KOIS Invest designs the world’s first Humanitarian Impact Bond for the International Committee of the Red Cross

Brussels, 11 September, 2017 -- The world’s first humanitarian impact bond (HIB), issued by the International Committee of the Red Cross (ICRC) and designed by KOIS Invest, was publicly announced on September 6, 2017. The Programme for Humanitarian Impact Investment (PHII) has secured private funding to build rehabilitation centres supporting people with physical disabilities in three post-conflict countries in Africa. It is the first application of an impact bond mechanism to the humanitarian space and to the underserved field of physical rehabilitation. This is a landmark transaction that will hopefully drive further private sector investments towards underfunded humanitarian and developmental issues. As one of the largest Impact bonds ever launched, it is also the first multi-country operations impact bond, and the first one to unite several European countries as outcome funders.

The CHF 26 million (USD 27 million) financial instrument will make funds available for the construction of three innovative physical rehabilitation centres in the Democratic Republic of Congo, Mali and Nigeria, the training of local physical rehabilitation staff, as well as for the first two years of operations of the centres. The structure is based on a “pay-for-success” mechanism where (i) investors (Munich Re and clients of Lombard Odier) provide upfront capital to finance the programme, and (ii) outcome funders (the governments of Belgium, Switzerland, Italy and the UK, as well as La Caixa Foundation) will pay back investors with a financial return (up to 7%) if the programme outperforms pre-agreed objectives. The success rate will be measured according to the number of people having (re)gained mobility per local rehabilitation professional working in the centres at the end of the impact bond’s five-year lifespan. The PHII allows for donors and investors to do what they respectively do best: donors pay for what they value - i.e., outcomes - and investors bear risks and price them accordingly, while lending to a humanitarian programme.

“For many years now the ICRC has been looking for new funding from governments that do not yet provide support to the ICRC, private sources, and innovative funding arrangements. This is an important learning experience for us. If it works, it will be a stepping stone to larger projects”, said Tobias Epprecht, Senior Manager at the ICRC.

“The challenge was to develop a product that would make investors comfortable with the idea to invest in a very volatile and fragile context: post-conflict zones. And at the same time the programme would have to present such an ambitious leap in service to the beneficiaries that governments would be more comfortable to participate in a scheme where they pay a premium only in case of success”, declared François de Borchgrave, Co-Founder and Managing Partner at KOIS Invest.

“Launching this first impact bond in the humanitarian space required great leadership and change in mind-set within the ICRC. Moving from a donor-driven model to one based on efficiency gains, forward planning and pay-for-success is a leap that will hopefully bring new sources of funding to cater to the world’s humanitarian needs”, commented Charles-Antoine Janssen, Co-Founder and Managing Partner at KOIS Invest.

The PHII balances risk protection for donor governments and rewards for the investors, while encouraging innovation for the ICRC to deliver services to people in need at an unprecedented efficiency level. If successful, every year thousands with disabilities will be supported by the centres, which are scheduled to be operational within the next three years.

KOIS Invest is a leading international impact investing organization specialized in asset management and innovative financial advisory services.
KOIS Invest’s mission is to develop solutions to key social and environmental issues that have the potential to generate lasting positive societal impact and deliver attractive financial returns.

KOIS Invest has previously structured impact bonds on employment generation for fragile communities in Europe and is currently structuring a host of impact bonds focused on themes ranging from refugee employment in the Middle East to childcare protection in Europe.

The firm is headquartered in Brussels with offices in London, Mumbai and Paris.

Learn more at https://www.koisinvest.com/

Damon van der Linde, External Relations Associate
Damon@koisinvest.com
+3225343676
Rue de Livourne 41 Livornostraat, B-1050, Brussels, Belgium

Danielle Cohen Henriquez, External Relations Manager
Danielle@koisinvest.com
+32466231380

Serena Guarnaschelli, Partner, Head of Innovative Finance
Serena@koisinvest.com

This release was published on openPR.