Using Blended Finance Interventions to Support a Long-Time Ally in Coping with COVID-19

Published in
6 min readNov 13, 2020


Italy was among the earliest countries to report COVID-19 cases, and it was among the hardest-hit. Through INVEST, USAID is supporting Italian businesses that are manufacturing supplies and medical treatments to respond to the pandemic. The initiative takes a two-pronged approach, combining catalytic capital to attract private investment with technical assistance to help manufacturers retool production lines and increase their investment readiness.

(Photo: CDC from Pexels).

By Maxfield Hubych, INVEST Activity Associate

“It was strange in the beginning. There were 15, maybe 20 days, where it was really strange to see all of the city empty — the streets were empty,” Giovanni Roncucci recalls. He lives between Bologna and Ravenna, two cities in northern Italy among the first shut down by the coronavirus pandemic. In March 2020, he watched as governments and healthcare providers scrambled to acquire essential supplies from the rapidly-shrinking global reserve. “The really big issue was that we had no products — no PPE [personal protective equipment], no masks, no gloves, nothing. It was a really difficult situation that we faced,” he says.

In early April, just after the coronavirus had wreaked havoc in northern Italy, USAID committed $50 million to assist the nation in coping with and recovering from the crisis. As part of this response, USAID is supporting Italian businesses engaged in the research, development, or manufacturing of therapeutics, vaccines, and medical equipment or supplies. By June 2020, this initiative to aid the United States’ long-time friend and ally had resulted in the allocation of $10 million to support these local businesses.

USAID has no presence in Italy, and it had to rapidly develop a deep understanding of the Italian medical manufacturing sector while simultaneously designing and implementing an activity that could assist a wide swath of Italian businesses, including small- and medium-sized enterprises (SMEs). Through INVEST, an initiative that mobilizes private capital for better development results, USAID found the flexibility it needed to successfully implement an activity that bolsters Italy’s health sector and contributes to its economic growth by way of increasing investment into medical manufacturing.

Strategic Investment Advisor Noemi Danao-Schroeder, who leads INVEST’s Italy work, explains that INVEST has this flexibility because it is “sector agnostic.” Instead of approaching the problem entirely from one angle or the other, she explains, “INVEST can draw from its experience implementing in both the health and the business sectors to meet the joint needs of this unique activity.”

INVEST is part of a larger USAID strategy that aims to diversify the types of organizations working with USAID, with a focus on drawing in private sector firms that have not, or not extensively, worked with USAID in the past. Because INVEST uses rapid procurement and streamlined subcontracting practices, it can easily partner with small firms or those without government contracting experience, and these firms can provide USAID with niche expertise and valuable local context.

In the case of the Italy activity, INVEST partnered with four organizations, all new to working with USAID. DEM Consulting, an Italian firm specializing in the manufacturing and energy sectors, and Roncucci & Partners, an Italian firm focused on internationalization and business management, are providing technical assistance to Italian manufacturers to ramp up the manufacturing and distribution of PPE and medical supplies. DEM Consulting, focusing on five manufacturers in southern Italy, will help companies retool their current production lines to meet 12 percent of the regional demand for PPE while Roncucci & Partners will provide tailored production, operational, and financial consulting to 25 Italian companies, helping them become investment ready so that they can expand their production and distribution of PPE and other medical supplies.

The other two firms are using USAID funds to catalyze investment in companies developing or increasing their production. Slovenia-based PEDAL Consulting is working to coordinate USAID capital with the aid and incentives being offered by other international governments. Interlink Capital Strategies, a firm headquartered in Virginia, has designed a micro-funding approach, which works on a company-by-company basis to remove the roadblocks many businesses face when applying for loans or attracting investment.

“Our four partners are working on parallel avenues of implementation,” explains Nazia Salam, an INVEST Activity Manager supporting the Italy work. “The combined local expertise coupled with each partner’s unique approach creates a complementary portfolio of activities.”

Several beneficiary companies will receive both technical assistance and catalytic capital. While this work focuses on the individual needs of each company, it ultimately aims to improve the country’s medical manufacturing sector as a whole, making it more robust and resilient, and thereby increasing the long-term sustainability of the activities’ results.

Understanding the Local Context

Giovanni Roncucci, Founder and Chairman of Roncucci & Partners, knew that Italy’s coronavirus crisis required urgent action, and his firm shifted from their usual areas of focus to responding to the medical supply shortage. Within a month of the regional lock down in March, Roncucci & Partners had reorganized its team and started supporting the efforts of the Emilia-Romagna Regional Government to find and verify PPE suppliers.

“From the team point of view, this kind of job…was important for us because finally we were able to do something concrete for the benefit of our people, our citizens, of our colleagues, of our families,” Roncucci explains.

At that time, Roncucci & Partners also began compiling a database of Italian companies producing PPE. The firm’s expertise in market analysis makes them a valuable partner, and INVEST has worked with Roncucci & Partners to expand their database of companies, which had grown to include more than 400 by September 2020.

Understanding the sector context has been central to Roncucci & Partners’ success so far. “We have a method,” says Roncucci. “I think that if you have to support a single company, you have to understand the framework in which the company is working. Analyzing the market — analyzing the situation — is crucial to understanding which ways a company can increase and strengthen their capacity to compete in that context, so developing this in-depth analysis, for us, is crucial.”

As a local firm, Roncucci & Partners’ has on-the-ground knowledge of the manufacturing ecosystem, understanding both its challenges and opportunities. In Italy, 95 percent of local companies have fewer than 10 employees. Their small size gives the sector flexibility to respond to the demands of the COVID-19 crisis because employees can fill any role, and management structures tend to be horizontal instead of vertical. On the other hand, those same Italian SMEs are often organizationally unequipped to carry through the systemic changes required to meet demands of this nature, such as rerouting supply chains and distribution channels.

Investing in the Sector

As Italy confronts a second wave and copes with the long-term effects of the pandemic, shoring up the medical manufacturing sector remains a top priority. “This activity is not just about increasing PPE, but investing in the sector itself,” explains INVEST’s Danao-Schroeder.

To prepare for these second-order effects, INVEST is asking Roncucci & Partners to analyze their database in a new light and provide technical assistance to companies best positioned to transition to COVID-19 response. Roncucci & Partners is considering new criteria such as investment readiness, competitiveness, and even potential to enter the green sector in selecting its beneficiaries.

Roncucci & Partners will choose 25 companies to receive tailored production, organizational, and financial assistance. The firm hopes to leverage the flexibility of these small enterprises to increase their capacity for producing technological and technical products and create new commercial networks to increase sales in the local market and, potentially, at the international level.

Roncucci & Partners has offices in Brazil, Serbia, Tunisia, South Africa, and India. Combining an in-depth understanding of his nation’s manufacturing sector with his company’s international perspective, Roncucci has begun planning how to apply the lessons his company has learned at home to their clients across the globe. He predicts that “the way through which we will be able to have success in this project is by identifying ways in which we can replicate [this approach] in other countries.”

From INVEST’s perspective, Roncucci & Partners, along with DEM, Pedal Consulting, and Interlink Capital Strategies, have exactly the right capabilities needed for this unique activity: they have deep local and technical expertise and an understanding of the role they occupy within the context of the whole activity and how their role contributes to the activity’s overall goals. Together, these elements will improve the ability of Italy’s private sector to respond to the coronavirus pandemic.




INVEST, a USAID initiative, mobilizes private investment for development goals. It drives inclusive growth and sustainable development in emerging markets.