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The Authority of Social Contribution – Ma'an and Aldar have signed a strategic agreement that will see both organizations address priority social challenges through social contracting.
Aldar will invest AED 2 million, a demonstration of their commitment to the program. As part of the agreement, Aldar and Ma'an will work together to build a Social Impact Bond, with the aim of launching later this year.
Social Impact Bonds are an internationally established and successful way to finance the delivery of public services, first introduced in the UK. They involve a government commissioner, a social service provider and a social investor - using multi-party partnerships to bring together the right organizations to solve social challenges.
Social contracting is a contractual agreement, which operate on a pay-for-success basis, whereby payment relies on a successful social outcome – a first for government contracts.
Abu Dhabi is the first in the GCC to introduce this innovative funding method for social services.
Dr. Saif Alshaali, Executive Director – Social Incubator and Contracting (Acting), Ma'an, and Greg Fewer, Chief Financial & Sustainability Officer, Aldar, signed the Memorandum of Understanding at a signing ceremony on 9th March 2020, in the presence of H.E. Salama Al Ameemi, Director General of Ma'an, and Talal Al Dhiyebi, Chief Executive Officer, Aldar.
Her Excellency Salama Al Ameemi, Director General of Ma'an, said: "Social Impact Bonds are a game-changer for how we think about the delivery of social programs, putting a relentless focus on specific and measurable outcomes for the people of Abu Dhabi.
"We are proud to be leading the way in the region for introducing this internationally-recognised method of financing and delivering solutions for social challenges. It is part of our wider mission to encourage the third sector to flourish in Abu Dhabi and deliver solutions to social challenges in partnership with government, the private sector and civil society.
"I welcome this partnership with Aldar and look forward to working with them closely to progress a Social Impact Bond which we hope will make a significant impact on social challenges and improve people's lives in the Emirate."
Greg Fewer, Chief Financial & Sustainability Officer, Aldar, said: We are proud to be partnering with the Authority of Social Contribution – Ma'an to create Abu Dhabi's first social impact bond. This is a fantastic example of how the public and private sectors can work together in an innovative way to create outcome driven programmes that address matters of critical importance to our society and communities at large. This partnership is a clear example of how Aldar is delivering on its sustainability strategy, launched last year, to create a positive impact on our economy, community, people, and environment."
Social Impact Bonds are now used by more than 40 countries worldwide and help to develop an outcome-oriented approach to social challenges, encouraging innovation and growth within the third sector.
Social service providers have the freedom to innovate and come up with a solution that delivers the social outcome. Private investors, such as High Net Worth Individuals or investment funds, will then invest in the Social Impact Bond (giving the service provider the upfront capital to deliver the social program) and the government will pay back the investor - – but only if the outcomes are achieved.
It allows investors to meet the increasing demand for using financing to generate social good as well as supporting CSR efforts in a way that avoids dependence and grows capital which can be recycled and reinvested in other social good projects.
It also ensures that governments only pay for programs that work and make a measurable social impact.
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