1.5 THREE FACTS
Three facts about a programme decide its instrument
6 min
Earns revenue or saves a payer money
Outcome can be priced and verified
Cash flow can repay capital
Answer all three to reveal the instrument.
| Earns revenue or saves a payer money | No | No | Yes | Yes |
|---|---|---|---|---|
| Outcome can be priced and verified | No | Yes | Optional | Optional |
| Cash flow can repay capital | No | No | Partly | Yes |
| Instrument | Grant | Results-based finance | Blended finance | Impact fund |
| Typical forms | Pilot grant, evidence grant, technical assistance | Impact bond, outcome fund, performance contract | Guarantee, first loss, concessional loan, revolving fund | Debt fund, equity fund, impact-linked loan |
| The barrier it crosses | No evidence yet | No revenue, and funders fear paying for failure | Lenders judge the risk too high | Tickets too small to reach investors |
| How it crosses it | The grant funds the pilot and the data that open the next instrument | Investors pre-finance, and the payer pays only for verified results | A guarantee or first loss absorbs it, so private money enters | A fund pools investors and places debt or equity at scale |