Lombard Odier is supporting a landmark transaction that the firm said has the potential to transform the way initiatives with a high social impact are financed.
The “Program for Humanitarian Impact Investment (PHII)” is understood to be the world’s first high-impact private debt transaction launched by the International Committee of the Red Cross (ICRC).
Lombard Odier is acting as co-sponsor of this project, which also involves a number of European parties, including governments and private investors.
They have collaborated to commit CHF26 million to fund the construction and operation of three physical rehabilitation centres of the ICRC in Mali, Nigeria and the Democratic Republic of the Congo.
The transaction tangibly links a targeted social outcome to a financial return and has been structured as a private loan transaction rather than the more familiar Social Impact Bond structure.
At the end of the period, ‘Outcome Funders’ – in this case the governments of Belgium, Italy, Switzerland and UK as well as ‘la Caixa’ Foundation – will pay the ICRC based on the results achieved. These funds will be used to pay back the social investors either in part, in full, or with additional return, depending on the level of efficiency reported from the three centres.
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