Investing for Development series: Innovative Finance Deep Dive - Key Mechanism of Outcome Based Finance

This meet-up took place on 3 June 2021 and is the second of a series of EVPA events on Investing for Development.

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• Peter Nicholas on "Impact Bonds and Results Based Finance"
• Bjoern Strüwer and Peter Beez on "Impact Linked Finance"
• Maximilian Martin on "Humanitarian Impact Bonds"
• Anja König on "Outcome Based Finance"

Watch the recording

Please note that we did not record the rich breakout rooms where EVPA members dug deeper into both the presentations and the key elements of these tools.

What is this webinar about?

The need for innovative finance mechanism is evident in view of the challenges and the significant financing gap that is needed to meet the SDG in both developing and developed countries. Mobilising additional finance and deploying capital more effectively and efficiently requires inter alea the deployment of innovative financing solutions.

As a follow up on the first EVPA Investing for Development E-Talk on Innovative Finance on 12 May we will provide our members with the opportunity to dive deeper into selected innovative finance mechanism and concepts and learn directly from leading practitioners and peers. We will zoom into outcome based finance as one of the most promising fields of innovative finance, introduce the main ideas and focus on three variations of outcome based finance mechanism, namely:

Development Impact Bonds (DIB): Similar to Social Impact Bonds, DIB create contractual agreements between private investors and donors or governments who have agreed upon a shared development goal. Investors advance funds with financial returns linked to verified development goals. We will discuss lessons from the earlier years, look at recent developments and the details that are needed to make them effective and efficient (more details here).

Humanitarian Impact Bond (HIB): The first HIB model, the "Programme for Humanitarian Impact Investment (PHII)", is based on the impact bond concept but has been adapted to the specific needs in humanitarian aid and structured as a private debt transaction. (more details here).

Impact Linked Finance (ILF): Impact-Linked Finance refers to linking financial rewards for market-based organizations to the achievements of positive social outcomes. It is a highly effective way of aligning positive impact with economic viability and lies at the intersection between Blended Finance, Impact Investing, and Results-Based Finance. (more details here)

During the first part of the Deep Dive the lead practitioners will explain recent developments, underlying concepts and mechanism for each of the above variations. During the second part participants will break out into smaller groups to allow for more detailed information and questions on each of the mechanism , peer exchange and networking. The total time provided for this Deep Dive is 150 minutes.

Note: that this is a member-only offer and the number of participants will be limited to allow for in-depth engagement. While these mechanism have been mostly developed and applied in a development context, we encourage our members with focus on European geographies to participate given the relevance of these mechanism for the European context.

For more information about this event, questions about EVPA membership or if you would like to be involved in future Investing for development events please contact us at membership(at)evpa.ngo