Blended finance is gaining traction but does the model reflect Indigenous priorities?
The presentation “Catalysing Change” by the Transition Accelerator offers a clear and accessible primer on the principles of blended finance. It explains how different forms of capital can work together to make projects investible that would otherwise fail to attract market funding.
While the model is increasingly common in environmental and climate finance, its use raises important implications for equity, governance, and alignment with Indigenous-led development, particularly in the Canadian context.
1. Clarity of Purpose and Structure
The presentation does a commendable job distinguishing between capital types and their objectives. Commercial capital seeks financial return. Public and philanthropic capital may be more flexible, accepting higher risk or lower returns in exchange for environmental and social benefits. The language is neutral and descriptive, suitable for a mixed audience of investors, funders, and policymakers.
Where the presentation succeeds most is in its simplicity. The worked example—funding a $10M environmental project that delivers measurable ecological outcomes—is effective in demonstrating how concessional capital can “bridge the gap” and unlock private investment. It highlights the reality that many worthwhile projects do not meet the return hurdle of private funders unless risk or return profiles are adjusted through blended structures.
2. Limited Treatment of Structural Power
The document positions concessional capital as an “enabler” of impact but does not interrogate the structural dynamics of who sets priorities, who owns the outcomes, or who ultimately benefits. There is no discussion of power imbalances between capital providers and project hosts. As a result, blended finance is presented as a technical fix to a financial problem, rather than a system embedded in larger governance, land, and rights questions.
In the Canadian context, especially with respect to Indigenous communities, this omission is significant. Many projects that attract blended finance occur on or near Indigenous land, and carry potential impacts on treaty rights, traditional economies, or ecological governance. Without frameworks for co-decision-making, even well-intentioned capital can reproduce extractive dynamics.
3. No Mention of Indigenous Leadership or Consent
The presentation does not reference Indigenous ownership models, Indigenous equity participation, or Free, Prior and Informed Consent (FPIC). This is an important gap if the model is to be adapted for regions like Ontario, British Columbia, or northern Canada, where infrastructure and environmental projects are frequently proposed in Indigenous territories.
Blended finance, to be equitable, must not only unlock capital but also transfer authority. Without integrating Indigenous governance and legal traditions, concessional funding risks becoming a vehicle for external priorities—efficient, but potentially misaligned with long-term community well-being or self-determination.
4. Environmental Framing Without Cultural Dimension
Environmental outcomes are quantified in terms of carbon sequestration, habitat protection, and land restoration. These are legitimate and measurable goals. However, for many Indigenous communities, environmental value is also cultural, spiritual, and intergenerational. A land restoration project may succeed ecologically but fail socially if it excludes Indigenous knowledge holders or alters governance over the land.
The document would benefit from acknowledging that environmental finance is not value-neutral. It operates in contested spaces where definitions of success and accountability vary. A more complete model would build in Indigenous frameworks for land care, consent, and benefit-sharing.
5. Implications for Policy and Investment
For blended finance to serve both environmental and justice outcomes, its application in Canada must evolve beyond concessional terms and risk mitigation. It must include:
Indigenous co-governance in project selection and design
Legal adherence to UNDRIP and FPIC
Structures that support Indigenous ownership, not just partnership
Capacity building that enables long-term, Indigenous-led investment strategies
These principles are not incompatible with blended finance. On the contrary, they are necessary to ensure that concessional capital does not subsidize exclusion.
Conclusion
“Catalysing Change” introduces blended finance in an accessible way. It explains how concessional capital can make high-impact projects bankable. But it stops short of addressing how these models intersect with Indigenous rights, land relationships, and governance.
If blended finance is to fulfill its promise in Canada, it must move beyond technical structuring and account for the social and legal contexts in which it operates. Environmental impact alone is not enough. Process, partnership, and power-sharing matter equally.