KfW official stands up for ‘blending’

Blending — a form of development financing that combines grants and loans — doesn’t eat away at funding for hardest-to-reach populations, according to Marc Engelhardt, KfW’s director for development and climate.

Some anti-poverty advocates have expressed concern that blending will undermine the goals of aid and that it will crowd out other forms of development financing.

“There is no money lost; the money is invested in a more intelligent way,” Engelhardt told Devex Editor Rolf Rosenkranz on the fringes of the 2012 European Development Days, noting that the European Commission’s purse for blending is not taken from other budget areas.

Watch the conversation between Rosenkranz and Engelhardt on how blending works and KfW’s experience using the instrument for financing projects, part of a series of conversations we video-taped with global development leaders in the center of the action at last week’s EDD.

Check out our complete coverage of European Development Days 2012.