International Development Enterprises (iDE), in partnership with the Stone Family Foundation and USAID, has announced a $10 million development impact bond in support of sanitation initiatives in Cambodia.
The first DIB developed for the water, sanitation, and hygiene (WASH) sector, the Cambodia Rural Sanitation DIB is aimed at ending open defecation in sixteen hundred villages in six provinces by 2023 and accelerating the Cambodian government's efforts to achieve universal sanitation. Safe sanitation is critical to keeping drinking water free of contamination and preventing the spread of disease, improving rural health and reducing stunting among children.
To that end, the impact bond will support iDE's Sanitation Marketing Scale-up Program, which delivers tens of thousands of affordable latrines to Cambodian households annually and has helped raise sanitation coverage in the six target provinces from 29 percent to 67 percent since 2009. The Stone Family Foundation, the impact investor, will provide the upfront investment required, while USAID, the outcomes funder, will pay up to $9.99 million to the foundation if the desired results are achieved.
Developed with the support of Social Finance — which undertook the feasibility study and facilitated the design discussions among the partners — the impact bond mechanism is expected to incentivize continuous program improvement, enabling iDE to leverage data analysis and adaptive management strategies to achieve the desired outcomes.
"The outcomes focus of an impact bond provides flexibility to evolve in a complex and constantly changing market ecosystem," said iDE chief executive Lizz Ellis. "This flexibility is important as iDE tests new strategies for increasing our ability to reach the poorest households with improved sanitation, ensuring that all people benefit from the drive toward total sanitation."