Maximizing Finance for Development : Impact Bonds for Water and Sanitation in Latin America and the Caribbean
The maximizing finance for development (MFD) approach can be implemented to close the financing gap in the water and sanitation sector in Latin America and the Caribbean, helping the region in getting closer to achieving sustainable development goa...
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| Format: | Report |
| Language: | English |
| Published: |
Washington, DC
2022
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/099230102142234381/P1668980676d060150923309d2e79f0054f http://hdl.handle.net/10986/37100 |
| Summary: | The maximizing finance for
development (MFD) approach can be implemented to close the
financing gap in the water and sanitation sector in Latin
America and the Caribbean, helping the region in getting
closer to achieving sustainable development goal (SDG 6),
particularly if emphasis is put on innovative financing, and
linking SDG financing principles. In this overall context,
impact bonds are some of the latest tools made available in
the results-based financing (RBF) area. On the supply side,
impact bonds can inject a more entrepreneurial approach into
public service provision. By focusing on outcomes rather
than activities, service providers are offered more latitude
in the way they deliver services. Through a review of the
most recent studies and research on the matter, this
document explores the challenges faced by Latin America and
the Caribbean in financing the development of its water and
sanitation sector and its need for new instruments. It
provides insights on impact bonds as one of the latest
innovations in the field of RBF. Limitations of the
evaluation include the fact that the instrument is rather
young. Chapter one looks at the challenges faced by Latin
America and the Caribbean in achieving SDG 6. Chapter two
examines the financing gap and how new instruments, and
innovative thinking can help tackle it. Chapter three
explores a new paradigm, the emergence of impact bonds.
Chapter four closes the loop by looking at how impact bonds
can be a useful complement to closing the financing gap. The
final chapter offers recommendations for the development of
this relatively new instrument. |
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