SDG Impact Finance Initiative's Innovation Window

SDG Impact Finance Initiative's Innovation Window is sponsored by Convergence (as strategic implementing partner); funded by State Secretariat for Economic Affairs (SECO), Swiss Development Cooperation Agency (SDC), UBS Optimus Foundation, and Grand Duchy of Luxembourg.. This opportunity supports mission-aligned projects and measurable outcomes.

SDG Impact Finance Initiative Design Funding Window | Convergence SDG Impact Finance Initiative Design Funding Window Originally posted on the SDG Impact Finance Initiative’s website Start Your Application here . We held two info sessions, which included insights on the application process, evaluation criteria, advice on submitting a successful application, and more.

General information session: February 27, 2024, at 11AM – 12PM EST / 5PM – 6PM CET ( view recording ) Targeted Information session : February 29, 2024 at 11AM – 12PM EST / 5PM – 6PM CET ( view recording ) Following the success of the first and second calls for proposals, the SDG Impact Finance Initiative (“the Initiative”) has announced a third call for proposals targeting a new set of UN Sustainable Development Goals (SDGs).

The SDG Impact Finance Initiative’s Innovation Window awards grants for innovative impact finance solutions that will mobilize private capital for sustainable development in emerging and frontier markets. The Initiative is funded by the State Secretariat for Economic Affairs (SECO), the Swiss Development Cooperation Agency (SDC), the UBS Optimus Foundation , and the Grandy Duchy of Luxembourg.

The SDG Impact Finance Initiative aims to accelerate advancements in the impact investing market by supporting the launch of innovative solutions that address market failures, deploy financial products that are under-supplied or supplied at insufficient volumes, and mobilize funding into new sectors and regions.

It aims to achieve three key objectives: Support the design and development of innovative impact finance solutions; Scale impact investing solutions by mobilizing private capital at scale; and Strengthen the impact investing ecosystem, improve overall frameworks, and promote quality impact management practices to enhance impact investment flows.

Under this third call for proposals, with support from Convergence, the Initiative will award grant funding for feasibility studies, proof of concept activities and expansion of existing solutions. Proposed solutions should target one or more of SDG 3 (Good Health & Well-Being), SDG 13 (Climate Action) and SDG 16 (Peace, Justice and Strong Institutions) .

Convergence supports the Initiative in the pre-selection of applications and the engagement with the applicants during the selection process. Key highlights of the call for proposals Application period & available funding : Concept notes will be accepted until March 15, 2024. Full proposals (invite-only) will be due on April 22, 2024.

Up to USD 2 million in total will be awarded to support up to 5 solutions. Winners are expected to be finalized and announced by early September 2024. Funding types : Both grants and conditionally repayable grants will be awarded to support the design, launch or scaling of solutions.

Conditionally repayable grants and their repayment terms will be considered for Proof of Concept and Expansion applications on a case-by-case basis. Repayment is expected only if the solution successfully launches and meets key milestones such as financial close. See “Which type of grant should I apply for?

” for additional details. Thematic focus : This third call for proposals is seeking solutions targeting any one of the below SDGs. No preference will be given to solutions that target multiple SDGs.

SDG 3 (Good Health & Well Being) : Ensure healthy lives and promote well-being for all at all ages Solutions can target any areas aligned with SDG 3, including but not limited to: Maternal and Child Health Support; Accessible healthcare services including medicines, vaccines and health coverage; Mental health and well-being; Improvement in Health infrastructure.

SDG 13 (Climate Action) : Take urgent action to combat climate change and its impacts Solutions can target any areas aligned with SDG 13, including but not limited to: Strengthen climate resilience and adaptive capacity to climate-related hazards and natural disasters; Supporting climate change mitigation, adaptation and impact reduction with a focus on marginalized groups; Fostering inclusive climate action.

SDG 16 (Peace, Justice and Strong Institutions) : Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels Solutions can target any areas aligned with SDG 16, including but not limited to: Fostering global peace by prioritizing efforts to reduce violence and protect vulnerable populations; Advance justice and the rule of law; Enhance global governance by strengthening relevant national and international institutions.

Geographical focus : Solutions can target any developing country or countries eligible to receive official development assistance (ODA) according to the OECD-DAC List of ODA Recipients. We highly encourage solutions that target low-income and least-developed countries. Demonstrated potential to benefit predominantly children : We highly encourage applications that can demonstrate direct benefits to children and adolescents.

Developing country applicants and partnerships : We highly encourage applications that fall into any of these categories: Applications from local organizations based in developing countries Applications from a consortium of organizations from both developing and developed countries Applications that strongly focus on building long-term partnerships with developing country actors Which type of grant should I apply for?

Applicants can apply for Feasibility, Proof of Concept, or Expansion funding depending on the stage of the proposed solution. Pre-launch Post-launch (operational) Feasibility study Proof of concept Expansion Grants up to USD 200,000.

Funding to explore the feasibility of a new solution and validate: Its ability to attract private investors through market testing Its likelihood of delivering the anticipated development impact Its initial design, capital structure and financial model Early stakeholder engagement and an initial design of the capital structure should have already been completed before applying.

Grants and conditionally repayable grants up to USD 500,000. If feasibility stage (or equivalent) has been achieved, funding to complete all design and structuring activities required to launch the solution.

For example: Finalizing the capital structure and financial model Produce key legal and marketing documents Fundraising activities to secure potential anchor investor(s) Develop an investment pipeline Grants and conditionally repayable grants up to USD 300,000. If a solution has already launched but requires operational funding support to scale and reach a financially viable size.

For example: Fundraising/marketing to reach capital raising targets Produce key legal documents Due diligence on initial pipeline and capital deployment All applications received will be scored on a scale of 0-100 depending on the stage of the solution. We regret that we are unable to provide feedback on applications.

