The Road to the SDGs

PURPOSE X Meeting the ambitious targets set out in the SDGs requires significant increases in financial resources compared to what has traditionally been channelled to developmental projects. X IsDB, together with ISFD and ICIEC, has designed a Social Outcome Guarantee Fund to provide guarantees for NGOs willing to structure a Development Impact Bond in eligible sectors. X The initiative will: – Protect fixed-income investors from development outcomes and non- delivery risks – Absorb some of the risks of the structure to enable the issuance of the Development Impact Bond – Help to reassure fixed-income investors, who frequently perceive the risk of outcome non-delivery as high, especially in the context of developing countries – Facilitate the issuance of Development Impact Bonds in IsDB MCs – Drive local and international NGOs in participating countries towards more outcome-focused interventions. METHOD X The initiative brings an innovative approach to development and humanitarian finance: – Creating synergies through formalised engagement platforms between development banks and NGOs – Leveraging the core strengths of each party – Achieving the aim of transforming IsDB into a platform for developers – Leveraging development finance, humanitarian aid and private capital investment to support Development Impact Bonds. X Development Impact Bonds can act as a strategic instrument to support development and humanitarian actors to focus more on outcome delivery. X The bonds are based on a ‘pay for results’ mechanism, with grant payments committed from donors (outcome funders) only after implementing the projects and delivering the pre-agreed outcomes. X Planned outcomes directly contribute to key social benefits for target populations in MCs, related to: – Education – Health – Poverty alleviation. X Primarily, the model blends outcome- T hrough a Social Outcome Guarantee Fund and other initiatives, IsDB is supporting development projects via interventions that secure outcomes and minimise investor risk Social Outcome Guarantee through the One WASH Fund The One WASH Fund uses an innovative financing mechanism designed to attract new philanthropic and private investor capital in addition to traditional humanitarian donor financing [ 116 ] SDGs