SCALED is emerging as one of the most ambitious attempts yet to fix a stubborn problem in development finance: how to move from promising blended finance pilots to repeatable, large scale investment in sustainable projects across emerging markets and developing economies.
Why SCALED matters now
Despite a decade of rhetoric about mobilising trillions for the Sustainable Development Goals, private investment into emerging markets and developing economies remains far below what is needed. Blended finance has helped de risk pioneering transactions by combining concessional public capital with commercial funds, yet most structures are bespoke, slow to build, and too small or too complex to attract large institutional investors at scale.
For asset owners such as insurers and pension funds, this fragmentation translates into high transaction costs and limited pipelines of credible opportunities that justify deep due diligence. At the same time, public and catalytic funders struggle to maximise the leverage of their scarce concessional capital, constrained by different budget cycles, instruments, and impact frameworks. SCALED was designed precisely to address these systemic frictions rather than adding yet another isolated vehicle to an already crowded landscape.
From Hamburg Sustainability Platform to SCALED
SCALED started life as the Hamburg Sustainability Platform, launched at the first Hamburg Sustainability Conference in October 2024 by a group of governments and institutional investors seeking a more strategic approach to blended finance. Founding public partners included Canada, Denmark, France, Germany, South Africa and the United Kingdom, working alongside Allianz SE and the Canadian investor CDPQ, with the OECD as a knowledge partner. Since then, AXA and Zurich Insurance Group have joined, signalling strong interest from major global insurers in a more standardised way of investing in sustainable assets in emerging markets.
In 2025, the platform rebranded as SCALED – Scaling Capital for Sustainable Development – and stepped-up preparations to move from concept to an operational entity. German development cooperation has positioned SCALED as a central pillar of its efforts to leverage private capital, highlighting the initiative at consecutive Hamburg Sustainability Conferences as a key instrument for closing the SDG financing gap. For observers of the evolution of blended finance, SCALED marks a shift from ad hoc project support towards a more infrastructure like layer for structuring, matching and managing capital flows.
A pure play entity for blended finance
At the heart of SCALED is the creation of a dedicated entity whose sole purpose is to streamline the development and management of blended finance vehicles in close cooperation with public investors and private asset owners. Rather than raising and managing its own funds in competition with existing actors, the envisaged company will function as a service provider to the market, bundling capital commitments, developing standardised structures, and matching them with suitable asset managers.
The entity is expected to operate as a central platform: it will virtually pool soft commitments from public and private investors, assemble pre-configured investment vehicles, and drive negotiations towards faster first closings, before handing over execution to selected managers on the ground. This separation between the structuring layer and the asset management layer is deliberate; it allows SCALED to focus on overcoming upstream bottlenecks while tapping into diverse sector and regional expertise among existing fund managers.
Institutionalised standardisation – SCALED’s core innovation
SCALED’s distinctive contribution lies in what it calls institutionalised standardisation. In practical terms, this means moving away from tailor-made, one-off fund designs towards a modular toolbox of standardised capital structures, legal documentation, risk tranching approaches, impact requirements and reporting templates that can be reused across multiple vehicles. Standardisation here is not an end in itself but a way to cut the time and cost it currently takes to bring blended finance products to market, often measured in years.[9]
By harmonising requirements for public capital and providing common language and metrics for all stakeholders, SCALED seeks to reduce non value creating negotiation loops that today delay or derail deals. For institutional investors, repeatable structures supported by familiar documentation should make it easier to assess, compare and allocate to sustainable investment strategies focused on emerging markets. For public funders, shared templates and processes promise greater leverage from concessional resources and a clearer line of sight from budget decisions to mobilised private capital.
A modular, holistic approach along the value chain
SCALED operates with a holistic view of the blended finance development process, from initial target setting through structuring to implementation and monitoring. Its approach is modular in the sense that different standard building blocks can be combined to fit distinct asset classes or regional contexts without starting from scratch each time. This design philosophy aims to preserve enough flexibility to respond to diverse needs while still capturing the efficiency gains of standardisation.
Early, structured dialogue between public and private stakeholders is another cornerstone. By bringing asset owners, donor agencies, development finance institutions and asset managers together at the target setting stage, SCALED hopes to align expectations on risk appetite, impact objectives and timelines before legal drafting begins. In turn, this should produce investment vehicles that not only meet SDG priorities but also pass the internal hurdles of investment committees in large financial institutions.
Value for public and catalytic investors
For public and catalytic investors – including governments, multilateral development banks, development finance institutions and philanthropies – SCALED promises a more systematic way to deploy concessional capital for maximum leverage and impact. Efficiently allocated catalytic capital, linked to harmonised impact requirements, is expected to attract commercial capital at increasing scale and generate higher SDG returns per unit of public money. The platform nature of SCALED should also help resolve coordination problems across different budget cycles and instruments, making it easier to blend domestic resources, bilateral funds and multilateral facilities.
