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Conducting a Feasibility Study for a Refugee-focused Development Impact Bond - Design Grant Case Study

Authored by Convergence

The Syrian civil war is a major driver of the current refugee crisis—the worst since World War II. With Syrians accounting for 20% of the ~60M displaced people globally, neighboring countries—including Turkey, Lebanon, Iraq, Jordan—face intense migratory pressure and tremendous difficulties offering refugees a decent living. To shift to longer-term and sustainable outcomes for refugees affected by the Syrian crisis, KOIS Invest (KOIS) intends to launch a multi-country development impact bond (DIB) to improve the welfare of Syrian refugees and vulnerable populations in neighboring host countries.

DIBs provide upfront funding for development programs by investors, who are remunerated by donors or host-country governments—and earn a return—if evidence shows that programs achieve pre-agreed social outcomes. In April 2017, KOIS completed a seven month feasibility study to explore the design of a multi-country DIB focusing on livelihood and job integration programs for Syrian refugees and vulnerable populations in several countries in the Middle East. Through the feasibility study, KOIS confirmed the suitability of select host countries, service providers and interventions, and successfully attracted interested potential investors and outcome funders.

As a result of the positive findings, KOIS will proceed to the structuring stage with a planned launch in early 2018. The feasibility study presents several insights for other practitioners conducting feasibility studies for DIBs, including:

  • A phased approach provides a clear structural roadmap, while retaining flexibility for later stages.
  • Smaller service providers typically demonstrate higher willingness to absorb the costs and risks associated with a DIB.
  • Tailoring communication by stakeholder types can help improve engagement strategies.
  • A flexible initial DIB design allows stakeholders to be actively involved in the subsequent structuring phase.
    06 Dec 17
    Case Studies
    Region Focus
    West Asia, Middle East and North Africa
    Sector Focus
    Sub-Sector Focus
    Workforce Development / Skills Training