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Blended finance, the spinach of investing, will make us stronger

If governments backstop private capital, it could kickstart infrastructure building

The White House faces a conundrum: President Joe Biden has bold infrastructure plans but how the heck will he pay for them?

Biden has repeatedly promised to spend $2tn or so to upgrade (and green) America’s crumbling infrastructure. This is likely to be popular with voters and business leaders: last week Dow’s Jim Fitterling called on Biden to use the electricity crisis in Texas as a catalyst for overhauling the national grid.

Yet the Congressional Budget Office recently warned that America’s debt will hit 102 per cent of gross domestic product this year — even before new infrastructure spending or Biden’s $1.9tn Covid relief package. And corporate lobbying groups are expressing horror at the idea of raising taxes to fund infrastructure spending. 

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