New USAID Partnership Leverages Private Investment to Save Women, Children

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USAID’s new development impact bond could save up to 10,000 moms and newborns. / Project Ujjwal, a UK Department for International Development project implemented by Palladium
USAID’s new development impact bond could save up to 10,000 moms and newborns. (Project Ujjwal, a UK Department for International Development project implemented by Palladium)

New USAID Partnership Leverages Private Investment to Save Women, Children

I recently returned from India, where despite significant improvements, the country still accounts for 20 percent of maternal and child deaths globally. Every year, more than 1 million Indian children die from complications and illnesses for which there are known and affordable treatments.

The State of Rajasthan, in particular, has one of the highest maternal and neonatal mortality rates in the country. Every year, 80,000 babies die in Rajasthan because of inadequate medical care.

Rajasthan’s remote, rural communities and urban slums have few places where mothers can go for quality health care. So, they turn to local “healers,” neighbors who often work with harmful or expired medications, and hospitals that lack trained medical staff or necessary equipment.

The Government of India recognized that this is a problem, and is taking steps at the national and state level to strengthen India’s health system and improve the quality of care in health facilities. This is an effort that USAID is proud to support, and we’re working to supplement it by helping to improve the quality of private health facilities in Rajasthan.

We believe the purpose of foreign assistance must be to end the need for its existence. We hope to walk with countries and communities as they lead their own journey to self-reliance and prosperity.

In India, USAID is joining the government to bring new partners and innovative ideas to the table to help strengthen health care in the country.

One of these ideas is a new development impact bond for health, which I announced last month at the Global Entrepreneurship Summit in India. USAID leads the world in developing and testing different innovative financing models for development, and this is the latest. It’s called the Utkrisht Bond, named after the Hindi word for “excellence,” and is our first development impact bond for health.

Development impact bonds are innovative, results-oriented ways of leveraging private capital to help finance our development goals.

This bond is specifically targeted to reduce the number of maternal and newborn deaths in Rajasthan. It’s the largest and most ambitious of its kind — expected to enable up to 600,000 women to access improved care, with the potential to save 10,000 moms and newborns.

USAID’s development impact bond could enable up to 600,000 women to access improved care. / Project Ujjwal, a UK Department for International Development project implemented by Palladium

USAID’s development impact bond could enable up to 600,000 women to access improved care. (Project Ujjwal, a UK Department for International Development project implemented by Palladium)

So, how will it all work? Under this new model, private capital funds the initial investment, and we pay only when the development goal is achieved.

In this case, the UBS Optimus Foundation will raise capital from its private investors to front the money to ensure about 400 private health facilities can meet quality healthcare standards.

Teams will then work at each of these 400 facilities to ensure that staff is appropriately trained and life saving equipment and medicines are available. Each facility will undergo a rigorous review process to ensure that they have met accreditation standards.

USAID and Merck for Mothers* have each committed up to $4.5 million to this partnership, but will make payments to the UBS Optimus Foundation only if the facilities meet the accreditation standards. This means that we only pay if the project is a success.

What’s most exciting to me is that, if this initiative is successful, which we expect it will be, the Government of Rajasthan will scale the approach throughout the State, which will leave a lasting and sustainable legacy for the people of India.

At USAID, we’re using our investments to bring new partners to the table, leverage additional funds, and find innovative solutions to help our host countries pursue their own bright futures.

This is our first health impact bond, but we hope to expand this model to ensure women and children around the world have the opportunity to thrive.

*known as MSD for Mothers outside of the U.S. and Canada

About the Author: Mark Green serves as the Administrator at the U.S. Agency for International Develpment. 

Editor's Note: This entry originally appeared in USAID's 2030: Ending Extreme Poverty in this Generation publication on Medium.com.