Innovative Financing Mechanisms Research Articles

Primary Care 2030: Creating an Enabling Ecosystem for Disruptive Primary Care Models to Achieve Universal Health Coverage in Low- and Middle-Income Countries.

Background:Forty years after Alma Ata, there is renewed commitment to strengthen primary health care as a foundation for achieving universal health coverage, but there is limited consensus on how to build strong primary health care systems to achieve these goals.Methods:We convened a diverse group of global stakeholders for a high-level dialogue on how to create an enabling ecosystem for disruptive primary care innovation. We focused our discussion on four themes: workforce innovation and strengthening; impactful use of data and technology; private sector engagement; and innovative financing mechanisms.Findings:Here, we present a summary of our convening’s proceedings, with specific recommendations for strengthening primary health care systems within each of these four domains.Conclusions:In the wake of the Astana Declaration, there is global consensus that high-quality primary health care must be the foundation for universal health coverage. Significant disruptive innovation will be required to realize this goal. We offer our recommendations to the global community to catalyze further discourse and inform policy-making and program development on the path to Health for All by 2030.

A Comprehensive Review of the Global Development of Initial Coin Offerings (ICOs) and Their Regulation

Initial coin offerings (ICOs) represent an innovative and new funding mechanism for new technology ventures. In our comprehensive review of the industry’s evolution, we show that despite its short history, there have been dramatic changes and shifts in the number of ICOs, the amount of money raised, the geographic distribution of ICOs, and their regulation. This dynamism calls into question current research practices and findings. We propose that scholars sort out and differentiate supply of vs. demand for ICO funding, taking geography and regulation into account with a global perspective.

A graduate level course on economic metrics and innovative finance mechanisms for wind

A graduate level course on economic metrics and innovative finance mechanisms for has been developed. Topics include non-traditional financing structures for project development and the application of economic metrics to investment decision making. The development of this course was motivated by recent surveys and through consultation with wind energy professionals. Recent surveys have indicated that highly qualified persons entering renewable energy fields are lacking knowledge of the technical, economic, and policy-connected aspects of their work. Synthesis of these discussions, which have guided the development of course content, highlighted that an understanding of market policy and project economics would greatly enhance the efficacy of energy technical professionals. The purpose of this course is to develop holistically equipped wind energy professionals who can intelligently engage with business and finance professionals in their field. Both live instruction and online versions of this course intend to provide this knowledge through application-based lectures and case studies to set graduates of this course apart from their peers. Course delivery, topics, learning outcomes, and evaluation methods are provided.

A Theory of Social Impact Bonds

Social impact bonds (SIBs) are an innovative financing mechanism for public goods. In a SIB, an investor provides capital to a service provider for a social intervention. The investor receives a return based on the outcome of the intervention relative to a predetermined benchmark. We describe the basic structure of a SIB and provide some descriptive statistics for these financial instruments. We then consider a formal model of SIBs and examine their ability to finance positive net present value projects that traditional debt finance cannot. We find that SIBs expand the set of implementable projects if governments are pessimistic (relative to the private sector) about the probability an intervention would succeed or if the government is particularly averse to paying costs associated with a project that does not generate offsetting benefits. As both these features are present in various public programs, we conclude that SIBs are a real innovation in public finance and should be considered for projects when traditional debt finance has been rejected.

A Theory of Social Impact Bonds

Social impact bonds (SIBs) are an innovative financing mechanism for public goods. In a SIB, an investor provides capital to a service provider for a social intervention. The investor receives a return based on the outcome of the intervention relative to a predetermined benchmark. We describe the basic structure of a SIB and provide some descriptive statistics for these financial instruments. We then consider a formal model of SIBs and examine their ability to finance positive net present value projects that traditional debt finance cannot. We find that SIBs expand the set of implementable projects if governments are pessimistic (relative to the private sector) about the probability an intervention would succeed or if the government is particularly averse to paying costs associated with a project that does not generate offsetting benefits. As both these features are present in various public programs, we conclude that SIBs are a real innovation in public finance and should be considered for projects when traditional debt finance has been rejected. Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Alternativa de financiación basada en titularización para la producción de plátano en el Urabá antioqueño

Los procesos de globalización a los que se enfrenta el sector agropecuario en Colombia conllevan una etapa de reestructuración para ser más competitivos y llegar a nuevos mercados, dado que los consumidores hoy en día son cada vez más informados y exigentes en cuanto a la calidad esperada de los productos. Esto lleva a que las empresas sean más eficientes e innovadores en los procesos de producción y comercialización, así como en la diversificación de sus portafolios de productos y mercados. Sin lugar a duda, éste es uno de los mayores desafíos enfrentados por el sector agro en Colombia y para ello se requiere un incremento de las tasas actuales de inversión, favoreciendo el impulso tecnológico y ofreciendo atención prioritaria a la búsqueda y adopción de nuevas alternativas de financiación. En este artículo se resalta el potencial de Colombia en la producción de plátano y se hace énfasis en la necesidad de contar con mecanismos innovadores de financiación para afrontar los problemas actuales de escasez de recursos económicos. Para ello se propone la financiación de productores de plátano a través de la Titularización, con el fin de fortalecer la competitividad del sector y poder aumentar su participación en las exportaciones colombianas.

