Funding Forward: Viability Gap Funding and Blended Finance Training Course

Introduction

Many critical infrastructure and development projects, while essential for economic growth and social progress, may not generate sufficient financial returns to attract full commercial investment, thus presenting a "viability gap." In such scenarios, Viability Gap Funding (VGF) provides targeted public financial support to make these projects commercially attractive, enabling the leveraging of private capital for public good. Similarly, Blended Finance strategically combines concessional public or philanthropic funds with private capital to unlock investments in sectors or regions where commercial financing alone is insufficient due to high perceived risks or lower returns, effectively bridging the development finance gap.

This intensive training course is meticulously designed to equip public sector officials, development finance professionals, private sector investors, and project developers with the advanced knowledge and practical tools required to effectively utilize Viability Gap Funding and implement Blended Finance structures. From understanding the rationale and mechanisms of these innovative financing approaches to designing appropriate instruments, assessing eligibility, managing risks, and structuring complex multi-layered deals, you will gain the expertise to mobilize significant capital for sustainable development. This empowers you to transform economically vital but financially challenging projects into bankable opportunities, accelerating infrastructure development and achieving critical development goals.

Target Audience

  • Government Officials from Ministries of Finance, Planning, and Infrastructure.
  • Development Finance Institution (DFI) Professionals and Fund Managers.
  • Public-Private Partnership (PPP) Unit Staff and Project Appraisers.
  • Private Sector Project Developers and Investment Managers.
  • Social Impact Investors and Philanthropic Organizations.
  • Financial Advisors and Consultants in development finance.
  • Multilateral Organization Staff involved in project funding.
  • Anyone involved in structuring or assessing projects requiring catalytic public or concessional finance.

Duration: 10 days

Course Objectives

Upon completion of this training course, participants will be able to:

  • Understand the fundamental concepts and rationale behind Viability Gap Funding (VGF) and Blended Finance.
  • Grasp the distinctions between VGF and other forms of public support or subsidies.
  • Analyze the conditions under which VGF is an appropriate financing mechanism.
  • Comprehend various Blended Finance instruments and their strategic application.
  • Evaluate the eligibility criteria and appraisal processes for VGF schemes.
  • Develop practical skills in designing and structuring Blended Finance transactions.
  • Navigate the complexities of risk allocation in projects utilizing VGF and Blended Finance.
  • Formulate robust financial models to demonstrate the impact of VGF and concessional capital.
  • Understand the role of different stakeholders in implementing these financing approaches.
  • Champion best practices in achieving additionality and maximizing development impact with Blended Finance.
  • Recognize the importance of transparency, governance, and accountability in using public funds.
  • Appreciate the fiscal implications and long-term sustainability of VGF and Blended Finance.
  • Distinguish between market-rate, concessional, and catalytic capital.
  • Understand the monitoring, evaluation, and reporting requirements for these funding mechanisms.
  • Strategize for scaling up the use of VGF and Blended Finance for greater development impact.

