Press Release: World’s First $10 Million Sanitation Development Impact Bond Launches
Thursday, November 21, 2019
A groundbreaking initiative to bring safe sanitation to some of the poorest and most vulnerable households in Cambodia launches today. The Cambodia Rural Sanitation DIB is the world’s first Development Impact Bond for sanitation and aims to eradicate the high rates of open defecation in the country and accelerate the Cambodian government’s efforts to reach universal sanitation.
The DIB aims to develop market-based solutions that will contribute to universal sanitation coverage in six provinces (Svay Rieng, Kandal, Prey Veng, Kampong Thom, Siem Reap and Oddar Meanchey)—reducing stunting among children and, preventing the spread of disease and contamination of drinking water. This supports the Cambodian government’s aim of eliminating open defecation by 2025—five years ahead of the Sustainable Development Goals target of 2030.
The Stone Family Foundation will provide the upfront investment required to achieve sanitation outcomes, which will be delivered through the third phase of iDE’s Sanitation Marketing Scale Up program. USAID will provide up to $10m in outcomes funding to the Stone Family Foundation, but only where results (open defecation-free villages) are achieved. The DIB model will allow iDE and the Stone Family Foundation to learn, adjust, and innovate in order to achieve the goal of 1,600 open defecation free villages while reaching the most vulnerable households.
The principle of supporting local markets to deliver products and services that local communities value is key to the program. It is in line with USAID’s focus on achieving greater development outcomes by building local sustainability so that foreign assistance is no longer necessary.
Veena Reddy, Mission Director at USAID Cambodia, said:“This new results-based financing approach to improving rural sanitation demonstrates our commitment to supporting Cambodia on its road to self-reliance. This DIB is USAID’s third and an example of our leadership in collaboration and co-design between partners and global innovative financing to achieve the best possible development results.”
As well as being the first impact bond specifically focused on a Water, Sanitation, and Hygiene goal, the impact bond went from initial design to launch in a relatively short time period of nine months.
David Hutchison, CEO of Social Finance, said:“The rapid development of this impact bond was enabled by the aligned priorities and commitment of the partners. It’s a great example of how focusing on outcomes allows different development partners to collaborate in a mutually beneficial way, playing to organizational strengths to deliver high impact programs with a clear end-goal.”
Photo courtesy of aaron gilson.