Project: Digital Skills Outcomes Fund
State of development: Current
Stage of development: Final negotiations
Stage notes: The project has been mobilizing for over 20 months and is in a highly mobilized state between private sector and government
Type of instrument — Impact Bond: No; Outcomes Fund: Yes; Social Impact Incentives (SIINC): No; Social Impact Guarantee: No; Payment-by-results (no pre-financing): No; Technical Assistance and Market-building program: No; Other: 
Part of a larger outcomes-based financing program: Yes We are market building together with government and the private sector to scale the pipeline of digital skills. This includes redirecting public, private and donor funding to achieve the scale objectives of the entire country.
Expected launch date: Q4 - 2022
Total expected project development time: 0-6 months
Expected length of project (years): 3
Rationale for using outcome-based finance: Digital Jobs is one of the only areas in the South African economy where we have more demand for higher complexity digital jobs than supply. We also have a supply and demand mismatch in terms of what skills are being generated. The outcomes financing is intended to realign and scale what the market requires and to do this inclusively.
Key challenges to launch: Challenges in amending government procurement laws to conform with outcomes funding, despite funding being approved by the government.
Role of the domestic government — Outcomes funder: Yes; Service provider: No; Member of project committee: Yes; No formal role: No; Other: 
Service providers identified and selected — Request-for-proposals: Yes; Direct contracting by outcome funder/investor/intermediary: No; Provider-led deal development: No; Other: 
Feasibility study: Yes
Proposed financing instruments — Debt: No; Equity: No; Guarantee: No; Grant: Yes; Other: 
Technical assistance grant: Yes — 
Estimated maximum potential outcome payment: 3500000000 ZAR
Overall project finance notes: USD 212000000
Social/developmental challenge: South Africa has a youth unemployed rate of about 70%. One million youth enter the job market each year, two thirds of which do not find their way into employment, education, or training. In the digital sector, as a result of the supply and demand mismatch, it is estimated that over 80,000 vacancies go unfilled.
Expected intervention model: Innovative and efficient and demand driven digital skills apprenticeships to transition poor youth into available vacancies.
Policy sectors — Employment and private sector development: Yes; Education: Yes; Social protection: No; Criminal justice: No; Health: No; Agriculture: No; Environment and climate change: No; Water, Sanitation and Hygiene: No; Energy: No; Humanitarian: No; Early Childhood Education: ; Other: 
Primary SDG goal: 8
Secondary SDG goals: 4,17
Target population: Excluded unemployed individuals that have the right profile for the most in-demand digital entry-level roles. We have mapped the demand requirements for these roles in the South African economy and are looking to stimulate 80,000 new jobs by 2025.
Targeted number of unique service users or beneficiaries: 80000
Unit type of targeted beneficiaries: Individual
Country income classification of beneficiaries — Low-income: No; Lower-middle-income: No; Upper-middle-income: Yes; High-income: No
Beneficiary notes: 80,000 beneficiaries by 2025 into higher complexity digital jobs
Notes: Data for this pipeline project was last updated in March 2024
Delivery location: South Africa