#ICYMI Weekly Roundup: Financing of Aid in Conflict September 8, 2017

humanitarian impact bond

The ICRC has created the world's first "Humanitarian Impact Bond" to help transform the way vital services for people with disabilities are financed in conflict-hit countries. The capital raised – 26 million CHF or approximately $27.5 million USD– will be used to build and run three new physical rehabilitation centres in Africa (Nigeria, Mali and Democratic Republic of Congo) over a five year period, providing services for thousands of people. The payment-by-results program also includes the necessary training for the new staff as well as the testing and implementation of new efficiency initiatives.

The innovative funding mechanism has been created to encourage social investment from the private sector. A rising number of conflicts as well as a growing annual budget of the ICRC are the driving forces behind the bond. See more from ICRC on humanitarian impact bond here

In this week’s roundup, we take a look at this innovative model of funding, as portrayed by the media and other online outlets.**


Red Cross links investors to war zones with first 'humanitarian bond' (Reuters)

Inna Lazareva writes a new funding model launched by the Red Cross aims to attract private capital to conflict zones to help some of the world’s neediest people, while giving investors a return on their money.

Red Cross launches “humanitarian impact bond” (Financial Times)

Kate Allen writes disabled people in conflict-hit sub-Saharan Africa are not the most obvious source of yield for bond investors. But the International Committee of the Red Cross is seeking to change that. The disaster recovery agency has launched what it says is the world’s first “humanitarian impact bond”, in which private investors lend it €22m of five-year funding and their repayments depend on what difference the project makes to its clients’ lives.
 

ICRC sets up first 'humanitarian impact bond', worth £21m (Third Sector)

Liam Kay reports that in a programme run on a payment-by-results basis, the charity will help to build and run physical rehabilitation centres in three African countries. The International Committee of the Red Cross has set up what it says is the world’s first "humanitarian impact bond", which is expected to be worth about £21m. The new bond, which will help to build and run three physical rehabilitation centres in Nigeria, Mali and the Democratic Republic of the Congo, has the UK government as one of five "outcome funders" that will pay the ICRC if the scheme performs.

A new bond taps private money for aid projects in war zones (The Economist)

The Economist reports investors might be expected to run a mile from a deal on offer in a conflict-torn part of Africa. At best, it will pay an annual return of 7%; at worst, 40% of the original investment is lost. But a dozen social investors have pooled SFr26m ($27m) to finance the world’s first “humanitarian impact bond”, issued by the International Committee of the Red Cross (ICRC). It will pay for three rehabilitation centres to be built and run in the Democratic Republic of Congo, Mali and Nigeria. The ICRC’s obligations are backed by “outcome funders”, ie, donors, mostly governments. The bond is an example of “impact investing”, in which private investors seek out social and financial returns, and of “blended finance”, in which public funds help them to do so. Variants have included a bond aimed at educating girls in India and a World Bank-led initiative to raise money to respond to pandemics. The novelty in the ICRC’s bond is that the money raised will be used in conflict zones.

ICRC launches world's first Humanitarian Impact Bond (Devex)

Burton Bollag writes the International Committee of the Red Cross announced the launch of the world’s first Humanitarian Impact Bond on Friday, aiming to raise 26 million Swiss francs ($27.3 million) to build and operate three physical rehabilitation centers in conflict-affected parts of Africa over the next five years. While social impact bonds and development impact bonds have been around since 2010 and 2015, respectively — providing a new way to finance social services and development projects — ICRC’s scheme is a first for the humanitarian sector.


Are you a writer, videographer, photographer or blogger publishing interesting stuff linked to armed conflict, international humanitarian law (a.k.a. the law of armed conflict), innovation, compassion, history, etc. that you think deserves a shout-out here? Send us a link and we might feature your content next week. Write to: nclark (at) icrc (dot) org.

**The usual Intercross disclaimer: Just because something is featured here, doesn't mean we endorse or agree with it, and the views expressed on the platforms we're highlighting don't necessarily represent those of the ICRC. **