Switzerland to participate in the first impact investment in the humanitarian sector

Press release, 08.09.2017

The ICRC, with the support of Switzerland and other donor countries, is today launching an innovative model for financing humanitarian aid. The Programme for Humanitarian Impact Investments (PHII) is inspired by the concept of social impact bonds. This is a novel approach in the humanitarian field, with private investment helping to bring physical rehabilitation services to more people in need of such care. The PHII offers the ICRC a means to diversify and grow its funding base while limiting the financial risk incurred by public donors.

As the magnitude of humanitarian crises continues to rise, more than 120 million people worldwide are currently dependent on aid. There is a vast list of needs but only limited resources available to address them. The shortfall is particularly acute in regard to physical rehabilitation. Of the 90 million people with physical disabilities around the world who need a mobility device, only one in 10 can access physical rehabilitation services. Switzerland is therefore supporting this innovative approach by the International Committee of the Red Cross (ICRC). As an alternative funding model, the PHII seeks to improve the care available to physical rehabilitation patients.

The ICRC will draw on the PHII to build three new physical rehabilitation centres and improve the quality of services available. These new facilities will be opened in Nigeria, Mali and the Democratic Republic of the Congo, three countries with very little access to such services. The PHII was thus launched in response to this care gap, with the initial funding secured through private investors.

At the end of the pilot phase in 2022, the public-sector donors will remunerate the ICRC on the basis of the outcomes achieved. Through its participation in the PHII, Switzerland has pledged a performance-related contribution of up to CHF 10 million to support the ICRC. The actual amount depends on the objectives met by the ICRC, thereby limiting the financial risk for Switzerland. In the second stage of the project, the ICRC will refund the private investors – in part, in full or with a bonus, depending on results. An independent auditor will be brought in to determine the project's success.

In addition to Switzerland, the pilot scheme is also receiving financial backing from Belgium, Italy, the UK and the Spanish foundation La Caixa. The potential of this project to serve as a proof of concept is another focal point: Switzerland regards it as a long-term objective for introducing more such initiatives in the humanitarian sector. Cooperation with the private sector can therefore help to address more of the needs facing the humanitarian community.

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