market.

[00:36:50] And then we're really keen to hear how these have landed in practice and whether they really are starting to reduce that friction and create that common language which facilitates this discussion. So I guess as we wrap up today's conversation, it's been a fantastic conversation, but one last question with regards to looking ahead.

[00:37:13] What would you say are your three boldest or biggest predictions for the future of blended finance in Africa? I think we're at the beginning of a radical and permanent shift in the development finance space where we can't assume that the norms that have been true for the last 20 plus years that characterised development finance will continue.

[00:37:43] And in that environment, I think we are now seeing, and I saw this in Seville, a different level of seriousness around bringing together private sector investors with different actors that are looking at capitalising capital, whether it be the public sector, whether it be impact investors, whether it be others with a developmental mandate, such as philanthropies and foundations.

[00:38:11] So I actually would like to see a world where blended finance is now starting to live up to its potential and we're starting to see the industry really scale. My first prediction then would be that we would see annual blended finance flows to Africa triple by 2030. The second would be to start to see African pension funds start to become significant key investors

[00:38:40] into regional blended finance funds for Africa. And then I think if we see those two things start to come together, I'd love to start to see some continent-wide securitisation platforms that allow global actors to start to channel more capital into Africa. I think we're at the point where it's starting to change.

[00:39:08] And I do think that there is some case for optimism. The work that we did is the beginning of what I sometimes say in other meetings. It's time for blended finance to become boring. And for us to now start unpacking all the individual frictions that are stopping it from getting to the scale it needs to be. And soon the term blended finance will just become less of a buzzword and more of a, oh yeah, that, right? That's what I would really want to see by 2030.

[00:39:38] As people, we often have quotes, mantras, proverbs, or affirmations that keep us going when times are challenging or when times are good. Do you have one that you can share with us today? I'm going to go with a very, very well-known one, but I think works so well in blended finance. If you want to go fast, go alone. If you want to go far, go together. Brilliant.

[00:40:04] Thank you, Ali Khan, for sharing your insights and also the deep thinking behind the reports and the toolkits put together. It's conversations like this that remind us how innovative finance can serve as a bridge between some of the ambition that we see, but also the action we like to see on the continent. So thank you for your time today. Thanks so much. It's been great discussion. Thank you.

[00:40:32] Thank you to everyone who has listened and stayed tuned to the podcast. If you've enjoyed this episode, please subscribe, share, or tell a friend about it. You can also rate, review us in Apple Podcasts, or wherever you download your podcast. Thank you and see you next week for the Unlocking Africa podcast.