More on DIBs today as the SIB message reverberates around the world.

‘Testing The Waters’ On DIBs
Adva Saldinger – devex

Girls’ education in India, malaria in Mozambique, African sleeping sickness in Uganda — all are development challenges that will likely be the test cases for a new financing model known as development impact bonds.

Modeled after social impact bonds, DIBs can help leverage private capital to tackle development challenges: Investors put up the money to fund a development project, a service provider or implementer carries out an intervention to tackle a project, and then an outcome payer or group of payers (in this case development finance institutions or donor agencies) pays for the success of the intervention.

Under this pay-for-success model, the outcome payer disburses a return on the initial investment at a rate determined by the progress made in addressing the development challenge.

But while DIBs have been generating quite a buzz, the model has yet to be tested or proven.