ImpactAlpha, Oct. 6 – The Syrian conflict has forced 6.6 million people to flee the country; 80% have settled in neighboring countries. The proceeds of the development impact bond will allow the Near East Foundation UK to deliver vocational, entrepreneurship and resilience-building programs for more than 4,000 refugees and hosts and provide 3,400 business start-up grants in Jordan.
The U.S. International Development Finance Corp. and Ferd, a Norwegian family-owned holding company, provided the upfront capital.
If Near East Foundation meets its outcome targets, DFC and Ferd will receive annualized returns of about 5%, paid by the IKEA and Novo Nordisk foundations and Norway’s international development agency. In the case of failure, the same funders will reimburse 80% of the program costs.
By paying for success, “we can attract more funding to improve refugee livelihoods and encourage programmes that have the biggest impact,” said Ikea Foundation’s Per Heggenes.
Kois structured the bond, which it developed with a grant from Convergence, a global network for blended finance.