TORONTO, 12 October 2017 – Convergence announced it will award a Design Funding grant to Kois Invest 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.
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.
Convergence’s activity in the impact bond space includes a recently launched landmark report with the Brookings Institution summarizing early learnings from impact bonds in developing countries. In 2016, Convergence also provided a grant to Palladium to structure and launch the Rajasthan Maternal and Child Health Impact Bond. Convergence believes impact bonds can be an important tool to increase the efficacy of development funding by incentivizing the achievement of results, while ensuring scarce development funding is only deployed to interventions that work.
“KOIS Invest co-structured with the International Committee of the Red Cross the recently launched Humanitarian Impact Bond. It is one of the largest impact bonds ever, and the first to include multi-country operations and several outcome funders. We will leverage this experience to structure a multi-country refugee-focused impact bond that provides much needed long-term and flexible funding for employment integration and entrepreneurship development programs in Jordan, Lebanon and Turkey,” said François De Borchgrave, Managing Partner of KOIS Invest.
Kois Invest has received strong support to-date. A private foundation has committed to co-fund the design and launch costs with Convergence, and many investors and outcome funders have expressed strong interest in participating in the impact bond. 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.
“We are excited to partner with Kois Invest again to structure and launch the impact bond. This impact bond meets one of the most urgent needs coming out of the ongoing refugee crisis: gainful employment for displaced people. Currently, livelihood and job intervention programs for Syrian refugees have only received USD 30 million of funding, while an estimated USD 460 million is needed. This impact bond can demonstrate the viability of funding these programs sustainably and pave the way for similar structures in the future,” said Joan Larrea, CEO of Convergence.
Convergence Design Funding grants support the design of catalytic blended finance vehicles that attract private capital to global development. At the same time, lessons learned from grantees inspire market-wide learning. Convergence’s initial funding is provided by the Government of Canada. Grants have already been awarded to vehicles in a diverse range of sectors and regions, including the design of financing facilities for clean energy and smallholder livelihood projects in Indonesia and a blue bond for conservation activities in Small Island Developing States. Convergence’s funding will enable Kois Invest to complete the design work required to launch the impact bond.
ABOUT CONVERGENCE Convergence is an independent institution that connects, educates, and supports investors to execute blended finance transactions that increase private sector investment in emerging markets. Convergence offers feasibility study and proof of concept grant funding for practitioners to design catalytic blended finance vehicles that aim to attract private capital to global development at scale. To share what grantees have learned through their design process, Convergence, in partnership with the Bertha Centre for Social Innovation and Entrepreneurship at the University of Cape Town's Graduate School of Business, will create learning briefs that outline key decisions and outcomes from the design processes to ensure practitioners considering similar instruments have access to design best practices.
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 November 30, 2017. Learn more.
ABOUT KOIS INVEST KOIS Invest is a leading international impact investing company specialized in asset management and innovative finance advisory services. Its mission is to develop solutions to key social and environmental issues, with the potential to generate lasting positive societal impacts while delivering attractive financial returns. KOIS Invest structures a range of impact investing funds and innovative finance instruments, such as impact bonds. It has pioneered solutions for themes ranging from physical rehabilitation in post-conflict countries to social housing and employment generation for fragile communities in Europe, and recently co-structured the first multi-country Humanitarian Impact Bond with the International Committee of the Red Cross. Currently, KOIS Invest is structuring a host of innovative finance instruments to support initiatives, such as menstrual hygiene management in India and childcare protection in Europe. The firm is headquartered in Brussels with offices in London, Paris and Mumbai. Learn more.