The establishment of the Convergence Blended Finance platform (RDFI phase III)

Project name: The establishment of the Convergence Blended Finance platform (RDFI phase III)
Project number: P001361
Evaluation title and type: Shift: Report of the Formative Mid-Term Evaluation of Convergence Blended Finance Inc.
Commissioned by: International Assistance Innovation Program (IAIP)
Consultant: Edward T. Jackson and Karim Harji from E.T. Jackson and Associates Ltd., Ottawa

Date: April 2020

Rationale and Purpose of the Evaluation

The International Assistance Innovation Program (IAIP) has commissioned an evaluation of the activities performed in the first three years of Global Affairs Canada’s contribution agreement ($19.17M over five years, from April 1, 2016, to March 31, 2021) with Convergence Blended Finance Inc., (or simply, “Convergence”).  The evaluation includes an analysis of the establishment and initial operations of Convergence, with the aim of allowing adjustments to be made over the remainder of the contribution agreement to maximize results. The findings from the evaluation support Convergence’s performance against the contribution agreement.

The purpose of the present evaluation is four-fold, to 1) Inform decision-making by Convergence and the Department of Foreign Affairs, Trade and Development (Canada) (DFATD)/GAC about necessary adjustments, if any, to achieve expected outcomes; 2) Identify any factors and constraints that are contributing to, or diminishing, the achievement of results; 3) Identify any factors and constraints that are contributing to, or diminishing, Convergence’s sustainability; and 4) Inform the Department’s decision-making regarding any requirement for temporary additional funding to Convergence, as well as other blended finance initiatives.

Specific Objectives of the Evaluation

The specific objectives of the evaluation are to 1) Assess the achievement of immediate outcomes (effectiveness) and the progress made toward intermediate outcomes; 2) Assess the relevance of Convergence in the global blended finance architecture; 3) Examine Convergence’s value-added from the stand-point of primary stakeholders; 4) Assess the efficiency of Convergence; 5) Assess the sustainability of results; 6) Examine and document Convergence’s financial sustainability and timeline; and 7) Provide findings, conclusions, recommendations and lessons to fulfill the stated evaluation purpose.

Development Context and Intervention

Blended finance is an approach to structuring investment deals that uses public and philanthropic funds to mobilize and lever additional private capital in support of sustainable development.  With the launching, of the Sustainable Development Goals (SDGs) in 2015, interest in blended finance as a tool to address financing gaps in SDG implementation grew rapidly among donor agencies, development finance institutions, foundations, impact funds, non-governmental organizations, and more recently, major corporations, banks and pension funds.

In 2016, GAC approved $20M over five years for the non-profit Convergence Blended Finance Inc. to establish a database and knowledge platform, grant funding for innovative solutions, and an investment network, with the aims of expanding the field of blended finance and increasing its leverage of private capital.

Intervention Logic

Ultimate Outcome: Increased capital leveraged to address financing gaps for SDGs in developing countries.

Intermediate Outcomes: 1100) Increased access to viable, new blended finance products; 1200) enhanced collaboration using Blended Finance models, including by the Design Funding Facility and Investment Network.

Immediate Outcomes: 1110) Increased capacity of grant recipients to design new, viable blended finance products; 1210) Increased ability of development institutions including GAC, to seek out opportunities to blend funds; 1220) Increased awareness and understanding of development institutions, including GAC, and private partners to blend funds.


The Co-operation partner (implementing organization) is Convergence Blended Finance Inc.

The primary stakeholders with whom Convergence engages are public, private and philanthropic investors interested in designing and executing, and scaling, blended finance solutions to achieve the SDGs. In particular, theses direct beneficiaries are current members of Convergence or potential new ones, and include: donor countries, development agencies, foundations, philanthropists, MDBs such as the Inter-American Development Bank (IDB) and the African Development Bank, DFIs as the International Finance Corporation and FinDev Canada, private investors, and project sponsors. Ultimately, the beneficiaries will be the men, women, boys and girls living in emerging and frontier markets that will benefit from the investments made thanks to blended finance.

