Impact bonds emerge as an asset class

Impact bonds emerge as an asset class

Bonds Debt Capital Markets Features Colombia Peru

In a bid to raise employment levels, Colombia's government decided to try something new. Rather than just spend 2.2 billion pesos ($770,000) on a project for 500 people in three cities, it turned to a tool that tied funding to the outcome. The so-called Colombia Workforce initiative became the first social impact bond, or SIB, issued in a developing country a little over a year ago. Backed by several non-government organizations and foundations, the bond has raised funds to provide training and placement services for vulnerable populations in the country. But there is a catch, as far as investors go. The returns depend upon the success of the project. Payment at the end of 18 months for the

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