Moreover, by positioning itself as a go to partner for innovative large-scale initiatives, SCALED can offer public actors a pipeline of investment ready structures aligned with climate, biodiversity and inclusive development priorities. For ministries and agencies under pressure to demonstrate results on private capital mobilisation, the ability to anchor multiple vehicles in a recognised standardised framework could become an important political and technical asset.
Value for private asset owners
Institutional investors frequently highlight the lack of scalable, comparable instruments as a key barrier to allocating more capital to sustainable projects in emerging markets. SCALED responds by offering predictable, institutionalised and standardised structures that enable systematic assessment of opportunities, closer to how investors currently look at other asset classes. Where today each blended finance fund may require unique analysis, tomorrow a family of SCALED aligned vehicles could be analysed along common parameters of risk, return, liquidity and impact.
Crucially, the initiative also seeks to make engagement more efficient by handling much of the upstream design work and convening catalytic partners, so that asset owners can plug into pre negotiated frameworks rather than initiating each conversation from zero. Done well, this could lower the threshold for investors that are currently hesitant but open to allocations in the low single digit share of their portfolios, thereby unlocking billions over time.
Value for DFIs, MDBs and asset managers
For development finance institutions and multilateral development banks, SCALED offers an institutional partner that broadens the pool of private capital willing to co-invest in SDG related projects. By using standardised structures, DFIs and MDBs could plug in their credit enhancement instruments, local currency facilities or policy-based lending more seamlessly into vehicles capable of attracting large institutional commitments. The initiative can also help them blend their own resources with other concessional sources, reducing duplication and streamlining governance.
Asset managers stand to benefit from a clearer route into blended finance deals that might otherwise be out of reach. SCALED aims to provide de risked, partially funded vehicles that asset managers can implement and scale, without spending several years on design and fundraising before deploying capital. As more large-scale capital becomes available and access becomes more transparent, managers can invest in building robust pipelines and local partnerships, contributing to deeper markets in sectors such as renewable energy, sustainable infrastructure and inclusive finance.
Potential impact and next steps
Depending on the strength of public and private funding commitments, SCALED expects to leverage a total fund volume of at least 15 billion US dollars over the coming decade, based on indicative leverage ratios between one to five and one to ten. This would involve launching multiple vehicles per year, each using standardised templates but tailored to specific themes and regions. The initiative is also exploring a global investment strategy and a set of applied standards and guidelines that can be replicated beyond its own platform, potentially influencing the wider blended finance market.
Preparations are under way to establish the SCALED entity as a separate legal company, with operations expected to start around the end of 2025. Once in place, SCALED plans to prioritise asset classes capable of crowding in large international institutional investors at scale, and to launch its first vehicle soon after setup. If successful, this model of institutionalised standardisation could become a reference point for how the development community and capital markets collaborate to tackle the SDG financing gap in a more predictable and efficient manner.
Why SCALED matters for policy debates
For policy makers and practitioners following debates on reforming the international financial architecture, SCALED is more than a technical fix. It brings together governments, development institutions and private investors in a structured coalition that aligns with calls from G7 and G20 processes to use public balance sheets more strategically and to crowd in private capital at scale. In German development policy, the initiative complements efforts under the BMZ action plan on strong partnerships for a successful global economy, which explicitly emphasises standardised blended finance as a tool to mobilise private investment.
The Hamburg Sustainability Conference has provided a political stage for SCALED, linking it to broader agendas on responsible AI, inequality reduction and climate action. For analysts and advocates, this linkage matters: it situates blended finance not as a narrow technocratic agenda but as part of a wider push to make multilateralism more effective and to deliver concrete, measurable contributions to the 2030 Agenda.
Weblinks
SCALED official site: https://scaledevelopment.org
SCALED about page: https://scaledevelopment.org/about-us/
SCALED press release June 2025: https://scaledevelopment.org/press-release-june02/
BMZ English press release on SCALED: https://www.bmz.de/en/news/press-releases/scaling-capital-for-sustainable-development-254912
BMZ article on SCALED in German: https://www.bmz.de/de/aktuelles/aktuelle-meldungen/hsc-impulsgeber-staerken-internationale-zusammenarbeit-255016
OECD case note on SCALED: https://www.oecd.org/en/publications/blended-finance-case-studies_2fb90b9a-en/scaling-capital-for-sustainable-development-scaled
GAIL overview of SCALED: https://gailnet.org/de/scaled-institutionalised-standardisation-to-scale-blended-finance/