In addition to GAC, Convergence’s other core funders at the time of the evaluation included Ford Foundation and Citi Foundation.

Evaluation Approach and Methodology

Informed by the principles of theory of change analysis, stakeholder engagement and gender equality, the evaluation team adopted a management orientation and employed a theory-based approach in the design and conduct of the study. Conducted from July through December 2019, the evaluation involved the review of more than 200 documents, interviews with 70 key persons at Convergence, 47% of whom are women, GAC and in the broader blended finance field, participant observation at select Convergence events, and a validation workshop to discuss preliminary findings and recommendations jointly with GAC and Convergence. Table ES-1 lists the number of interviewees carried out for each stakeholder sub-sample.

Table ES-1: Key Person Interviewees by Sub-Sample

1. Convergence Staff/Board Members126
2. Global Affairs Canada Officials158
3. DFF Grantee Representatives129
4    Members/Customer155
5. Partner and User Organizations, Sector Experts165

Key Findings*

Overall, the evaluation found strong evidence that Convergence has emerged over the past three and a half years of full-fledged programming as the globe’s leading centre of expertise in blended finance.  It has been widely recognized as a credible knowledge producer and cross-sector translator in a field that continues to require clarity and coherence.  The performance of Convergence in several areas—especially design-funding management, training, industry analysis and, recently, membership development—has been very strong.  Many member representatives and experts interviewed for this study highlighted Convergence’s talented leadership team, responsive and knowledgeable staff, and platform potential as key success factors 

At the same time, however, the evaluation documented underperformance in three areas.  First, the design and implementation of the investment network has not generated the originally expected flow of deals and matchmaking originally expected.  Second, Convergence has failed to develop a gender-equality strategy or policy for the intervention as required by its Contribution Agreement with GAC.  And third, apart from its regional office in Sub-Saharan Africa, the organization has only so far developed an initial presence in the Global South, where the need for SDG financing is most urgent and prioritized by its donor-agency and DFI partners. 

Convergence continues to be heavily dependent on GAC funding for its operational budget.  However, over the past 18 months, the organization has made very encouraging progress in building a business model of nearly 70 paying members, generating increased revenue from training, and charging management fees to manage higher volumes of design funding grants.  In addition, a CA$ 5 million grant for gender and climate finance from GAC was announced at the 2019 G-7 Summit.  Further, in late 2019, Convergence announced significant new contributions to its Design Funding Facility (DFF) from two important donor partners in the Asia-Pacific region, the RS Group family office and the Department of Foreign Affairs and Trade (Australia) (DFAT), adding to earlier grants from the Ford, Citi, and MacArthur foundations.


Leverage: Since the launch of the SDGs, the broader field of blended finance has learned that leveraging private capital to finance the SDGs is more difficult than anticipated, although still feasible and important.  Convergence’s own investment network has not catalyzed the quantum of deals originally expected.  However, as of late 2019, grantees of the platform’s DFF had, collectively, leveraged more than $400 million in additional capital for their blended finance solutions.  Some $104 million, about 25%, came from the private sector, most of it from a land conservation project on a rubber plantation in Indonesia through the Tropical Landscape Financing Facility.  Another $149 million came from three USAID guarantees.  Additional leveraged capital was reported by DFF grantees in early 2020.  These results have been achieved by the combined inputs of Convergence’s funds and advice, the contributions other grant-makers and investors, and, especially, the energetic efforts of grantee organizations themselves. 

Design Funding Facility: One of the areas of Convergence’s strongest performance has been in its management of the DFF.  The platform rigorously assessed more than 200 applications to the DFF and approved 20 grants, most of them in the 2016-2018 period, worth CA$ 8 million.  Most DFF interviewees and field experts reported that Convergence has executed this role with a very high degree of professionalism, effectiveness and efficiency.  Grantees consistently spoke highly of the responsiveness, flexibility and rigour of the DFF staff at Convergence, and the value of their monthly check-ins during grant implementation as well as in the post-grant period.  Grantees frequently commented that “this money is precious.”  It remains rare in the blended-finance space for proponents to be able to access front-end design and feasibility grants. 

