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MAXIMIZING THE EFFECTIVENESS OF EXISTING FINANCIAL INSTRUMENTS/LOANS IN TODAY'S SOCIETY

Maximizing the effectiveness of existing financial instruments The Fund’s current financial instruments include grants and concessional loans. In addition to the additional financial instruments described throughout this document, the Fund can also maximize the effectiveness of its existing financial instruments, especially grants. Grants need not necessarily be a one-time disbursement with no expectation of repayment; grants can also be used so that they are “recycled” and thus greatly increase their leverage and catalytic effect. Recycling represents the ability to be repaid and then redeploy the funding for a future, separate use. In this form of use, one grant may be deployed to bring many successive projects or programmes to fruition. The Fund would also retain the option to use grants as a one-time disbursement. A central feature of traditional grants is that there is no expectation of repayment for grants as traditionally defined. This has the potential of creating distortin...

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