Invest-NL and the Ministry of Economic Affairs and Climate Policy sign blended finance covenant

Minister Adriaansens of the Ministry of Economic Affairs and Climate Policy and the Supervisory Board of Invest-NL have signed a covenant that enables Invest-NL to establish blended finance structures. This covenant provides Invest-NL with a framework for setting up funding structures in which subsidies can be used as potential revolving funding, combined with private capital. This means that new financing opportunities will arise for projects and enterprises that are important for the major social transitions towards a sustainable and innovative Netherlands.

What is blended finance?

Blended finance means that public funds are used to attract private capital for companies and projects with social value. This enables risky and innovative projects that would not otherwise have access to sufficient funding. The aim is to achieve important societal goals such as sustainability and innovation by removing financial obstacles.

In the vision document ‘Vision on Blended Finance’, Invest-NL explains the possibilities of blended finance. Senior business development manager Dolores de Rooij about this: “With this covenant, Invest-NL can offer a wider range of financing options via Invest-NL for innovative and sustainable companies and projects that are not sufficiently served by the existing public and private resources. In this way, we contribute to making a business case for projects and companies that can make a significant contribution to the transition objectives that the Netherlands stands for.”

How does it work?

With blended finance, subsidies can be used in various revolving forms, such as subordinated loans, quasi-equity or other financing instruments with a repayment obligation. This helps to reduce risks for private investors, making them more willing to invest in transition-critical and risky projects. It also ensures that funds flow back to the State.

Why is this important?

The covenant between Invest-NL and the Ministry of Economic Affairs and Climate Policy includes overarching agreements on mutual cooperation regarding advice and implementation of blended finance. With this agreement, Invest-NL can offer a broader range of financing options to companies working on sustainable and innovative projects. This is crucial for achieving the transition goals of the Netherlands, such as the shift to a sustainable economy: by cleverly combining public and private money, projects that would otherwise not receive funding can still be realised.

The vision document on blended finance provides a deeper insight into the market segments where this applies, and what characteristics blended finance can have in this context. It can be downloaded here.