Pooled financing mechanisms support local governments that are too small to undertake debt structuring and negotiations on their own, or at least to achieve a lower cost of funds than they could achieve alone. These funds usually come with specific eligibility criteria and may have a particular sector focus. Governments also often channel grant funds for project development and subsidies to specific activities through such entities.

Instrument category

Aggregation models

Implementation status

Low - limited evidence available

Enabling conditions and success factors
  • Strong coordination between stakeholders, ideally by a neutral party without conflict of interest, for example, in the energy efficiency services or products that can be purchased.
Instrument benefits
  • Overcomes high upfront costs.
  • Increases investor interest and confidence due to higher returns and greater stability than financing individual entities.
Challenges and risks to implementation
  • Many stakeholders don't realise the beneficial impact of energy efficiency improvements on buildings and equipment, so it is important also to raise awareness and promote pooling finance options.
  • Building consensus, trust and a shared approach among stakeholders can be challenging. A neutral enabling agent is often important to broker such relationships.
Case studies

Pooled finance and a blended finance approach in the Water and Sanitation Pooled Fund (WSPF) in Tamil Nadu, India

View case study

Pooling finance for energy efficient buildings in South Africa

View case study

Want to share new instruments?

The Alliance is actively seeking updates to the financial instruments library. Please complete the form to suggest additional instruments.

Fill out the form