Criteria Feasibility study Proof-of-concept Expansion Development impact Impact : Potential social, economic, or environmental impact of the solution Measurement : Does the proposal identify robust metrics and impact measurement practices to measure the potential development impact? Does the concept demonstrate the rationale and business case for using blended finance for climate adaptation and/or mitigation?

Initiative’s funding : To what extent will the funding be catalytic in achieving the targeted development impact? Target developing countries : To what extent will the funding be catalytic in achieving the targeted development impact? 17 17 17 Scale of private capital mobilization Direct (high priority) : How much private capital is expected to be mobilized directly through the solution?

Indirect : How much private capital is expected to be mobilized indirectly through the solution? Leverage ratio : For every $1 of the Initiative’s funding, how much private capital is expected to be mobilized by the solution? 14 14 14 Pioneering innovation Relative to alternatives : Why is the solution unique relative to existing alternatives in the market?

Replicability : If successful, can the model be applied in different contexts? What valuable learnings can the solution offer to the broader ecosystem? 18 15 13 Developing country partnerships Engagement : What levels of engagement have been completed to date with potential stakeholders and local partners in developing countries, and with whom?

Strategy : How well thought out is the engagement strategy? 8 9 10 Likelihood of successful fundraise Capital raise : How likely is the solution expected to attract sufficient funding to launch and meet its fundraising targets? Investors : What type of investors has the solution attracted to date (private, public, philanthropic)?

10 12 13 Track record of applicant Does the applicant have the relevant expertise, track record, and capacity required to succeed? 10 10 10 Financial sustainability Does the solution demonstrate a pathway to commercial viability over the long-term without the need for concessionality? Does the solution demonstrate a pathway to commercial viability over the long-term without the need for concessionality?

Application and review process Stage 1: Concept note (accepting until March 15, 2024) Interested applicants can start their application on Convergence’s portal. Stage 1 includes the completion of screening questions and the submission of an online application. All concept notes will be screened against the eligibility criteria (see below), and those that are eligible will then be reviewed against the evaluation criteria.

Convergence will only contact applicants selected to submit a full proposal (Stage 2). Stage 2: Full proposal (by invitation only - due April 22, 2024) Competitive concept notes will be invited to submit a full proposal. Those advancing to this stage receive instructions on how to submit a proposal.

Final proposals must be submitted by the deadline in order to be considered. No exceptions will be made. Stage 3: Initial review and shortlisting All full proposals will be reviewed and assessed against the evaluation criteria by Convergence.

Shortlisted proposals will be recommended by Convergence to the funding partners of the SDG Impact Finance Initiative for further consideration and due diligence. Shortlisted proposals will undergo two types of due diligence in parallel: Proposal-level : Convergence will request responses to detailed questions on the proposal, and introductions to key stakeholders for interviews.

Applicant-level : Applicants will undergo a compliance review led by Convergence’s Chief Financial Officer. Stage 5: Investment Committee Shortlisted proposals that satisfactorily clear due diligence will be recommended by Convergence to the Investment Committee.

The Investment Committee is composed of independent experts and the CEO of the SDG Impact Finance Initiative who will recommend proposals to the Initiative Executive Board for final approval. Stage 6: SDG Impact Finance Initiative Executive Board Proposals recommended by the Investment Committee will be reviewed for final approval by the SDG Impact Finance Initiative Executive Board.

Following final approval from the SDG Impact Finance Initiative Executive Board, the contracting stage is initiated with the selected awardees. Criteria Description Developing countries Solutions must target activities that benefit ODA-eligible countries as defined by the OECD Development Assistance Committee. Solutions must target activities that benefit ODA-eligible countries as defined by the OECD Development Assistance Committee.

The Initiative will not fund solutions targeting any countries subject to financial sanctions. Solutions must clearly and directly address SDG 3 (Good Health & Well-Being) , SDG 13 (Climate Action) and SDG 16 (Peace, Justice and Strong Institutions) No preference will be given to solutions that target multiple SDGs.

Feasibility Study and Proof of Concept applications must focus on the design and structuring of new impact finance solutions that have not yet launched. Expansion applications must focus on the scaling of existing impact finance solutions that have already launched.

Examples : bonds, facilities, funds, capital markets instruments, private companies, project finance structures, results-based financing instruments etc. Proof of early stakeholder engagement (Example: draft or signed MoU, partnership agreement, EOI etc.) and an initial design of the capital structure should have been completed for all application types.

End beneficiaries in developing countries Impact finance solutions must clearly and directly benefit end beneficiaries in targeted developing countries. Private Capital mobilization Solutions must show strong potential for private capital mobilization on a direct and/or indirect level. Direct private capital mobilization is preferred.

Applications will only be accepted by organizations or consortia of organizations. Organizations must have proof of incorporation and audited financial statements from the most recent fiscal year. The Initiative will not fund solutions targeting any countries subject to financial sanctions.

Applicants can be based anywhere in the world. We highly encourage locally-based institutions in developing countries to apply. Solutions must demonstrate a credible plan to scale to a size of at least USD 25 million over the medium to long term.

Budget and ‘skin in the game’ At least 50% of the project’s total budget should be covered by a source other than the SDG Impact Finance Initiative. This can be either financial and/or in-kind support. International ESG practices All applications should adhere to international practices regarding environmental, social and governance (ESG) standards.

Multiple applications from the same organization are accepted if the proposed solutions are different. At this time, proposals must be submitted in English. Applicants can access frequently asked questions here and submit additional questions to [email protected] .

The SDG Impact Finance Initiative and Convergence will update the FAQ regularly to address recurring questions from applicants. Join our mailing list to receive the latest updates on Convergence. Blended Finance Accelerator (formerly Design Funding)