Development Impact Bonds (DIBs) are a performance-based investment instrument intended to finance development programmes in low resource countries, which are built off the social impact bond (SIB) model. DIBs bring together private investors, non-profit and private sector service delivery organizations, governments and donors to deliver results that society values. They provide upfront funding for development programs by private investors, who are remunerated by donors or host-country governments—and earn a return—if evidence shows that programs achieve pre-agreed outcomes.
This is how the Educate Girls' DIB works:
A socially motivated investor - the UBS Optimus Foundation (UBSOF) puts in the working capital, so the service provider Educate Girls can begin its work on the ground. An outcome payer Children's Investment Fund Foundation (CIFF) promises to pay back the investor UBSOF the original amount plus extra returns as long as the agreed targets are delivered by the service provider Educate Girls. The targets are focused on increased enrollment of marginalized girls and the children's progress in literacy and numeracy outcomes, which will be assessed by an independent evaluator over the course of the three years tenure.