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Proyectá tu futuro – Buenos Aires Youth Employment Social Impact Bond
Key Facts and Figures
Proyectá tu futuro – Buenos Aires Youth Employment Social Impact Bond
Key Facts and Figures
YoungPeople.jpg

This social impact bond supports vulnerable young people in the city of Buenos Aires to access skills and employment training so that they can secure and maintain jobs.

Key facts and figures

  • Launch date

    December 2018

  • Duration

    2 years

  • Upfront capital committed

    48,000,000 Argentinian pesos (approx. USD 1.1 milllion)

  • Target population

    1,000 vulnerable young people

  • Commissioners

    The Government of the City of Buenos Aires

  • Providers

    Forge Foundation, Pescar Foundation, AMIA, Reciduca

  • Investors

    Banco Ciudad, Banco Galicia, Organización Román, IRSA, anonymous private investor

  • Intermediary (SIB manager & Performance manager)

    Acrux Partners

  • Technical assistance (impact bond design & deal structuring)

    Social Finance UK, Acrux Partners, Fundación Alimentaris, Beccar Varela Law Firm (Legal advice)

  • Evaluator

    UNDP Argentina

  • Other support

    BID FOMIN (financial support during the design/structuring phase, and optional working capital loan to investors)

When the feasibility study for this SIB project was conducted, Argentina had the highest youth unemployment rate of all Latin American countries, reaching 24.7% in 2017. Youth unemployment is particularly high in the South of Buenos Aires, where the population lives in a more vulnerable context; youth there are 70% more likely to be unemployed than their peers in the rest of Buenos Aires.

Source: Acrux Partners (2018).

This social impact bond was developed to deliver skills training and employment support to vulnerable, unemployed individuals aged 17-24 living in the South of Buenos Aires. 

The program, “Proyectá tu futuro”,  works with 1,000 young people who live in the five most deprived boroughs in the South of the city. It is delivered by a collaboration of four different service providers over a period of 4 to 6 months (with around 8 hours of support per week), depending on the service provider. It provides a mix of soft and technical/practical skills training, as well as mentoring for at least 6 months after the training component is completed, to help participants to find and sustain a job. Achieving outcomes also requires providers to work with employers to increase the number of companies that are open to hiring individuals from this societal group and foster employment.

To be eligible, individuals or their immediate family (mother, father, child), must be in receipt of a means-tested government subsidy, or be residents of a settlement or shanty town in the selected boroughs. They cannot have participated in another employment or skills-development government program in the 3 months prior to entering this program.

The evaluation, and measurement of outcomes achieved for the first cohort, will start in June 2019. The last results achieved by the program will only be known in December 2021, 12 months after the end of the intervention for the last cohort. The cohorts were administratively defined in the beginning of the project.

Buenos Aires Youth Employment SIB Structure.png

Outcomes framework

The SIB aims to improve the long-term employment outcomes of underprivileged youth living in the South of Buenos Aires. An outcomes payment card that rewards longevity in a job and differentiates payments according to the participant’s vulnerability, paying additional compensation for those individuals who are mothers or live in a settlement or shanty town, was established. 

The five payable outcomes are: 

  1. completion of secondary school, for those beneficiaries who were still enrolled in school upon entering the program; 
  2. entry into a first job, which must be formal and pay all relevant mandatory employer contributions and taxes; 
  3. sustained employment for 4 months; 
  4. sustained employment for 12 months; and 
  5. expansion of the labour market, as measured by an increase in the number of organisations that employ “Proyectá tu futuro” program participants.

Source: Acrux Partners (2018).

BuenosAiresSIBOutcomesFramework.png
Proyectá tu futuro – Buenos Aires Youth Employment SIB Outcomes framework

Timeline

Project insights

  1. Overcoming regulatory constraints and seeking legal assistance from the get-go

    Legal support was paramount when it came to public advocacy in favour of the SIB and its prospective beneficiaries. Legal technical assistance helped address that challenge that the general fiscal framework in Argentina does not allow NGOs to become social investors. The Beccar Varela Law Firm, together with Acrux Partners, contacted the Argentine tax authorities and presented proposals on the income tax regulation reform, which made it clear that social impact bond investment was possible. 

    For the SIB financial assessment, it is necessary for the trust (SPV) to deduct expenses incurred by NGOs, which means that NGOs had to bill for services. However, the tax exemptions enjoyed by NGOs could be at risk if they have to bill the SPV for services. During the negotiation process with NGOs delivering the program, legal support and opinions were presented to assure the NGOs that by providing services and billing, their tax exemption would not be put at risk

    Source: Estudio Beccar Varela, 2019.

  2. Building relationships takes time

    The legal team involved in the impact bond reinforced the importance of designing a working schedule which contemplates the necessary time to negotiate and build trust among the different parties, which are generally diverse, given their heterogeneous characteristics.

    Source: Estudio Beccar Varela, 2019.

Downloads and Resources

Buenos Aires Youth Employability SIB - Data Template

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