Blended Finance for the Energy Transition (BFET)

The Blended Finance for the Energy Transition (BFET) initiative leverages a unique partnership between USAID; the Department of State, in collaboration with the U.S. Special Presidential Envoy for Climate (SPEC); and the Danish Ministry of Foreign Affairs and Investment Fund for Developing Countries to mobilize $1 billion to accelerate emerging markets’ efforts to achieve a just and resilient energy transition and limit global temperature rise to 1.5°C.​ While private capital is increasingly directed at the energy transition in emerging markets, it is not yet at the speed and scale needed to address the global climate crisis. In response, BFET seeks to unlock new and deep pockets of institutional capital that have typically been too risk averse to invest in the energy transition in high-emitting emerging economies. BFET will support innovative, private-sector led investment vehicles deploying capital for climate mitigation at scale to accelerate the deployment of equitable, affordable, and reliable clean energy. 

In April 2023, BFET launched a competitive two-stage application process with the first stage being a Request for Concept Proposals (RFCP). Based on the quality of concept proposals, select applicants will be invited to submit a full proposal for a potential grant or subcontract. The request for proposals can be viewed here.

BFET has selected two apparently successful applicants launching innovative financial vehicles that will mobilize and deploy capital into investments that accelerate the just energy transition in emerging economies with high emissions. These partners will receive catalytic grant funding from BFET to help better align investment opportunities with the needs of institutional investors and other capital providers, unlocking new, deep pockets of capital for the energy transition. BFET will work with them to ensure that local communities also benefit from the transition to clean energy, incorporating analysis of job creation and job quality into their fund management approaches.

The organizations selected to receive awards, announced in Dubai at COP28, are responsAbility Investments AG and Eversource Capital. For more information on the announcement, please see here. Please note CFDA has not yet finalized grant agreements, which require USAID approval, with these partners.

BFET is an activity under USAID’s Climate Finance for Development Accelerator (CFDA), a $250 million initiative designed to mobilize $2.5 billion in public and private climate actions and investments by 2030. To receive updates regarding BFET, please join the Climate Finance Investment Network (CFIN) or reach out to CFDA at info@CFDAccelerator.com.