Project: Social Impact Guarantee to Incentive Innovations in Rural Connectivity in Uganda
State of development: Current
Stage of development: Early stage
Stage notes: Early-Stage Design
Type of instrument — Impact Bond: No; Outcomes Fund: No; Social Impact Incentives (SIINC): Yes; Social Impact Guarantee: Yes; Payment-by-results (no pre-financing): No; Technical Assistance and Market-building program: No; Other: 
Rationale for using outcome-based finance: Ultimately, we believe the SIG-powered TRRC program will connect millions of rural residents and transform the way that development outcomes are achieved in Uganda. By utilizing an outcomes-based financing framework to incentive the right partners in the right ways, we ensure long-term sustainability focused on efficiency and efficacy, rather than bureaucracy and disparate, disorganized systems. The three-year pilot is focused on strategy development, stakeholder engagement and capacity building, and innovating new solutions to address long-standing issues (digital asset management systems, climate-resilient engineering for longer asset lifespans, etc.). In this way, the pilot will do the work to ensure that the longer-term scaled national plan is cost-effective, productive, and serving those most in need. Similarly, it will serve as a case study for how outcomes-based funding can drive partnership and leverage investment to achieve national goals and the broader global development agenda. 
Key challenges to launch: While Coalition anchor membership are familiar with traditional pay-for-performance finance mechanisms, outcomes-based funding is a much newer concept, and the facility will need to be well-designed to incentivize the GoU to explore new solutions to address a well-entrenched, if failing, system. A SIG de-risks this exploration, positioning the government as a viable outcome funder while expanding the space for implementing partners to trial, iterate, and improve service delivery. 

Accelerator funding and advisement will support the critical early design phase of the financing structure for the programâs $10 million pilot. A particular guarantor has not yet been identified and the Acceleratorâs match-making services would be especially beneficial on this point. More broadly, Coalition membership does not have significant OBF contracting expertise, and would draw on the Accelerator networkâs learnings and expertise in this area to ensure that all parties are attended in the deal and that legal boxes are checked.
Social/developmental challenge: In Uganda'srural farmlands, millions of people live more than 2 kilometers from an all-weather road, or are cut off from services like markets, jobs, health clinics, and schools when decrepit or non-existent infrastructure fails to provide access during periods of extreme weather. While the Ugandan government has made significant headway in addressing the rural transport network, more than 90% of all roads remain unpaved, and 66% of the tertiary road network is in poor condition. If the rural road network is not routinely and periodically maintained, roads, trails, and bridges prematurely require full rehabilitation; which increases the lifecycle cost and creates logistical hurdles. The Coalition was designed to develop strategies that address the existing root challenges and use them to address bottlenecks in the road network, so that the Government has a clean slate and the appropriate systems to effectively maintain the network going forward. 
Expected intervention model: Approximately 10 million rural Ugandans are isolated. This means these communities lack access to critical services, and are at risk of chronic poverty. Ensuring safe, reliable year-round access for these vulnerable rural residents is key to achieving any number of development agendas, including the Sustainable Development Goals, Uganda's National Development Plan III, and Vision 2040. The Government of Uganda has made headway in connecting rural communities, in particular through its District, Urban, and Community Access Roads (DUCAR) Network, but inadequate funding and a lack of strategic, coordinated systems limit progress. The Transformative Rural Roads Coalition (TRRC) was formed with a vision for a connected Uganda where all communities are prosperous and resilient. The Coalition will collaborate to unlock a future where government has the strategies, systems, and support to overcome complex and interdisciplinary roadblocks and successfully build and maintain a sustainable DUCAR network. An opportunity exists to utilize an outcomes-based funding mechanism to catalyze investment into an innovative, multi-sector effort and ensure that that investment is powering the most productive, creative solutions.
Policy sectors — Employment and private sector development: No; Education: No; Social protection: No; Criminal justice: No; Health: No; Agriculture: No; Environment and climate change: Yes; Water, Sanitation and Hygiene: No; Energy: No; Humanitarian: No; Early Childhood Education: No; Other: 
Primary SDG goal: 1,8,13
Country income classification of beneficiaries — Low-income: Yes; Lower-middle-income: No; Upper-middle-income: No; High-income: No
Notes: Data for this pipeline project was last updated in August 2023
Delivery location: Uganda