As the use of impact bonds continues to grow, we ask whether results-based financing mechanism are able to fulfil their promises.
CGD Policy Blogs
OPIC recently announced it will invest $2 million in a Development Impact Bond (DIB) aimed at improving the availability and quality of cataract surgery services in Cameroon.
No one said creating development impact bonds (DIB) was going to be easy, but that hasn’t stopped the development community from trying to get them off the ground. The Fred Hollows Foundation, based in Australia, has been hard at work on a DIB to address cataract blindness in Africa. As the Foundation attracts partners to help fund and implement a pilot of the cataract bond, Dr. Lachlan McDonald, the Foundation’s senior health economist, and Alex Rankin, their Global Lead for Policy, Advocacy & Research, shared some lessons learned so far. With Lachlan and Alex’s permission, we’re turning some of those lessons over to you – we hope they’re useful to others seeking to move ahead with their own DIB.
If one thing was clear at the first High Level Meeting of the Global Partnership for Effective Development Cooperation, it’s that the 1500 people in attendance— representing the governments of developing, emerging and rich countries, multilateral institutions, business, philanthropy, and civil society—were not interested in how aid can be delivered more effectively from rich to poor countries but how the wide and growing range of actors who contribute to development can work together more effectively.
Innovative finance schemes are most likely to fail if the main aim is to bring in more money, and most likely to succeed if the aim is to create new ways of working.
The Multilateral Investment Fund (MIF) of the Inter-American Development Bank is launching a new $5.3 million facility to support Social Impact Bonds in Latin America and the Caribbean, making it the first development finance institution to commit resources to implementing SIBs.
The CGD and Social Finance Development Impact Bonds Working Group is designing a new type of investment vehicle to attract private investors who want to do good and do well while delivering development outcomes.