By Sam Bridge
Authority for Social Contribution will launch financial tool that raises private investment to support high-impact social programs
Abu Dhabi is to introduce the GCC’s first Social Impact Bond, a financial tool that raises private investment to support high-impact social programs, under the Authority for Social Contribution (Ma’an).
Launching next year, Social Impact Bonds will operate on a pay-for-success basis, whereby payment relies on a successful social outcome – a first for government contracts.
Social Impact Bonds have previously been used to improve foster care in the UK, reduce reoffending rates in prisoners in New York, improve early years education in Utah and reduce homelessness in Australia.
First introduced in the UK, Social Impact Bonds are now used by more than 40 countries worldwide, a statement said.
Social service providers will have the freedom to innovate and come up with a solution that delivers the social outcome. Private investors, such as high net worth Individuals or investment funds, will then invest in the Social Impact Bond and the government will pay back the investor - with interest – but only if the outcomes are achieved.
The long-term nature of Social Impact Bonds provides social service providers with the investment and commitment to get their innovative ideas off the ground, supporting the growth of the third sector, the statement added.
Ma’an will facilitate 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 different projects with the possibility to be developed into Social Impact Bonds and will soon announce a series of agreements with different government and private sector partners to progress these projects.
Salama Al Ameemi, director general of Ma’an, said: “Social Impact Bonds are a game-changer for how we think about the delivery of social programs, putting a relentless focus on specific and measurable outcomes for the people of Abu Dhabi.
“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 government, the private sector and civil society.”
Ma’an was established in February by the Department of Community Development in Abu Dhabi with the aim of bringing together the government, the private sector and civil society to support a culture of social contribution and participation.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.