At the same time, these interviews indicated that the planning and feasibility processes for these deals took 12 to 18 months, much longer than the usual six-month DFF grant period, a factor to be considered for future DFF grant-making. Further, Convergence staff and Board agree with DFF grantees that there is an opportunity for the platform to facilitate collective knowledge sharing and problem solving through an ongoing learning community of DFF grantees.

Training: Training has emerged as a key component of Convergence’s offerings to its members as well as to the broader fields of blended finance, international development and commercial finance.  Convergence offers a range of training services, including regular offerings for members as well as customized training programs for major organizations such as donors and DFIs.  For example, customized training for the Trade and Development Bank (TDB) contributed to the introduction of a new set of blended finance guidelines for the bank.  For UNDP and Nordic development agencies, customized training by Convergence has raised awareness of blended finance and created new opportunities to apply the approach across a range of sectors.  Fees for these services have become an important source of revenue diversification for the organization.  Convergence staff members also provide more generalized training in blended finance strategies and methods via conferences, workshops and webinars; these are not major direct generators of revenue but are helpful for membership development and field building. 

Knowledge Products: Convergence has generated a steady stream of staff-authored publications.  The organization’s annual State of Blended Finance (SOBF) report, published in 2017, 2018 and 2019, has become its most popular and highest profile knowledge product, and regularly referenced among both new and established actors.  Of 40 Convergence-authored publications appearing from 2015 through 2019, the platform produced some 13 case studies and 15 thematic or issue-based reports or briefs.  The case studies highlighted blended-finance structures, vehicles and deals both outside (e.g. the Danish Climate Investment Fund) and later, inside its portfolio of DFF grantees (e.g. on the Utkrisht Impact Bond, the KOIS Refugee Bond, and the Climate Finance Facility).

Further, eleven outputs were co-authored with such organizations as the OECD (four publications), the Bertha Centre at the University of Cape Town (three cases), the European Commission, the Brookings Institution, and the GIIN.  Two thirds of the publications in this sample were funded solely by GAC.  Other funders included the Business and Sustainable Development Commission (SOBF, the private sector), Sida (four publications, on gender and on water) and the MacArthur Foundation (case studies on media and on water).

Membership: Building a robust constituency of paying members is a central part of Convergence’s sustainability strategy.  The concept of membership in Convergence was fluid and evolving during the period under review here because first, blended finance as a field was only emerging and its stakeholders had to be identified and organized, and, second, Convergence’s own suite of products and services were also being built out, tested and refined.  By 2019, it was clear that Convergence needed a flexible, tiered system of membership options. 

As of September 2019, Convergence had attracted some 50 paying members, and by early 2020 Convergence had increased its paying membership to 67 organizations and received verbal commitments from another 17 organizations.  Moreover, the variety of members—donor agencies, DFIs, foundations, impact funds, banks, consulting firms—brought further influence and reach to Convergence.  Table ES-2 classifies the various types of current members of Convergence.

Table ES-2: Paying Members by Category, 2020

Category 1 TierMembership Fee*Number of Organizations
1. Market Builder$50,0005*
2. MDB/DFI/Foundation$10,00010
3. General Member$5,00050**
4. Data Users$2,5002
5. Verbal CommitmentUnpaid17
6. Complementary ChannelNil4
7. Complementary GranteeNil15
8. Joint MembershipNil12
*   Includes development agencies/ministries of Australia, Netherlands, Sweden, Switzerland and United States
** Includes commercial banks and asset managers
Source: Convergence, January 2020


Organizational Performance: Pursuant to the terms of the Contribution Agreement, the evaluation examined the fiduciary and organizational capacity of the governance and operating structures of Convergence. Operating with a small, lean Board of Directors of recognized business and investment leaders, the quality of Board members recruited and the advice they have provided has been high.  However, members have all been based in North America and only one is a woman.  The current staffing structure of 13 employees is logically sound and reasonably efficient relative to the work required.  Staff at all levels are skilled, dedicated, responsive and resourceful, and very diverse in terms of their gender and ethnic and cultural backgrounds.  Staff performance is guided by a comprehensive policy manual which is shaped by the legal and regulatory obligations of Convergence as a non-profit company, and exempt dealer, regulated under Ontario and Quebec securities laws. 

