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Social Finance undertook the feasibility, design and launch work for the world’s first Development Impact Bond for WASH (Water, Sanitation and Hygiene). Launched in 2019, it is a groundbreaking effort to finance a push toward eradicating the high rates of open defecation in the country.

Background: 

Social Finance partnered with the Stone Family Foundation, iDE and USAID to design the world’s first Development Impact Bond (DIB) for sanitation. This $10 million impact bond is a groundbreaking initiative that brings safe sanitation to some of the poorest and most vulnerable households in Cambodia.

Poor sanitation, in communities where open defecation is routinely practiced, is linked to poor health outcomes: from the spread of disease to negative effects on mental and social well-being. Poor sanitation not only impacts families without access, but also puts the entire community at risk. Beyond the spread of diseases and contamination of drinking water, open defecation also impacts the safety and dignity of all household members, and especially women, girls, and older people.

Project Factsheet

Why we are doing this: 
  • Over the past decade, iDE has contributed to sanitation coverage increasing from 29% to 67% in the impact bond's target provinces
  • The challenge now is to increase sanitation coverage to 85%
What we are doing: 

The impact bond funds the scale-up of iDE’s sanitation marketing program, which galvanises local markets to meet demand in a sustainable way. Working on both the supply side (via sanitation entrepreneurs who supply and install modern latrines) and on demand creation (through sales agents who reach out to households), iDE’s approach is different to traditional input-based aid. The approach aims to generate enduring jobs at the local level, ensuring that the market for sanitation products continues after the impact bond ends, linking it to household behaviour change around the use of these products.

Project partners: 
iDE
Stone Family Foundation
USAID