What do you mean by “catalytic capital?”

Catalytic capital is investment capital — debt, equity, guarantees — deployed on terms that accept greater risk or a lower return than a conventional investment would require, in order to generate positive impact and mobilize private sector investment that would not otherwise happen. It is used deliberately by mission-driven investors, including MDBs, DFIs, philanthropies, foundations, and family offices.

The Catalytic Capital Repository includes various types of “catalytic capital” and other risk-mitigation instruments, including:

• Guarantees (concessional and non-concessional)
• Concessional and subordinated debt
• Concessional equity
• Grants aimed at investment vehicles, such as debt or equity funds, viability gap funding for project finance