The new UBS Optimus Foundation Maternal and Newborn Health DIB is focused on improving healthcare in Rajasthan, which has one of the highest mortality rates for mothers and babies of any state in India. It will support government efforts to reduce such deaths by improving access to, and the quality of care in, up to 440 private facilities. It's expected up to 600,000 pregnant women will be reached with improved care saving thousands of lives.
Through the support of UBS clients the UBS Optimus Foundation will provide USD 3.5 million upfront funding to allow frontline Indian NGO partners Population Services International and Hindustan Latex Family Planning Promotion Trust to start work on the ground. Two socially motivated outcome payers, USAID and MSD for Mothers, have committed USD 8 million for outcome funding. If a set of independently evaluated targets are met USAID and MSD for Mothers will pay back the initial funding, which can then be recycled into future programs.
"We must be bold. We must challenge, innovate and create if we are to truly reframe the future for the millions less fortunate than ourselves. The launch of the world's first development impact bond in healthcare demonstrates how we are turning those words into actions," says Phyllis Costanza, CEO of the UBS Optimus Foundation. "The DIB model is proving increasingly attractive as people recognize its ability to secure new and much needed sources of finance and deliver significant and sustainable social returns."
Naveen Jain, Secretary for Rajasthan Ministry of Health and Mission Director of the National Health Mission sees innovative public private partnerships, and the engagement of private capital, as an essential part of the government’s strategy towards achieving the United Nations Sustainable Development Goals. These seek to stimulate action in areas of critical importance for humanity and the planet.
"We look forward to working with the Maternal and Newborn Health Development Impact Bond team and the private health facilities to enhance quality and develop the flexibility and the trust to allow services to be provided outside the public sector. In this way, impact bonds and their emphasis on results will benefit the public sector – and, of course, new mothers and their children," Jain says.
What's so special about DIBs?
DIBs are an innovative way of financing international development. They are 100% focused on outcomes and have the potential to leverage private investor capital to address some of the world's greatest challenges.
Looking ahead, to grow this space we know that acceptance of such innovative models will require acceptance by governments and bilateral donors. We need more people with the expertise in designing them, a growing set of implementers who have the right culture for delivery and risk, and clear evidence for investors that they deliver societal returns and result-based financial returns. DIBs are not a panacea, and they will not be suitable for every situation. And that is why it's important to have a suite of options available. As the market develops for such innovative vehicles we will begin to understand more about their effectiveness, but so far the signs are looking very positive. And the UBS Optimus Foundation is working on a new education DIB, which will be announced in 2018. Watch this space.
Find out more about DIBs on the UBS and Society blog: DIB – The new kid on the development block