By blending different sources of capital such as government grants, concessional funds, and private capital, the project risks can be diversified to align with the risk appetite of each capital provider. An example of a successful blended finance is the Philippines Water Revolving Fund (PWRF)3. PWRF is a co-financing facility by the Development Bank of the Philippines (DBP) in collaboration with Japan International Cooperation Agency (JICA) and USAID to incentivise commercial banks to lend to the water and sanitation sector. Key features include a sovereign guarantee by the Philippines' Department of Finance, a credit risk guarantee by a private guarantor, and technical capacity building programmes in water project appraisal for inexperienced lenders. The fund has successfully channelled over USD 234 million towards 21 water and sanitation projects, with approximately 60% crowded in from commercial banks. As a result, roughly 6 million people now have improved access to piped water. This success story exemplifies how blended finance can unlock private sector participation and generate positive economic and social outcomes. Thirdly, DFIs have the capacity to influence government policy to build long term solutions. Given DFIs' wealth of expertise and a holistic understanding of the sectors and segments served, as well as close affiliation with Government bodies, DFIs are wellpositioned to surface pain-points and advise governing bodies on suitable policies to achieve climate goals. A good case of policy additionality is the Melaka Green City Action Plan (GCAP), developed by the Melaka State Government with technical assistance from the Asian Development Bank (ADB)4.

By leveraging each other's expertise and pooling resources, DFIs can implement effective strategies that would otherwise be challenging to undertake alone. For example, the Coastal Climate Resilient Infrastructure Project (CCRIP)1 in Bangladesh exemplifies such collaboration between multiple DFIs and the government. Funding from International Fund for Agricultural Development (IFAD), Asian Development Bank (ADB), KfW, and the Government of Bangladesh, supports CCRIP's goal of improving the infrastructure in disaster-prone regions in southwest Bangladesh. The project focuses on constructing climate-resilient roads, designed to endure cyclones through strategic engineering, using resistant materials, raised construction, and effective flood and erosion management2. CCRIP has achieved significant outcomes, benefitting local farmers and entrepreneurs by improving accessibility and connectivity in remote areas, even during the monsoon season. The project not only builds and upgrades markets, but also significantly boosts sales of agricultural produce and enhances access to inputs. Additionally, CCRIP enhances climate change adaptation capacity and promotes employment opportunities and gender empowerment. CCRIP demonstrates the power of collective action in addressing specific national economic issues or local community development, and therefore sets a compelling precedent for Malaysian DFIs. Instead of working in isolation, DFIs can leverage pooled  1/3  BIS - Central bankers' speeches  resources and expertise to jointly deliver targeted support, catalyse effective infrastructure development and drive transformative change. Secondly, DFIs can use blended finance to mobilise both public and private capital, specifically targeting near-bankable projects with significant economic spillover.