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The second failure mode of blended finance: under a single-cycle instrument, de-risking (improving returns within a transaction) and catalysing (changing the conditions of the next cycle) are different acts, and the architecture is structurally biased toward the first while the field's vocabulary treats them as synonyms.
A transaction can be flawlessly de-risked, close on schedule, return capital to senior investors, and leave the cost of capital for the next comparable transaction exactly where it was — subsidy that resembles catalysis at deployment.
WBF Section 4