Concessional and blended finance solutions could help unlock investment in the offshore wind and wider infrastructure sectors in emerging markets, a report from the Global Wind Energy Council has argued. We look at how this approach could help boost commercial banks’ confidence to invest in pioneering projects.
Financial institutions must support investment in offshore wind in emerging markets with new funding approaches. That was a call from a wind industry body last week.
Last Monday (20th April), the Global Wind Energy Council published the 2026 edition of its ‘Global Wind Report’, where it reported that 164.6GW of wind farms were installed in 2025, which is up 40.4% year-on-year. That 2025 figure included 155.3GW onshore and 9.3GW offshore, and means 1,299GW of wind was operational at the end of last year.
China continued to dominate in terms of wind farm completions, with 120.5GW added in 2025 alone. This put it ahead of the US (6.9GW), India (6.3GW), Germany (5.7GW) and Brazil (2.3GW) in the top five.
The report said countries could accelerate growth in the wind industry with fast-track permitting, grid upgrades, supply chain investments, and more support to electrify industry. But its focus was not just on established markets.
GWEC argued that countries could do more to support the rollout of large wind projects in emerging markets, especially offshore wind farms, by encouraging the use of funding solutions such as concessional and blended finance. It said these could “transform the economics of large-scale wind projects in emerging and developing economies” as they lower finance costs, improve risk allocation and help crowd in private capital.
This builds on a theme that GWEC covered in its November 2025 white paper called ‘Innovative Finance Mechanisms for Southeast Asia’s Offshore Wind Take-Off’. In this white paper, it argued that the wind industry was not achieving its potential in markets like the Philippines and Vietnam because developers struggle to access capital at reasonable rates. Large wind farms often face high risk premiums, shorter loan tenors and shallow local capital markets, which drives up development costs and makes government tariffs too costly.
It argued concessional and blended finance could play bigger roles in supporting wind developers outside southeast Asia.
Concessions for progression
‘Concessional finance’ refers to when private or public capital is offered at below-market terms, or with a higher risk tolerance, than the finance that commercial lenders typically offer for first-of-a-kind wind projects. Offering funds at concessional rates can address market gaps that stop projects progressing and stimulate investment.
Typically, this type of investment would be offered by development finance institutions (DFIs) or multilateral development banks (MDBs), but GWEC said that involvement by these types of investors in offshore wind tends to be limited and sparse.
It attributed this to challenges with projects including policy and regulatory uncertainty; constraints with infrastructure, grids and supply chain; and deal-level challenges such as large project sizes, a lack of bankable power off-take deals, and hesitation to be a first mover. These are valid concerns in countries where no offshore wind farms have been built.
In addition, this funding does not only need to be in the wind farms themselves, but can include support for major investments in ports and transmission grids. The justification for such investments should be that there is “demonstrable evidence that private capital is either unavailable or only available at cost levels that undermine project affordability”.
GWEC also discussed how ‘blended finance’ could combine concessional funding with commercial debt and equity in a single capital stack. The providers of the concessional funds would take on risks that the commercial lenders would not want to bear, such as those related to first losses, longer tenors or local currency risks.
The report highlighted that blended finance could be provided in the form of credit enhancement via guarantees or insurance on below-market terms; in transactions with a grant-funded technical assistance facility that could strengthen commercial viability pre- or post-investment; or grant funding to support transaction design or preparation.
Such blended finance solutions could open up offshore wind in emerging markets in Asia, but the principles could be applied more widely for projects that would “otherwise not materialise under purely commercial conditions”. It said blended finance structures could cut the weighted average cost of capital from around 11%-12% at a new project to around 6%-7%. This would give governments confidence to develop auction schemes, permitting regimes, and structures that provide developers with predictable revenues.
This is not simply a solution in Asia, though.
GWEC gave the example of the 1.14GW Baltic Power project in Poland, which Orlen and Northland Power developed in a 51:49 joint venture. It said the project initially struggled to gain investor interest because the Contract for Difference was denominated in local currency, but was able to achieve financial close after switching to euro-denominated payments and bringing in funding from MDBs, alongside credit insurance and guarantees from ECAs. This enabled the project to achieve financial close despite broader challenges in offshore wind.
Concessional and blended finance do not just have potential to close isolated funding gaps, but could create a “replicable blueprint for turning high-risk first-of-a-kind wind projects into bankable, affordable assets that anchor new markets”.
As such, this could play an important role in supporting the growth of wind and renewables in new markets.
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