Convergence Design Funding award aims to mobilize new sources of financing to achieve the Sustainable Development Goals and catalyze the next generation of blended finance instruments
TORONTO, ON, CA – Convergence, the first and only platform exclusively focused on blended finance, announced that it will award one of its inaugural design funding grants to Palladium for the design of an impact bond to fund maternal and newborn health (MNH) interventions in Rajasthan, India to reduce maternal and newborn mortality. Convergence is awarding design grants in an effort to surface the next generation of blended finance models and foster market-wide learning to drive the field forward. Convergence will award a minimum of CAD 10M in design grants over the next five years. This initial funding is provided by the Government of Canada.
Palladium will use the Convergence proof of concept funding to complete the design of a USD 35M, five-year impact bond that will fund a number of MNH interventions in the state of Rajasthan, India, where maternal and newborn mortality is a critical challenge.
Peter Vanderwal, Palladium’s lead on the work commented, “When fully implemented, the Rajasthan MNH impact bond is expected to be one of the largest impact bonds in an emerging market, and its successful rollout will play a crucial role in establishing the viability of impact bonds in development finance. To date, two international outcome funders and a lead investor have committed to the impact bond. What makes this design so different – and so important in this market – is that all actors, including the Government of Rajasthan, have agreed from the outset to move from an initial-phase three-year impact bond where the outcomes are paid for by international agencies, to a second-phase two-year impact bond for which a second tranche of funding will be raised and the government will purchase the outcomes.”
“Convergence’s Design Funding will not only enable us to address difficult design questions in blended finance and finalize the terms of the structure, but will also ensure other practitioners learn from our experience,” said Kim Bredhauer, Palladium’s Global CEO.
Convergence is an independent institution that helps public, philanthropic, and private investors find and connect with each other to co-invest in blended finance deals in emerging markets. Convergence offers grant funding for practitioners to design innovative blended finance instruments that address a key development need but would otherwise be too risky or complex to pursue. To share what grantees have learned through their design process, Convergence has partnered with the Bertha Centre for Social Innovation and Entrepreneurship, a specialized unit within the University of Cape Town's Graduate School of Business. The Bertha Centre will create learning briefs that outline key decisions and outcomes from the design processes, ensuring practitioners considering similar instruments have access to design best practices.
“Impact bonds represent a bold new approach to development finance, but they have struggled to take off in emerging markets. Through our Design Funding, Convergence hopes to support bold ideas like the Rajasthan MNH impact bond, which could very well demonstrate the potential of impact bonds to achieve scale,” said Joan Larrea, CEO of Convergence.
The Honourable Marie-Claude Bibeau, Canada’s Minister of International Development and La Francophonie, commented, “Supporting innovative approaches to financing international development is a priority for our government. Through Convergence projects we will be able to increase women’s access to much-needed maternal health services in rural India.”
Convergence accepts Design Funding applications on a continuous basis, and reviews applications every quarter. To be considered for the next review cycle, practitioners must submit their applications by August 31, 2016. Visit www.convergence.finance/design-funding to learn more.
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ABOUT CONVERGENCE: Convergence is a platform that connects and supports private, public, and philanthropic investors for blended finance deals in emerging and frontier markets. Visit www.convergence.finance to learn more.
ABOUT PALLADIUM: Palladium is a global leader in the development and delivery of Positive Impact – the point where social, environmental, and economic goals are inextricably linked – that works with governments, corporations, civil society, and non-profits to deliver solutions that transform lives and create enduring value for businesses, communities, societies, and economies. Visit www.thepalladiumgroup.com to learn more.