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BII and DFC Invest in SDG Outcomes Fund

Staff writer
July 24, 2023, 2:23 p.m.
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British International Investment (BII), the UK’s development finance institution (DFI) and impact investor, has announced a $10m commitment to the SDG Outcomes Fund as an anchor investor alongside the US International Development Finance Corporation (DFC).

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British International Investment (BII), the UK’s development finance institution (DFI) and impact investor, has announced a $10m commitment to the SDG Outcomes Fund as an anchor investor alongside the US International Development Finance Corporation (DFC).

Both DFIs will support the first fund dedicated to development impact bonds in lower and middle-income countries globally including Africa and South Asia.

Sara Taylor, Director and Head of PE Funds and Co-Investments at BII, said: “We are very excited to be working alongside high calibre partners and scaling an innovative and flexible financial mechanism that centres on delivering impact. The first projects in West Africa are well-aligned with our mission to provide patient capital to create productive, sustainable and inclusive economies and mobilise private investment capital to support communities in Africa and South Asia that are a priority for BII.”

Set up as a partnership with UBS Optimus Foundation as lead investor and Bridges Outcomes Partnerships, a specialist not-for-profit entity, as fund manager, the Fund uses an innovative blended finance structure to invest in impact bonds and similar outcomes-based contracts that support the UN Sustainable Development Goals.

The Fund targets essential healthcare, education, employment, child protection and environmental outcomes aimed at improving the lives and livelihoods of some of the world’s most vulnerable populations.

SDG Outcomes has made initial investments in West Africa, providing upfront capital to initiate and deliver education and environmental services.

Through the SDG Outcomes Fund, impact investors fund the up-front costs of delivering these services.

The commissioners of the programmes, which can include a government or NGO, commit to repaying this capital only if certain social and/or environmental outcomes are achieved.

This approach offers multiple benefits that result in better service delivery and greater impact. 

Mila Lukic, CEO of Bridges Outcomes Partnerships said: “We’re hugely excited by the potential of SDG Outcomes to improve lives at scale and, over time, to transform the way in which development projects are designed and delivered. Around 600 million young people globally lack numeracy and literacy skills; millions more are suffering from the effects of plastics pollution. We are pleased that SDG Outcomes’ first projects are helping to address these challenges through innovative, outcomes-based partnerships.”

Maya Ziswiler, CEO of the UBS Optimus Foundation, added: ”The SDG Outcomes initiative is one of the first of its kind to provide the scale so desperately needed to provide real impact. By creating an investible solution, we can help our clients and partners to mobilise all forms of capital – from philanthropic, through to public and private investors motivated by both financial and non-financial returns on their investments. We are excited to be bringing this landmark initiative to market.” 

 

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