- This story was updated on 12 September 2018; see final paragraph
The British Asian Trust has led the creation of what the charity says is the world’s largest impact bond for education, potentially worth up to about £17m over the next four years.
The development impact bond will use money from outside investors to fund the work of three Indian charities, with the aim of helping 300,000 children improve their learning and meet increased targets in numeracy and literacy.
A spokeswoman for the British Asian Trust said that $11m (£8.5m) had been raised by the DIB to date, and the charity hoped the bond would double in size to approximately $22m (£16.9m) over the next four years.
The $11m in working capital raised so far will be provided by the UBS Optimus Foundation over the next four years.
Investors in impact bonds receive a return on their investments only if the projects they fund are successful.
The DIB will work in two states in India – Gujarat and Delhi – with the charities the Kaivalya Education Foundation and Gyan Shala running programmes in Gujarat, and the Society for All Round Development running two programmes in north Delhi.
The spokeswoman said the two states were chosen because of the work carried out by the three local charities running the new programmes.
Partners on the project include BT, Comic Relief, the Department for International Development, the Michael & Susan Dell Foundation, the Mittal Foundation and the Tata Trusts in India.
Richard Hawkes, chief executive of the British Asian Trust, said: "The British Asian Trust is at the forefront of developing new approaches to development.
"We are delighted to have developed this DIB together with such an amazing group of cross-sector partners, and we hope this can give the charity sector and international development sector the shake-up that is so desperately needed."
- The story originally said an initial investment of $8.5m (£6.5m) from the foundation of the Swiss bank UBS had helped fund the DIB.