Blended finance is the strategic use of development finance for the mobilization of additional finance towards sustainable development in developing countries. Blended finance attracts commercial capital towards projects that contribute to sustainable development, while providing financial returns to investors
Blended finance is not an investment approach, instrument, or end solution. It is also different from impact investing. Impact investing is an investment approach, and impact investors often participate in blended finance structures. Convergence focuses on blended finance in developing countries.
Blended finance helps making social enterprises investible and thereby unlock impact investment on a much more significant scale by e.g. mitigating the risk of a market based investment as the public funder carries parts of the investment risk (de-risking)
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