Innovative Financing of Outcome-Based Interventions in Latin America and the Caribbean

The innovation laboratory of the Inter-American Development Bank Group (IDB), IDB Lab, has recently launched the Outcomes Hub as a platform to scale Pay-for-Results (PfR) projects in Latin America and the Caribbean (LAC). PfR includes a range of different financial instruments, such as Social Impact Bonds (SIBs), where the payments are provided after the delivery of verified results. IDB Lab has led the development of four successful SIBs in Colombia and now intends to scale this and other results-based finance to the LAC region.

To address the scaling challenge, the SIPA Team developed a proposal for an Outcomes Linked Bond. This instrument would scale funding to allow for more PfR projects. The Outcomes Linked Bond proposal also includes three new work streams for the Outcomes Hub which would diversify the revenue of IDB Lab: technical assistance to governments and service providers, acting as a SIB anchor investor, and managing a guarantee facility for SIB investors.