Rewarding what changes lives: Impact-Linked Finance in action

How can finance help enterprises deliver greater impact? Since 2020, Aqua for All has been exploring this question through Impact-Linked Finance (ILF), an innovative approach that rewards enterprises for achieving measurable social and environmental outcomes in water, sanitation and hygiene (WASH).

Together with Roots of Impact, we co-designed the ILF approach for WASH and began implementing it in 2020 through three pilot transactions, before ILF became a programme in 2022. Today, ILF continues through the Catalysing Impact with Innovative Finance (CIIF) programme, supported by the Swiss Agency for Development and Cooperation (SDC).

ILF combines technical assistance with instruments such as Social Impact Incentives (SIINC) and Impact-Linked Loans. Enterprises receive support to strengthen their impact measurement and management, and investment readiness, while instruments such as SIINC reward verified social and environmental results.

As several projects reach completion, a new interactive feature by Pioneers Post looks back at the programme's evolution, key lessons learned and the experiences of participating enterprises. The feature draws on the Impact-Linked Finance Knowledge Report released earlier this year and highlights how innovative finance can help businesses grow their impact.

At the time the immersive feature was launched, Aqua for All had supported through ILF:

• 8 enterprises through impact-linked financing instruments in Cambodia, Kenya, Malawi and Uganda.
• 25 enterprises with tailored technical assistance in 11 countries in Africa and Asia.
• More than 100,600 people to access water and sanitation products and services.

ILF also achieved significant average financial leverage: every €1 of incentives mobilised €7 in additional external investment.

Since then, we have signed three new SIINC transactions in Cambodia, and Bangladesh under the CIIF programme.

Explore Pioneers Post immersive feature on ILF.

Interested in ILF? Applications for ILF support are only accepted through specific calls for applications in each country. Aqua for All does not accept unsolicited applications outside these calls.

For more information about ILF or opportunities to invest in ILF-supported enterprises, please contact ILF@aquaforall.org.