In a first, Grameen and Acumen raise Rs 10 Cr credit facility for social impact companies via SDG bonds
Grameen Impact Investments and Acumen announced India's first sustainable development goals (SDG) bond. The LIFE SDG Bond provides a credit facility of Rs 10 crore to five for-profit social impact enterprises. These organisations - LabourNet, Empower Pragati, Edubridge, iSTAR, and iPRIMED - work towards enabling sustainable livelihoods for youth across India in both rural and urban areas.
In 2015, the United Nations formulated 17 Sustainable Development Goals (SDGs) and 169 targets to address wide-ranging concerns such as poverty, inequality, injustice, climate change, sustainable cities and communities, among others. The goals are meant to be a roadmap to developing a more sustainable and prosperous global society by 2030.
According to a statement from Grameen Impact, the LIFE SDG Bond is "expected to train and upskill ~20,000 youth" and create employment for at least 70 percent of those trained. This is in line with the goal of achieving the UN's SDG #8 (decent work and economic growth) and expected to provide positive impact to SDGs #1, 10, and 17 (removal of poverty, reducing inequalities and partnerships to achieve goals).
"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 incentivised," the statement said.
Royston Braganza, CEO of Grameen Impact, said this was Grameen's second SDG Impact Bond with a strong focus on youth and economic empowerment, while also being "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. Grateful to Acumen Fund for their belief in us,” he added.
Grameen's first SDG Bond, launched in collaboration with ChildFund India, has helped 2,000 marginalised tribal women in Madhya Pradesh and Maharashtra become self-reliant by training them to become poultry farmers and take a step towards SDGs such as gender equality and decent work.
Mahesh Yagnaraman, India Country Director, Acumen, said, “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 catalyse development in this area.”
Acumen has been investing in social enterprises and leaders for over 15 years, including in skilling enterprises as part of its focus area of workforce development. The collaboration with Grameen is meant to foster newer innovative financial structures and instruments to help build the ecosystem in the area.