Large amounts of private sector financing is needed to bridge the development gap.
The basic structure of a SIB is like any other bond.
Many investors today are committed to socially responsible investing, and SIBs offer them the opportunity to make an impact.
SIBs can be successful if they are structured like bonds, and not just customized contracts negotiated on a bilateral basis.
SIBs for the future
The last decade has seen a surge in investor interest for impact investing.
Investors still don’t want to compromise on their financial returns, but they are focused on impact. SIBs push that a step further with investors fully vested in the outcome of the project, and that is a good thing.
By promoting greater oversight and collective ownership, and with the necessary changes in structure, SIBs can lead to better outcomes and a better society for us all.
Source: blogs.Worldbank.org/voices/five-ways-social-impact-bonds-live-their-potential