SAN FRANCISCO — Mark Green, administrator of the U.S. Agency for International Development, will announce a new development impact bond aimed at reducing maternal and newborn deaths in India, during the closing plenary of the 2017 Global Entrepreneurship Summit.
Launched Thursday, the Utkrisht Impact Bond, named for the Hindi expression for excellence, will fund maternal and newborn health in the Indian state of Rajasthan. DIBs are results-based contracts, in which investors — in this case UBS Optimus Foundation, a grantmaking organization focused on improving the lives of children — provide financing for social programs upfront. Then donor organizations — in this case USAID and Merck for Mothers — repay investors their principal plus a return determined by whether targets are achieved. DIBS are focused on outcomes, in this case improving the access to and the quality of care in up to 440 private health care facilities in the state, so that they achieve the new certification standard developed by the National Accreditation Board of Hospitals and Healthcare Providers and the Federation of Obstetric and Gynaecological Societies of India.
USAID and its partners are calling this the world’s first health impact bond, although these innovative finance tools are also being applied to eye care. And while Development Innovation Ventures is supporting a DIB on poverty alleviation in sub-Saharan Africa, this is the first DIB from USAID outside of DIV. UBS Optimus Foundation will provide up to $3.5 million in initial working capital so service providers can begin their work with private facilities, and USAID and MSD for Mothers are committing up to $8 million in outcome funding if the targets are met.
“This results-based financing mechanism is ground-breaking in that it takes a business approach to development, while still targeting basic needs like improving the quality of care and private facilities,” Green said in a press release provided to Devex ahead of the announcement. “By leveraging the assets and skills of a diverse group of partners across the public and private sectors, we are stretching our investments further while saving more lives.”
This is the first DIB focused on maternal and child health, although there are other DIBs in the works targeting that issue, such as a DIB to implement Kangaroo Mother Care in Cameroon. And the Utkrisht Impact Bond is the latest in a number of recent announcements of DIBs as more organizations look to test the tool as an innovative way of financing global health and international development. What sets this DIB apart is the fact that there are two implementation partners — the nongovernmental organization Population Services International and the Hindustan Latex Family Planning Promotion Trust, or HLFPPT — and the implementation partners are also co-investors, contributing more than 20 percent of the capital required.
