The Education Outcomes Fund (EOF) and its partnership with UNICEF were highlighted as a powerful example of social impact investing in a recent interview with Ranajoy Basu and Priya Taneja of McDermott Will & Emery in Environmental Finance.
Basu and Taneja, respectively a Partner and a Counsel with the firm, have generously supported EOF with pro-bono legal advice and have a deep understanding of social impact investing.
The interview dug into the current landscape of impact bonds, discussing opportunities and challenges in the sector, and how the pandemic has shaped prospects for the industry’s growth.
Discussing what a “typical” impact bond looks like, Priya Taneja explained:
“Investors provide capital to an intermediary, whether a corporate or an NGO, which wants to make an intervention to create impact, such as educating girls by building schools in remote villages. The intermediary builds and runs the school (either directly or through third-party service providers), and the intervention and its outcomes are monitored…by an independent evaluator...Investors are paid for success by Outcome Payers.”
“If the Outcome Payer is a government body, such a transaction would tend to be called a social impact bond, but if it's a charitable or philanthropic organisation, it would be called a development impact bond. Examples include the alliance between UNICEF and the Education Outcomes Fund (EOF), aimed at delivering SDG 4, in setting up a joint structure in relation to an outcomes-based model for EOF's underlying education programmes in various jurisdictions.”
Ranajoy Basu highlighted the social impact sector’s strong growth, even during the COVID-19 pandemic:
“The coronavirus pandemic has tested the sector, but it has shown that [it] is extremely resilient, despite all of the disruption. There is a genuine drive by both the public and private sector to address some of the social interventions around the world at the moment. We only see it increasing over time. The road ahead is definitely a busy one for impact investment.”
Offering agility and transparency, social impact finance will be central to the post-pandemic recovery. EOF is proud to be working with our partners to shape the future of this critical sector.