How it works
Grant absorbs first 10–20% of losses. Concessional layer takes next 20–30% with a sub-market coupon. Commercial senior tranche takes the rest at market rates. Each layer de-risks the one above.
Best for
Deals that are too risky for one capital type alone — climate, agri-processing, healthcare infrastructure.
high risk
DFI
grant
infrastructure
Related in Blended & structured
Performance-Indexed Convertible Instruments
Debt that converts to equity only on specific performance milestones. Otherwise repays as fixed debt. Conversion terms improve with performance.
Graduating Grants
Starts as a grant, converts to soft loan, then to commercial terms as the business proves itself. Each graduation triggered by milestones.