Course Content

  1. Introduction to Infrastructure Funding Gaps
  • The global infrastructure deficit and financing challenges.
  • Limitations of traditional public and commercial financing.
  • The concept of financial viability vs. economic justification.
  • The role of innovative financing solutions to bridge the gap.
  • Overview of the course objectives and scope.
  1. Understanding Viability Gap Funding (VGF)
  • Definition and core principles of Viability Gap Funding.
  • Rationale for VGF: attracting private investment to essential projects.
  • How VGF works as a capital subsidy or grant.
  • Typical sectors and project types suitable for VGF.
  • Benefits of VGF for public and private sectors.
  1. VGF Eligibility and Appraisal Process
  • Key eligibility criteria for VGF schemes (e.g., competitive bidding, project type).
  • The appraisal process for VGF applications.
  • Calculating the "viability gap" and optimal VGF quantum.
  • Role of independent review and due diligence in VGF assessment.
  • Decision-making frameworks for VGF approval.
  1. Overview of Blended Finance
  • Definition and strategic objectives of Blended Finance.
  • Why Blended Finance is critical for Sustainable Development Goals (SDGs).
  • The core principle: using public/philanthropic capital to mobilize private finance.
  • Key stakeholders in Blended Finance ecosystems.
  • Blended Finance principles and best practices.
  1. Blended Finance Instruments: Debt
  • Concessional loans: characteristics, terms, and application.
  • Subordinated debt and junior debt structures.
  • Risk-sharing facilities and credit lines.
  • Guarantees: types, coverage, and impact on risk profile.
  • Case studies of debt-based blended finance.
  1. Blended Finance Instruments: Equity & Grants
  • Junior equity and first-loss capital.
  • Performance-based grants and output-based aid (OBA).
  • Technical assistance grants for project preparation or capacity building.
  • Convertible debt and other hybrid instruments.
  • Examples of equity and grant-based blended finance.
  1. Structuring Blended Finance Transactions
  • Designing multi-layered capital stacks.
  • Tailoring instruments to specific project risks and funding gaps.
  • Balancing financial returns with development impact.
  • Waterfall mechanisms and distribution of returns.
  • Optimizing the capital structure for bankability and affordability.
  1. Financial Modeling for VGF and Blended Finance
  • Integrating VGF components into project financial models.
  • Modeling the impact of concessional finance on IRR and DSCR.
  • Demonstrating additionality of blended finance in financial models.
  • Sensitivity analysis and stress testing with VGF/Blended Finance.
  • Communicating financial viability with VGF/Blended Finance.
  1. Risk Management in VGF and Blended Finance Projects
  • Identifying specific risks addressed by VGF and Blended Finance.
  • Allocating VGF and concessional capital to mitigate particular risks.
  • Managing political, regulatory, and currency risks with blended instruments.
  • Role of guarantees and insurance in risk mitigation.
  • Developing comprehensive risk frameworks for blended deals.
  1. Governance, Transparency, and Accountability
  • Establishing robust governance structures for VGF and Blended Finance.
  • Ensuring transparency in allocation and disbursement of public funds.
  • Avoiding market distortion and crowding out private investment.
  • Accountability mechanisms for development impact and financial performance.
  • Ethical considerations and anti-corruption measures.
  1. Legal and Contractual Aspects
  • Key clauses in VGF agreements and grant agreements.
  • Intercreditor agreements in Blended Finance structures.
  • Legal frameworks for different blended finance instruments.
  • Ensuring enforceability of multi-party international agreements.
  • Due diligence requirements for VGF and Blended Finance transactions.
  1. Institutional Frameworks and Policy
  • Role of national VGF policies and guidelines.
  • Institutional arrangements for implementing Blended Finance programs.
  • Importance of a clear mandate for public entities engaging in blended finance.
  • Capacity building within public sector institutions.
  • Policy coherence and enabling environment for VGF/Blended Finance.
  1. Case Studies of Viability Gap Funding
  • Analysis of successful VGF projects in different sectors.
  • Lessons learned from VGF schemes globally.
  • Examination of the impact of VGF on project delivery and private sector participation.
  • Challenges faced and solutions implemented in VGF projects.
  • Best practices in designing and managing VGF programs.
  1. Case Studies of Blended Finance Successes
  • In-depth review of innovative Blended Finance transactions.
  • Analysis of how blended finance achieved development impact and financial returns.
  • Case studies from various sectors (e.g., renewable energy, healthcare, agriculture).
  • Understanding the role of different partners in real-world blended deals.
  • Identifying replicable models and strategies.
  1. Monitoring, Evaluation, and Future Trends
  • Developing robust M&E frameworks for VGF and Blended Finance projects.
  • Measuring development impact and financial performance.
  • Reporting mechanisms for stakeholders and funders.
  • Emerging trends in VGF and Blended Finance (e.g., climate finance, social bonds).
  • Scaling up blended finance for larger impact and new sectors.

CERTIFICATION

  • Upon successful completion of this training, participants will be issued with Macskills Training and Development Institute Certificate

TRAINING VENUE

  • Training will be held at Macskills Training Centre. We also tailor make the training upon request at different locations across the world.

AIRPORT PICK UP AND ACCOMMODATION

  • Airport Pick Up is provided by the institute. Accommodation is arranged upon request

TERMS OF PAYMENT

Payment should be made to Macskills Development Institute bank account before the start of the training and receipts sent to info@macskillsdevelopment.com

For More Details call: +254-114-087-180

 

 

Funding Forward: Viability Gap Funding And Blended Finance Training Course in Burkina Faso
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