While the Contribution Agreement did not set out localization targets, Convergence moved early, in 2017, to recruit a Nairobi-based regional Managing Director for Africa.  However, it was not until early 2020 that a Managing Director (MD) based in Asia was appointed, and the Americas MD post remains unfilled.  Convergence continues to explore national-level franchising options for local affiliates and models for regional hubs.

Financial Performance: Global Affairs Canada is to be lauded for making such a major commitment—CA$ 20 million worth—to support this platform to build the global blended finance sector, for supporting Convergence to become a truly international mechanism, and for maintaining a light touch in its oversight and management roles.  However, the Contribution Agreement has been administered by no fewer than five program officers since 2016, though the contracted project monitor has remained on the file from the outset.

Overall, Convergence has been implemented efficiently, spending at a steady, responsible rate year over year against its approved annual budgets.  Moreover, the organization has demonstrated a lower ratio of personnel costs (40%) to its peer platforms and networks, whose own ratios range from half to two-third of their annual total budgets.  Outside of the GAC Contribution Agreement, Convergence currently charges funders a modest management fee for administering the DFF.  Within the norms of other development-agency administration charges, there is room to increase this fee.


Convergence has established itself as the leading centre of knowledge in the global blended-finance field in a relatively short time period.  It has very good brand recognition and is recognized as a credible source on the state of the market, capital flows and instruments, trends and case studies.  The platform remains highly relevant to key segments that constitute the supply (investors), demand (deal sponsors), and intermediaries (advisors, governments) within the blended-finance sector, though its levels and intensity of engagement vary. 

Even for larger institutions with some blended finance capacity, such as the African Development Bank (AfDB), there are multiple points of interaction with Convergence programs, including training, DFF and conference panels.  For smaller organizations, Convergence has played different roles, notably providing an overview of the trends and opportunities for staff who are not familiar with blended finance; providing broad guidance on specific sectors, structures, or challenges; or supporting internal champions and blended-finance specialists to advance their work. 


Achieving financial stability for a field-building platform like Convergence is challenging and takes time, as the experience of its peer organizations in microfinance and impact investing has shown.  However, from the outset of the Contribution Agreement, GAC and Convergence have both, correctly, prioritized sustainability.  And good progress has been made.  With some 70 paying members, Convergence’s tiered membership model is now producing a solid revenue stream and is complemented by more regularized income flows through training, especially, and other services. Another revenue source is an administration charge on DFF fund management, which Convergence hopes to grow. 

Moreover, the Convergence team has raised more than CA$ 13 million from foundations and development agencies over and above the Contribution Agreement budget, particularly for DFF grant-making in Asia (see Table ES-3). Notwithstanding these gains, however, multi-year grant funding for its operating expenses will be necessary for several more years to enable Convergence to serve the expanding field of blended finance while continuing to diversify and increase its various earned-revenue streams.

Table ES-3: External Fundraising by Convergence

Organization/YearAmount ($Millions)Purpose
Ford Fdn, 2016US$ .225Start-up
Citi Foundation, 2016US$ .10Start-up
MacArthur Fdn, 2019US$ .4515 DFF case studies
GAC, 2019CA$ 5.00Climate and gender finance
DFAT, 2019AU$ 3.50DFF window in Indo-Pacific
RS Group, 2019US$ 3.00DFF window in Asia
Six OrganizationsCA$ 13.58*Mostly DFF Support

Gender Equality

Gender equality is an area in which Convergence has underperformed. The organization has not developed and implemented an organization-wide gender-equality policy and strategy, as required by the Contribution Agreement.  Nor has it systematically integrated gender-equality considerations into its planning and reporting of activities, results and budgets, also a condition of the agreement.  Further, there has only ever been one independent Convergence Board Director who is a woman; all the other directors have been men.  Both Convergence, as project implementor, and GAC, in its oversight role, share responsibility for these deficiencies.

