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This report is the first evaluation report as part of the Independent Evaluation of the UK Department for International Development (DFID) Development Impact Bonds (DIBs) Pilot Programme. The DIBs pilot programme runs over a period of almost six years, from June 2017 to March 2023. DFID has allocated GBP 6.3 million for the three projects:

  • ICRC: Humanitarian Impact Bond for Physical Rehabilitation;
  • Village Enterprise: Micro-Enterprise Poverty Graduation Impact Bond; and
  • Support to British Asian Trust: to design impact bonds for education and other outcomes in South Asia

The programme aims to test whether DIBs are a tool that DFID is able to use, and start to generate understanding of how and when DIBs can add value in DFID programming and support DFID’s commissioning, management, and effectiveness in delivering programmes on a PbR basis.

The report makes a number of recommendations to DIB practitioners:

  • Be transparent and share lessons learned and key successes and failures (including DIBs that failed to launch) to facilitate dissemination of learning across the sector;

  • Make contracts, payment terms, feasibility studies, investor documents and learning documents publicly available;

  • Building a database on interest rates, outcome metrics and rate cards and drawing on private sector expertise on pricing risk would facilitate the growing of the DIBs market;
  • Prioritise the documentation of lessons learned and evaluation, in order to facilitate the development of a more finely grained understanding of what works, and in what contexts.

Recommendations to DIB designers

  • Clearly agree upfront the roles and responsibilities of all involved parties, including how these responsibilities may change depending on circumstances;
  • When structuring the DIB, ensure that the contracts and governance arrangements have provisions for a range of potential eventualities;
  • Be clear about the objectives of using the DIB, and how the DIB is expected to resolve a policy problem. Then, structure the DIB so it focuses on delivering the targeted DIB effects, and seek to reduce transaction costs that do not contribute to the targeted effects of using the DIB. Be clear what is needed from stakeholders, including investors, outcome funders and advisors. This can affect whether hands-on or hands- off stakeholders are more appropriate.
  • Consider carefully the number and types of stakeholders involved, as, in this early stage of the market, complexities and potential inefficiencies increase with the number of stakeholders. Consider solutions to reduce this complexity, such as limiting the number of stakeholders involved or using contractual arrangements that simplify the processes required.
  • Develop outcome metrics and rate cards that are understood by all stakeholders and linked to other metrics used in the sector or country, to increase the value of the learning generated, minimise the costs of data collection and facilitate the broader DIB market and/or potential transition to a SIB.
  • Collaboration is important to reducing transaction costs. Seek to draw on the expertise and experience of stakeholders within the DIB.


If you wish to access all the resources available on this evaluation you can read the following: 

Ecorys also created two short briefs on the DIB effect and managing costs, view them below: