Greening outlines details of first UK development impact bond

16 Apr 14

The UK is set to spend £1.5m on research and design for a development impact bond to tackle the spread of sleeping sickness in Uganda, the International Development Secretary Justine Greening announced today

By Judith Ugwumadu | 16 April 2014

Greening said this would be the UK’s first development impact and would bring together both public and private investment.

‘Development bonds are a tremendous opportunity to quickly get the finance and investment needed to make development work. This is vital if we are to create the growth and jobs needed to end poverty,’ she said.

‘We are determined to innovate and make our aid more efficient. It is right that donors like Britain ensure new private investment benefits the poorest and boosts growth in frontier economies.’

According to the UK Department for International Development, 9 million Ugandans are at risk of contracting sleeping sickness, a parasitic disease of people and animals. Previous have been unable to deliver the scale of drugs needed to stop the disease.

DFID’s £1.5m inception project will develop a bond that can be used to purchase drugs to treat infected cattle before the disease spreads. Bonds have the potential to drive much more investment into developing countries, the department said. Initial private investment is followed by further ‘top up’ investments by aid donors once specific targets have been reached.

‘We must agree a new partnership between emerging nations, aid donors and private investors to make sure every penny spent on development has the greatest possible impact,’ said Greening.

Also a new online ‘open source’ knowledge platform to share DFID’s findings to inform governments and aid donors of further investment would be launched in the coming months, DFID said.

She added that DFIF would also launch a new ‘roadmap’ for increasing further private investment into frontier developing economies. Development cooperation hubs in Nigeria, Mozambique and Kenya would bring together governments, aid agencies and businesses on the ground, the minister said.