Lily Han writes in the Guardian today about Dalberg’s malaria development impact bond in Mozambique. This article, along with other articles that have been published about the project, provides interesting information about the project’s design.
Social goal: “Reduce malaria prevalence in the targeted areas by up to 75%”
Intervention: The program plans to cover 90% of the population at-risk with long-lasting insecticide-treated nets and 85% with indoor residual spraying in the targeted areas.
Duration: It looks like disbursements will occur over 12 years and the intervention will take place over 10 years. This program duration would make it one of the longest SIB or DIB programs to date.
Location: Maputo province of Mozambique.
Size: 8 million beneficiaries, but no information on the size of the investment or the outcome payment.
Interest: 5% return if the program is successful, and -50% return if the program is unsuccessful, but no information on indicators of success. Elsewhere, Devex writes that investors get the 5% return if incidence rates fall by 30%+ by year 3. This return is in-line with returns of other SIBs and DIBs. The $27-million Massachusetts SIB, for example, offered Goldman Sachs, its main investor, a 5% return. However, these returns numbers are not adjusted for risk, so actual return is difficult to quantify using publicly available information.
Outcome payers: I am still unclear on who will invest into the program and who will pay for outcomes, but participants include the Mozambique government, Anglo American, the Coca Cola Foundation, and Nando’s Peri Peri.
Structure: The Bond Against Malaria Mozambique (BAMM) Operating Company will be established to oversee the program.
Sources
http://insideoutpaper.org/impact-bonds-in-africa/
Michael Belinsky 