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UBS Optimus Foundation, which provides first-loss capital, and Bridges Outcomes Partnerships ( BOP ), a not-for-profit impact specialist that acts as a portfolio and delivery manager, have achieved the successful final close of their US$100 million SDG Outcomes Fund through a new anchor commitment from the European Union.
This Luxembourg-based SFDR Article 9 fund is a pioneering blended finance initiative designed to accelerate progress towards the United Nations Sustainable Development Goals ( SDGs ) by supporting outcomes-focused programmes in low- and middle-income countries, particularly in Africa and Asia.
Mezzanine and senior capital have been committed by the US International Development Finance Corporation and British International Investment, alongside private investors, including Legatum, family offices such as the Tsao Family Office and Ferd, and high-net-worth individuals.
The European Investment Bank recently completed a US$18 million commitment to the fund through funding from the European Commission via the ACP Trust Fund, enabling it to reach its US$100 million target.
This investment will contribute to the Africa-EU Global Gateway Investment Package objectives and, the entities say, this operation is fully in line with the European Commission’s priority to promote impact investments and find innovative ways to finance programmes in low- and middle-income countries, including in fragile ones.
Better outcomes for underserved
The fund is the first specifically designed to support outcomes-based programmes in low- and middle-income countries, with a focus on health, education, women’s economic empowerment and the environment.
For each programme, BOP brings together like-minded partners to find innovative solutions that can achieve measurable impact. Expert local partners are identified to deliver the programme, with the SDG Outcomes Fund covering the up-front costs.
Funders – typically local or national governments, donors, foundations, corporates, NGOs or even individuals themselves – only pay if successful, verifiable outcomes are achieved.
The focus on outcomes, instead of on the traditional approach of paying for activities or inputs, the entities say, allows delivery consortia to adjust and tailor their programmes as they go along, learning from real-time impact data about how to achieve the best possible results in each context. As a result, the entities note, nearly US$13.5 million of outcome payments have already been achieved.
The fund aims to have a broader systemic impact by:
“The SDG Outcomes Fund is a ground-breaking initiative that shows how different forms of capital can come together to deliver outcomes for people who need it most,” points out Tom Hall, UBS Optimus Foundation Network’s CEO and global head of social impact and philanthropy. “Reaching the US$100 million milestone demonstrates the powerful potential of outcomes-based funding programmes and their role in shaping future impact investment models.”
