H2O: DfID backs first-in-class development bond
April 16, 2014
The UK will launch its first ever development impact bond to improve healthcare in Africa by bringing together private and public investment, International Development Secretary Justine Greening has announced.
Ms Greening will launch the new bond to invest in the area-wide control of sleeping sickness, a fatal parasitic disease transmitted by tsetse flies in sub-Saharan Africa, while attending the Global Partnership for Effective Development Cooperation summit in Mexico.
The concept was initially developed by H2O as part of the DFID-funded Research into Use Programme and the preliminary bond design was subsequently conducted in partnership with Social Finance and the University of Edinburgh.
Development Impact Bonds:
The UK will launch its first ever development bond to invest in preventing the deadly but neglected sleeping sickness in Uganda. An estimated 9 million people are at risk in the country but despite tried and tested prevention methods, previous investments were unable to deliver the scale of drugs needed to stop the disease.
A new £1.5 million inception project, led by Social Finance and with continued support from H2O and University of Edinburgh, will research and design a bond to purchase drugs to treat infected cattle before the disease spreads. A bond has the potential to drive much more investment into developing countries. New private investment in development projects would be followed by further ‘top up’ investment by aid donors after specific results have been achieved.
Justine Greening said:
"Development bonds are a tremendous opportunity to quickly get the finance and investment needed to make development work. This is vital if we are to create the growth and jobs needed to end poverty."
Create a new market for similar development bonds:
DFID will also support the development of new bonds by bringing together investors, Governments and aid agencies to design new investments in the coming months. The UK will also set up a new online ‘open source’ knowledge platform to share our findings to inform further investment.