By Bernd Debusmann Jr
Social impact bonds are a way to finance the delivery of public services
Abu Dhabi’s Aldar will invest AED 2 million ($544,000) in ‘social contracting’ initiatives conducted by the emirate’s Authority of Social Contribution (Ma’an), it has been announced.
According to a statement from the two entities, they will work together to build a ‘social impact bond’ that will launch later this year.
Social impact bonds are a way – first introduced in the UK – to finance the delivery of public services.
They involve a government commissioner, a social service provide and a social investor.
Social contracting, for its part, is a contractual agreement which operates on a pay-for-success basis, in which payment relies on a successful social outcome.
“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,” said Ma’an director general Salama Al Ameemi.
Al Ameemi added that the partnership 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.”
Social impact bonds are now used in 40 countries around the world.
“This is a fantastic example of how the public and private sectors can work together in an innovative way to create outcome driven programmes that address matters of critical importance to our society and communities at large,” said Greg Fewer, Aldar’s chief financial and sustainability officer.
“This partnership is a clear example of how Aldar is delivering on its sustainability strategy, launched last year, to create a positive impact on our economy, community, people, and environment,” he added.