Project: Refugee Impact Bond (Second Tranche)
State of development: Current
Stage of development: Late stage
Stage notes: The Refugee Impact Bond 1st tranche is closed and launched. Fundraising is ongoing for the 2nd tranche in Lebanon with first investor comittment from DFC confirmed
Type of instrument — Impact Bond: Yes; Outcomes Fund: No; 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 The project is the 2nd tranche of the Refugee Impact Bond. The 1st tranche was launched in Jordan in September 2021.
Expected launch date: Q2 - 2023 or later
Total expected project development time: 6-12 months
Expected length of project (years): 4
Project design process began: Q1 2016
Rationale for using outcome-based finance: Livelihoods programmes have great potential to improve refugees’ living conditions and to boost the host country’s economy, as refugees spend the money they earn. However, they are a relatively new area for humanitarian organisations and can be challenging to implement, which means traditional donors are reluctant to take the risk of funding them. When programmes do exist, results are often disappointing owing to top-down or ‘one-size-fits-all’ approaches. Finally, funding contingent on activity-based annual cycles, hampers efficacy and innovation. The DIB transfers the risk of funding a multi-year livelihoods programme to investors. Beyond risk externalisation, the DIB also provides high value-for-money for the donors.
Key challenges to launch: Raising the necessary outcome funding commitments.
Role of the domestic government — Outcomes funder: No; Service provider: No; Member of project committee: No; No formal role: Yes; Other: 
Service providers identified and selected — Request-for-proposals: Yes; Direct contracting by outcome funder/investor/intermediary: No; Provider-led deal development: No; Other: Service provider was selected out of a shortlist of providers short-listed during feasability study. Final candidate selected following a stringent due diligence process.
Feasibility study: Yes
Proposed financing instruments — Debt: Yes; Equity: No; Guarantee: No; Grant: No; Other: 
Technical assistance grant: Yes — The feasability study was funded by Convergence. The structuring phase was funded by Convergence and IKEA Foundation.
Estimated maximum potential outcome payment: 8800000 USD
Social/developmental challenge: Worldwide, conflict and climate crises are forcing more people than ever from their homes, with displacement and its impacts lasting years beyond the crisis. The Syrian conflict has driven 6.6 million people to flee Syria with 80% settling in neighbouring countries. This puts a strain on local economies and infrastructure as well as leaves refugees and their host communities struggling to access safe and dignified work, basic services, and affordable housing.
Expected intervention model: Near East Foundation will implement a micro-enterprise, vocational trainings and grants programme. The programme will support 3,000 refugees and Lebanese through business development and resiliance-building trainings. The majority of these will also receive start-up grants and coaching sessions to support the launch of their micro enterprise.
Policy sectors — Employment and private sector development: Yes; Education: Yes; Social protection: Yes; Criminal justice: No; Health: No; Agriculture: No; Environment and climate change: No; Water, Sanitation and Hygiene: No; Energy: No; Humanitarian: Yes; Early Childhood Education: ; Other: Livelihood programs in humanitarian contexts
Secondary SDG goals: 1, 4, 5, 8, 10, 17
Target population: Vulnerable refugees and host communities (75% women and 30% youth)
Targeted number of unique service users or beneficiaries: 3000
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
Notes: Data for this pipeline project was last updated in April 2022.
Delivery location: Lebanon