Design of a Development Impact Bond to Fund Employment Interventions For Syrian Refugees in Jordan, Turkey, and Lebanon

Design of a Development Impact Bond to Fund Employment Interventions For Syrian Refugees in Jordan, Turkey, and Lebanon

Overview: Kois Invest was awarded a proof of concept grant in 2017 Q2. Kois Invest will use the Convergence Design Funding to structure and launch an impact bond to support organizations providing employment integration and entrepreneurship development programs to Syrian refugees and vulnerable local populations in Jordan, Turkey, and Lebanon. Syrian refugees account for 20% of the approximately 60 million displaced people globally, with neighboring countries facing intense migratory pressure and difficulty offering refugees a decent living. This follow-on funding builds on the feasibility study grant Convergence awarded to Kois Invest in 2016. Key learnings from the feasibility study have been in summarized in a case study.

Kois Invest will raise between USD 10-30 million for the impact bond from socially-motivated investors. This capital will be distributed to 2-6 organizations to provide skills training and entrepreneurship support for Syrian refugees and vulnerable populations over 2-3 years. If the organizations achieve predetermined results – for example, students secure well-paid employment with strong benefits – investors will be repaid their capital plus a return from outcome funders like foundations and aid agencies.

Design question and learning potential for the market: How can a development impact bond be structured and easily implemented across multiple countries?

As few development impact bonds have been implemented in developing country contexts, Kois Invest’s design activities will help develop a better understanding of best practices on all aspects of instrument design, which other practitioners will be able to leverage as well (e.g., structuring payment metrics, fundraising from outcome funders and investors, coordinating and monitoring service provider activity, structuring and determining the governance of the legal entity). The anticipated structure will be the first multi-country development impact bond that provides long-term financing for development programs that have demand-driven strategies to providing job market integration support for refugees. The final design will demonstrate the pre-conditions required and ideal structure to finance multiple service providers in multiple countries.