India: Grameen Impact, Acumen raise funding through SDG bonds

Grameen Impact CEO Royston Braganza. Photo: Mint

Grameen Impact Investments India and Acumen have raised ₹10 crore by selling bonds to on-lend to five social enterprises involved in training and skill development to meet the UN’s Sustainable Development Goals (SDG).

The Livelihood Innovation Fostering the Economy (LIFE) SDG Bond has provided a credit facility for ₹10 crore to a pool of workforce development social enterprises—LabourNet, Empower Pragati, Edubridge, iSTAR, and iPRIMED—to enable sustainable livelihoods for youth in the rural and urban areas, the investors said on Monday.

The bonds are expected to help train and improve skills of approximately 20,000 youth, with the goal of creating employment for at least 70% of the trained youth.

SDGs are a universal call to action to end poverty, conserve the environment, and ensure peace and prosperity.

“LIFE SDG Bond envisions to present a successful workable financial structure to private investors, corporates as well as the government to shift the credit facility assessment for such enterprises from being only a risk-based assessment model to an impact-based assessment model that can be incentivized,” it said.

This is the second SDG Bond launched by Grameen Impact. The first one—Women Holistic Empowerment and Enhanced Livelihood SDG Bond—in collaboration with ChildFund India aims to help 2,000 marginalized tribal women in Maharashtra and Madhya Pradesh to become self-reliant by training them to become poultry farmers.

It is “the first impact bond in the world to focus on multiple for-profit social enterprises wrapped into a single pay-for-results instrument. Delighted to partner with 5 stellar skill development companies across the country to cover over 20,000 youth”, said Royston Braganza, chief executive officer of Grameen Impact.

“This is the first of its kind outcomes-based funding model in the world for a for-profit enterprise which will focus on impact outcomes as part of the debt financing structure. Our end goal is to draw more support and capital from government, industry and philanthropy—towards outcome-funded instruments that can catalyze development in this area,” said Mahesh Yagnaraman, India country director of Acumen.

Acumen has been investing in social enterprises for over 15 years. Acumen has invested in skilling enterprises as part of its focus area of Workforce Development and with this collaboration with Grameen it aims to foster new innovative financial structures and instruments.

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