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Following the success of Social Impact Bonds (SIBs), Development Impact Bonds (DIBs) emerged from the belief that risk-taking capital had the potential to improve innovation and efficacy in grant-dependent development programmes. They are one of the financing tools that sprung out of the UN Sustainable Development Goals (SDGs) and the realisation that traditional public donors’ resources won’t suffice to meet them.

Development Impact Bonds have been used as funding tools for development since 2015

SIBs and DIBs are tripartite financing mechanisms. Social Investors take the risk of funding a development programme upfront knowing that repayment and interest will depend on the level of success of the Delivery Partner in generating pre-agreed social outcome targets. These “outcome payments” are made by Outcome Funders.

In SIBs, Outcome Funders are mainly public agencies of the country of implementation. In DIBs, they tend to be foreign public or private donors. The quality of the model rests on a robust evaluation of the outcomes by an independent third party.


impact bonds in 35 countries worldwide


$437.3 M

total upfront capital


52 months

average capital duration



12 DIBs and seven SIBs in low and middle income countries


$3.4 M

average upfront capital investment


34 months

average contract duration


The Refugee Impact Bond at a glance

$ 9,825,000

upfront investment

4 years

duration in Jordan


max. annualised rate of return


maximum capital loss

The Refugee Impact Bond leverages the complementary resources of private and public actors


DFC and Ferd, the project’s lenders, have committed $9.8m to prefinance programme implementation. Their commitments are purely outcome-based and unconditional on the programme’s intermediary results.

Repayment will be made in one bullet payment, four years after inception. The maximum 22% total return (5.1% annualised) will depend on the programme’s success in achieving two payment metrics: business survival after ten months, and improvement in household spending on basic needs after 24 months.  

The targets for these metrics have been set higher than past results of the programme and of similar benchmark programmes. The programme design has been strengthened to increase the likelihood of achieving these targets.


Near East Foundation’s women-focused micro-enterprise training and grants programme was selected following a rigorous screening process by KOIS. In addition to the promising results of the programme’s first few years, NEF has 100+ year history of addressing vulnerability and building resilience in fragile contexts. KOIS also concluded that NEF had the ability to withstand intense investor scrutiny.

The program will be implemented by Near East Foundation UK, an entity of the Near East Foundation. NEF UK and its local partners have the flexibility to adapt programming to changing circumstances on the ground within the boundaries of some core programme components and with the sole aim of meeting the pre-agreed payment and non-payment outcome objectives.


KOIS has been retained by the Outcome Funders to monitor the programme’s progress, facilitate relationships between the parties and support the relationship with the evaluator with respect to the DIB during its lifetime.


Total funder commitments are $13.8m, including a buffer for foreign exchange and other risks.

The DIB’s Outcome Funders are IKEA Foundation and Novo Nordisk Foundation. They have committed to repay 52% of programme costs and to make outcome payments to NEF depending on the level of success of the DIB’s two payment metrics. They are also funding the DIB’s evaluation and stakeholder coordination costs.

Thanks to its commitment to repay 28% of programme costs, Norad has limited investor downside risk to 20% and improved the project’s risk profile for the Outcome Funders.


Mathematica, a U.S. independent evaluating firm, will be the DIB’s evaluator. It will assess business survival rates in relation to past success rates of the programme. The level of success of the household consumption metric will be measured through a quasi-experimental control group method.

At the same time, it will assess the impact of other outcome goals which are essential to the programme’s theory of change, along with key modules of the programme results chain. This will support learning and adaptation for NEF.

The high-level evaluation framework and payment metrics were designed during the structuring phase of the DIB.

All the DIB parties have agreed to share the final evaluation report and learnings to serve the wider community of humanitarian, livelihood, and Blended Finance funders and practitioners.

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The DIB model allows NEF the opportunity to test programme delivery when freed from activity-based annual funding cycles.

More about the programme


sustainable micro-enterprises to be created


Expected increase in household consumption



Looking ahead

The DIB framework and programme design are ready to be leveraged for Lebanon, as additional outcome and investor commitments are found.

+ 3,000


~ 30 to 50%

refugees and host community members

Urban areas

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