The first tranche of a new Development Impact Bond (DIB) for refugees in Jordan and Lebanon was launched today by the IKEA Foundation, Novo Nordisk Foundation, Norad, the U.S. Development Finance Corporation (DFC), Ferd, and KOIS. This will fund a micro-enterprise creation program, delivered by the Near East Foundation (NEF), to help refugees and vulnerable host communities recover their livelihoods and build their resilience.
Convergence awarded KOIS design stage grant funding through our Global Emerging Markets Design Funding Window, funded by the Canadian Government, to conduct a feasibility study and subsequently structure, fundraise and launch the Refugee Impact Bond.
“We supported KOIS and the Refugee Impact Bond because it’s a bold idea that attempts to address one of the most urgent needs of refugees: gainful employment. This impact bond can demonstrate the viability of a mode of humanitarian financing in addition to traditional aid that can pave the way for funding such programs sustainably” says Adhiti Gupta, Associate Director, Market Acceleration and Design Funding.
DFC and Ferd will provide a four-year results-based risk investment to fund a vocational, entrepreneurship and resilience-building program. This will support 4,400 refugee and host population trainees and provide 3,400 business start-up grants in Jordan. Communities with large refugee populations will be selected based on higher than national average rates of food insecurity, poverty, indebtedness, and unemployment. Women and youth, who are disproportionately impacted by crises, will take priority.
In case of failure to achieve these results, the IKEA Foundation, Novo Nordisk Foundation and Norad will support 80% of program costs. NEF and its local delivery partners will have the flexibility to adapt programming and innovate to achieve the desired results. NEF is further incentivized through a performance bonus.
The second tranche of the DIB, focused on Lebanon, is expected to launch in the near future.
About Convergence’s Design Funding Program
The Design Funding program offers a unique market acceleration opportunity for practitioners to secure feasibility study and proof of concept stage design funding to develop and launch catalytic blended finance vehicles that aim to attract private capital to sustainable development at scale.
Convergence currently has two open Design Funding Windows, the Indo-Pacific Window for solutions targeting gender AND/OR climate in the Indo-Pacific Region, and the Asia Natural Capital Window for solutions focused on natural capital in Asia. Please visit Convergence’s Design Funding page for submission deadlines.
Convergence also acts as the sole independent evaluator to the United Nations Joint SDG Fund for operationalizing the Call on SDG Financing Component 2: Catalyzing Strategic Investments. So far $41M has been awarded in funding to UN country teams to design financial structures to catalyze additional investment for the SDGs, based on Convergence recommendations.