3. Prepare for what comes after
War results in a lot of destruction — destruction of infrastructure, society, and livelihoods. While supporting Ukraine and stopping the war is critical, it is equally important to prepare for the aftermath of it. Some opportunities — such as building back infrastructure — might be more investable; yet, many will not be. Financing housing and resettlement for asylum seekers, healthcare for the injured and disabled, and education and integration of refugees are all areas that require financing, but might not be what traditional finance calls ‘investable.’
The good news is there has been an uptick in the development and venture philanthropy sector in terms of innovative financing transactions. Oftentimes, these transactions involve some sort of blending between public/philanthropic capital and private capital, where the first ‘pays’ for the impact in one form or another, and the private capital will gain some sort of financial return. This is where you come in — you can participate in setting up such a transaction and join as the private capital part!
A few example transactions that have been set up in the past:
Humanitarian Impact Bonds
- Launched in 2017 by ICRC, CHF 26 million, 5 years
- Objective is to expand and improve efficiency of physical rehabilitation services in conflict regions (Mali, Nigeria, DRC)
- Investors will be repaid based on the success of the centers, ranging from -40% to +7%
- https://koisinvest.com/post/icrc-launches-worlds-first-humanitarian-impact-bond/
Refugee Impact Bonds
- Launched in 2021, $14 million
- IKEA Foundation, Novo Nordisk Foundation and Norad as outcome funder
- Objective is to foster employment and entrepreneurship in Syria, Jordan, Lebanon, Turkey and Iraq (locations hit by the Syrian crisis 11 years ago)
- Investors will be repaid based on business survival and the ability of households to meet their basic needs, up to +5.1% annualized return
- https://www.refugeeimpactbond.org/
- https://www.neareast.org/press-release-14m-development-impact-bond-for-refugees-launches-in-middle-east/
Read here about the key principles of helping right now in part 1.
Read more about what you can do now for the people of Ukraine in part 2.
