In what is claimed to be a maiden innovative move on civic terrain, the Pimpri-Chinchwad Municipal Corporation (PCMC) has signed an MoU with UNDP India to co-create India’s ‘first Social Impact Bond (SIB)’. As part of the unique investment tool, the PCMC administration will bear the cost of a public welfare project associated with the bond, if the pre-defined project targets are fulfilled.
According to UNDP, this type of bond lays down outcome-based targets to be achieved at the start of the contract. This feature allows for tracking the progress of the outcome, thus ensuring transparency for investors. This mechanism also ensures that funds are used effectively and efficiently towards the project. This SIB will support the PCMC in improving healthcare services for local residents, especially with respect to the pandemic, while incurring minimum investment risks, said UNDP.
This is the first time that a government body will act as the ‘outcome funder’ in a bond, whereas traditionally most government-funded public projects require large and early investments by the government with a substantial gestation period of outcomes and involve various kinds of risks, officials said.
Dr Manish Pant, chief of Health and Governance, UNDP India, said, “We will support the PCMC in its efforts to strengthen the public healthcare system, using innovative financing models, such as social impact bonds. Health plays a critical role in achieving sustainable development goals. We hope that this will lead to the development of a successful public healthcare model that will ultimately address the city strategy objectives of PCMC.”
Municipal Commissioner Shravan Hardikar said, “The social impact bond places PCMC at the forefront of adopting innovative mechanisms to drive social development, specifically in the healthcare sector, which is the cornerstone of our urban planning. This is in line with our vision of making Pimpri-Chinchwad the most liveable city in India by 2030.”
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