At the same time, however, Convergence has made some notable gains in the gender sphere:  its chief executive is a woman, still rare in the mainstream investment industry and in development finance; there is a good gender balance in its staff ranks; a majority of DFF grantee representatives have been women; and women have constituted half of all professionals trained to date by the Convergence team worldwide.  In addition, in 2019, Convergence prepared a Sida-supported brief on gender and finance, and animated workshops on this subject.  And recently, in strengthening the gender dimensions of its work, Convergence has begun to tap the expertise of the Criterion Institute, with the support of DFAT.

Environmental Sustainability

In contrast to gender, Convergence has performed well in terms of environmental sustainability.  The clearest evidence of this strong performance is found in the portfolio of its Design Funding Facility.  Half of all DFF grantees between 2016 and 2018 put environmental sustainability at the centre of their models, from multi-sector climate finance facilities, to clean energy funds and initiatives, to sustainable agriculture, natural land management, and clean water solutions. 

Moreover, it is primarily from this part of the grant portfolio that much of the leveraging of private capital has been achieved by grantees.  In addition, learning from these climate related DFF grants was converted into an array of publicly available knowledge products.  Convergence has an opportunity now to further systematize this body of knowledge and, as with gender, develop and organization-wide strategy for this cross-cutting issue.

Key Conclusions*

The mission of Convergence is ambitious and difficult.  Apart from the important areas of underperformance identified here, its first three and a half years of full programming have generally been successfully implemented.  The intervention is on track to achieve what it was mandated to do by the Contribution Agreement.

GAC is to be commended for providing significant support to Convergence to build the new field of blended finance while it has also developed and learned to sustain itself.  And the talented leadership and staff of Convergence deserve recognition for their hard work and innovation. 

At the same time, the findings of the evaluation indicate that, to improve its effectiveness, Convergence needs to make several key adjustments to its strategy and operations, including developing a full-fledged gender strategy, increasing its presence in the Global South, expanding and diversifying its Board of Directors, and putting its relationship with GAC on a more strategic footing.  It also needs to evolve its business model and product suite to more precisely advance the complementary objectives of scaling and impact. 

In terms of factors contributing to sustainability, the evaluation found that Convergence has made noteworthy gains in generating income from its training services as well as membership fees from a core group of now 70 organizations.  Moreover, it has also achieved success recently in negotiating substantial new grant funds for the DFF, particularly in Asia. 

However, several factors combine to limit sustainability prospects.  Among these are the relatively small number of organizations active in the blended finance field; a reluctance, so far, by some donor agencies and foundations to provide multi-year administrative funding for the platform; and competition with peer organizations for limited funding.

Given these various factors, and in light of the challenges associated with Covid-19, the evaluation team concludes that the Convergence intervention requires, and merits, additional budget support and an extension of time.  These steps should permit Convergence to substantially increase its paying membership and service revenues and, in cooperation with GAC, raise multi-year operational support from other bilateral donors and philanthropic foundations. These actions will significantly enhance the platform’s prospects for long-term sustainability.

Key Recommendations*

In view of the foregoing, the evaluation team makes seven priority recommendations. 

It is recommended that Convergence:

It is recommended that Global Affairs Canada:

*The findings, conclusions and recommendations listed above are those of the consultant and do not necessarily reflect the views of GAC or the Government of Canada. GAC does not guarantee the accuracy of the information provided in this report.

Management Responses

GAC response: The Department took note of the consultant’s findings, conclusions and recommendations and has shared them with relevant stakeholders for consideration.

Cooperation Partner response: The partner took note of the consultant’s findings, conclusions and recommendations and has shared them within the organization for consideration.

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