ABU DHABI 18 November 2019: Abu Dhabi is set to introduce the GCC’s first Social Impact Bond, an innovative and internationally recognised financial tool that raises private investment to support high-impact social programmes, under the Authority for Social Contribution – Ma’an.
Launching next year, Social Impact Bonds operate on a pay-for-success basis, whereby payment relies on a successful social outcome, which is a first for government contracts.
Across the world, Social Impact Bonds have been used to improve foster care in the United Kingdom, reduce re-offending rates among prisoners in New York, improve education in the early years in Utah and reduce the number of homeless persons in Australia, said Wam.
Social service providers will have the freedom to innovate and come up with solutions that deliver the intended social outcomes. Private investors, such as high net worth Individuals or investment funds, will then invest in the Social Impact Bond, granting the service provider the upfront capital to deliver the social programme, and the government will pay back the investor, with interest, but only if the outcomes are achieved.
The Authority for Social Contribution – Ma’an will supervise the Social Impact Bonds and support the contractual arrangements between government departments in Abu Dhabi, social service providers, and third-party investors. It will also be responsible for monitoring the Social Impact Bond and measuring performance.
Ma’an is currently looking into 24 projects that might be eligible to be assisted by Social Impact Bonds. They will soon announce a series of Memorandums of Understandings with different government and private sector partners to work on these projects.
“Social Impact Bonds are a game-changer for how we think about the delivery of social programmes, putting a relentless focus on specific and measurable outcomes for the people of Abu Dhabi,” said Salama Al Ameemi, Director-General of Ma’an.
“We are proud to be leading the way in the region for introducing this internationally-recognised method of financing and delivering solutions for social challenges. Ma’an will be launching Abu Dhabi’s first Social Impact Bond next year, and we are currently working with government and private sector partners to identify potential projects that will be suitable. It is part of our wider mission to encourage the third sector to flourish in Abu Dhabi and deliver solutions to social challenges, in partnership with the government, the private sector and civil society,” Al Ameemi added.