By Jonathan Mbiriyamveka
HARARE — The United Nations Resident Coordinator in Zimbabwe, Dr Rosemary Kalapurakal, has issued a sharp warning to government and development partners against using public and concessional funds to rescue projects that are fundamentally unviable, urging a more disciplined approach to blended finance.
Speaking at the Stanbic Bank Zimbabwe “Blue on Green” Sustainability Conference in Harare, Dr Kalapurakal challenged the prevailing approach to development financing, arguing that throwing money at poorly structured projects does not solve the underlying problem.
“If a project does not have a viable revenue model, a guarantee will not create one,” she said. “If the real problem is regulatory uncertainty, concessional finance cannot substitute for policy reform.
“And if a project is simply not sufficiently prepared, asking a commercial bank to carry that development risk is unlikely to solve the problem.”
Her remarks come as Zimbabwe, like many developing nations, increasingly turns to blended finance—a mix of public, concessional, and commercial capital—to fund critical infrastructure and development goals amid constrained fiscal space.
“Begin not with the instrument, but the constraint”
Dr Kalapurakal argued that the current approach to blended finance often puts the cart before the horse, designing financial instruments before properly diagnosing the actual barriers to investment.
“So perhaps we should begin not with the financing instrument, but with the constraint,” she said.
“Is it early-stage project preparation? Currency exposure? Off-taker risk? Construction or demand risk? Regulatory uncertainty? Or simply that individually viable projects are too small to interest institutional investors?”
She emphasized that the diagnosis must determine the financial structure, “not the other way around.”
The UN envoy warned that blended finance should not be used to shift disproportionate risk to the public sector or to disguise projects that should never have left the drawing board.
Dr Kalapurakal clarified that she was not advocating for the abandonment of blended finance, but for its strategic use. She outlined how different forms of capital need to do different jobs.
“Technical assistance and grants can support preparation,” she said. “Concessional resources can address genuine viability gaps. Guarantees can cover defined risks. Commercial debt and equity should finance opportunities with credible returns.”
The key, she argued, is that where the economics are sound and the obstacle is an identifiable risk, public and development finance can be used strategically to address that specific risk—allowing commercial capital to do what it does best.
She proposed a demanding test for every proposed use of concessional and blended finance: “What precisely is the market failure or risk we are addressing, and will the public or concessional dollar mobilise investment that would otherwise not move?”
Looking forward, Dr Kalapurakal urged the financial sector and development partners to move away from a succession of “bespoke transactions,” each requiring “heroic effort to get to financial close.”
She called for scalability, asking whether a successful structure for one project could be replicated for the next ten.
“Could guarantees or first-loss capital address specific risks rather than subsidise an entire transaction?” she asked. “That is the shift from financing projects to creating investable asset classes.”
To achieve this, she invited the banking sector—specifically hosts Stanbic Bank—to share their unique intelligence.
“You see transactions that we in the development community often do not,” she told the attendees. “You know why potentially good deals do not pass a credit committee. You know which risks can be priced, which can be mitigated, and which make a transaction simply unfinanceable.”
She proposed a stronger feedback loop between financial institutions, government (via ZIDA), and development partners. By sharing why deals fail, she argued, these recurring constraints can be elevated from individual banking problems to “development-policy intelligence,” allowing for targeted policy reform.
Dr Kalapurakal’s intervention serves as a reality check for Zimbabwe’s investment drive. While praising recent reforms by the Zimbabwe Investment and Development Agency (ZIDA), including the reduction of licensing turnaround from 21 days to five, she made it clear that bureaucratic efficiency alone will not attract capital.
Zimbabwe does not lack opportunity, she concluded. The task is to make that opportunity investable—and to ensure that public funds are used to unlock genuine private investment, not to prop up flawed projects.
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