SDG Fund reaches US$100m target

A pioneering fund supporting frontline education and healthcare across Africa and Asia has reached its investment target of US$100 million thanks to a new commitment of US$18m from the European Investment Bank (EIB), which was announced at the 4th UN International Conference on Financing for Development (FFD4) in Seville.

The SDG Outcomes Fund, a blended finance fund created by the UBS Optimus Foundation and Bridges Outcomes Partnership (BOP), incentivises measurable progress toward the UN’s Sustainable Development Goals (SDGs).

The funding boost comes as global donors scale back their aid programmes amid domestic political and economic headwinds, putting hard-fought development gains at risk.

Since its launch in 2021, the SDG Outcomes Fund has: supported more than 50,000 schools in India and 100,000 children in Sierra Leone and Ghana; provided IT upskilling and employment opportunities for 800+ long term unemployed young adults in Türkiye; collected 3,000 tons of plastic waste for recycling in Nigeria; and delivered 1.5million sexual and reproductive health services to teenage girls in Kenya.

Read more: changing health outcomes in Kenya

One in six adolescent girls in Kenya has experienced pregnancy and adolescent girls and young women account for 78 percent of new HIV infections among 15–24-year-olds.

The Kenya Health Outcomes Partnership (KHOP) was created to tackle these challenges. It is a collaboration between SDG Outcomes Fund, the United Nations Population Fund (UNFPA), the Government of Kenya, the Children’s Investment Fund Foundation (CIFF), and local nonprofit delivery organisation Tiko.

KHOP is designed to tackle the main barriers preventing girls from accessing sexual and reproductive health services, which are: affordability, lack of information and distance to health facilities.

Tiko operates a digital platform in 10 Kenyan counties which connects girls, particularly those living in underserved communities and multidimensional poverty, to local public and private service providers, delivering sexual health and HIV-related services free of charge.

Girls can receive ‘Tiko miles’ for services delivered, which they can then redeeming these in local stores in exchange for products (e.g. sanitary pads).

By monitoring the types of services and facilities used by girls, whether they return for repeat services, and the ratings they provide, Tiko is able to understand where and how to target its support. It also means that payments are only made when proven impact has been achieved, incentivising activity towards delivering meaningful outcomes.

UBS Optimus Foundation committed US$20m to the fund, thanks to a portfolio of donors for the philanthropic share class. Other investors include the European investment bank , the US International Development Finance Corporation (DFC), the British International Investment (BII),as well as Dubai-based Legatum, the Singaporean Tsao Family Office, and Norway’s Ferd. The Fund is managed by Bridges Outcomes Partnerships (BOP), a nonprofit social enterprise that coordinates the local delivery partners.

Project by project, if the frontline organisations contracted by the Fund meet their targets, the Fund is paid – the agreed price per outcomes for the results achieved. The Fund investors only receive distributions from the fund when results are achieved

Outcomes payments are made by the so-called outcome funders. These funders vary project by project and are provided by (local) governments, donors or corporates. If targets are not met, then payments -by outcome funders- are not made, which means the investors contribution is at risk. .

The SDG Outcomes fund is the first vehicle of its kind to invest in outcomes-based financing programs in low- and middle-income countries, and it has already delivered US13.5m in payments for social and environmental outcomes.

“The SDG Outcomes Fund is a ground-breaking initiative that shows how different forms of capital can come together to deliver outcomes for people who need it most,” explained Tom Hall, global head of Social Impact and Philanthropy and CEO, UBS Optimus Foundation Network

“Reaching the $100m milestone demonstrates the powerful potential of outcomes-based funding programmes and their role in shaping future impact investment models,” he added.

Mila Lukic OBE, CEO of Bridges Outcomes Partnerships, added: “The results achieved by the SDG Outcomes Fund already show that by bringing together a range of partners, and critically, by learning from the data about what works best and adjusting our programmes accordingly, we can achieve better outcomes for individuals and better value for our funders. - PA