MIF and Swiss Government Partner to Launch the First Social Impact Bond Fund in ...

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Oct 2016
Colombia , October, 07 2016 - The Multilateral Investment Fund (MIF) of the Inter-American Development Bank (IDB), in partnership with the Government of Switzerland, through its State Secretariat for Economic Affairs (SECO), and the government of Colombia, through its Department for Social Prosperity (DPS), are launching an innovative pay-for-success model to improve urban employment for vulnerable groups in Colombia.

The model, known as a Social Impact Bond (SIB), is an innovative type of public-private partnership through which impact investors provide up-front funding for organizations to deliver a service that benefits a vulnerable population. Repayment to the investors depends on the project’s outcome. Such models have been used in Western Europe and the United States since 2010, but have only recently been explored for emerging markets. The IDB and the MIF have been working since 2014 on laying groundwork for developing SIB projects in Latin America and the Caribbean.

The project will facilitate the launch of three social impact bonds that will tie payments to improvements in employment outcomes. The project will also include technical assistance resources for market development and capacity building, and will rely on partners, including several Colombian government agencies, to achieve scale.

Other partners in this effort include Fundación Corona, which will serve as the executing agency for the project’s technical assistance; Fundación Bolivar Davivienda and Fundación Mario Santo Domingo, which will apply their resources, credibility, and leadership in impact investment to help catalyze investment in the first social impact bonds; Instiglio, which will provide technical advisory support to the MIF and the Colombian government; and Fundación Pro Bono, which will provide access to affordable legal advice.



 

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