Social Innovation to Sustain Rural Communities: Overcoming Institutional Challenges in Serbia

Responding to a number of longstanding challenges such as poverty, wide-ranging inequalities, environmental problems, and migration, requires new and creative responses that are often not provided by traditional governments. Social innovations can offer socio-ecological and economic solutions by introducing new practices that reduce social inequalities, disproportionate resource use and foster sustainable development. Understanding the role of social innovations is especially complicated in unstable institutional environments, e.g. in developing countries and countries in transition. This paper analyses nine social innovations in rural areas in Serbia, based on in-depth interviews and document analysis. This analysis reveals factors that facilitate or constrain social innovations whilst simultaneously identifying related formal and informal institutional voids, for example, poor law enforcement, a lack of adequate infrastructure, lack of trust, as well as norms and values that bolster patriarchal systems. The results that emerged from this research show that social innovations are operating in spite of these challenges and are facilitating improvements in a number of the aforementioned challenging areas. Some innovators engage in social entrepreneurship activities because of subsistence-oriented goals, while others follow idealistic or life-style oriented goals, thus creating new social values. Moving beyond these observations, this paper also identifies means to overcome institutional voids, such as creation of context-specific organisational structures, improved legal frameworks, and innovative financial mechanisms.

Securing sustainable funding for viral hepatitis elimination plans.

The majority of people infected with chronic hepatitis C virus (HCV) in the European Union (EU) remain undiagnosed and untreated. During recent years, immigration to EU has further increased HCV prevalence. It has been estimated that, out of the 4.2 million adults affected by HCV infection in the 31 EU/ European Economic Area (EEA) countries, as many as 580000 are migrants. Additionally, HCV is highly prevalent and under addressed in Eastern Europe. In 2013, the introduction of highly effective treatments for HCV with direct-acting antivirals created an unprecedented opportunity to cure almost all patients, reduce HCV transmission and eliminate the disease. However, in many settings, HCV elimination poses a serious challenge for countries' health spending. On 6 June 2018, the Hepatitis B and C Public Policy Association held the 2nd EU HCV Policy summit. It was emphasized that key stakeholders should work collaboratively since only a few countries in the EU are on track to achieve HCV elimination by 2030. In particular, more effort is needed for universal screening. The micro-elimination approach in specific populations is less complex and less costly than country-wide elimination programmes and is an important first step in many settings. Preliminary data suggest that implementation of the World Health Organization (WHO) Global Health Sector Strategy on Viral Hepatitis can be cost saving. However, innovative financing mechanisms are needed to raise funds upfront for scaling up screening, treatment and harm reduction interventions that can lead to HCV elimination by 2030, the stated goal of the WHO.

First social impact bond for the SAMRC: A novel financing strategy to address the health and social challenges facing adolescent girls and young women in South Africa.

A social impact bond (SIB) is an innovative financing mechanism to attract investors to social programmes traditionally funded by governments. In this article, in celebration of the 50th anniversary of the South African Medical Research Council (SAMRC), the authors describe the SAMRC's first foray into this new world of financing through a SIB to improve the health and quality of life of adolescent girls and young women (AGYW). The AGYW SIB is in its preparatory phase and is scheduled for implementation in 2020. The authors describe the mechanism, including financial flows and the process of customising the SIB to meet the needs of AGYW, focusing on HIV prevention and treatment and the prevention and management of unintended pregnancies in schoolgoing AGYW. The authors outline an approach to designing the package of interventions, the metrics associated with such a programme and the business model. It is hypothesised that the proposed approach will lead to an improvement in programmatic outcomes, monitoring and evaluation tools and cost-effectiveness, and will develop key learning data for the future use of SIBs in health service delivery.

Assessment of care provision for hypertension at the emergency Department of an Urban Hospital in Mozambique

BackgroundManagement of hypertension in Mozambique is poor, and rates of control are amongst the lowest in the world. Health system related factors contribute at least partially to this situation, particularly in settings where there is scarcity of resources to address the double burden of infectious and non-communicable diseases. This study aimed to assess the management of hypertension in an emergency department (ED).MethodsDuring a pragmatic and prospective 30-day snapshot study (with 24 h surveillance) and random profiling of one-in-five presentations to the ED of Hospital Geral de Mavalane, Maputo, we assessed patient’s flow and care, as well as health facility’s infrastructure and resources through direct observation. Reports from pharmacy and laboratory stocks were used to assess availability of diagnostics and medicines needed for hypertension management.ResultsThe 1911 hypertensive patients included in the study had several stops during their journey inside the health facility and followed a non-standardized care flow. No clinical protocols or algorithms for risk stratification of hypertension were available. Stock-outs of basic diagnostic tools for risk stratification and medicines were registered. The availability of medicines was 28% on average.ConclusionsCritical gaps in health facility readiness to address arterial hypertension seen in ED were uncovered, including lack of clinical protocols, insufficient availability of diagnostics and essential medicines, as well as low affordability of the families to guaranty continuum of care. Innovative financing mechanisms are needed to support the health system to address hypertension.

The impact of austerity on funding green infrastructure: A DPSIR evaluation of the Liverpool Green & Open Space Review (LG&OSR), UK

Following the introduction of austerity measures by the coalition government in 2010, Local Planning Authorities (LPAs) across the UK were required to take stock of those services that they are legally and financially obliged to deliver. One area directly impacted has been the funding of green infrastructure (GI), which is often considered an “optional extra” in service provision. The financial limitations placed on GI maintenance have a significant influence on both the liveability and quality of urban environments. To address this dilemma this paper contextualises the complexities facing UK cities within a global discussion of GI financing but goes further by presenting an ex-post DPSIR examination of the choices being made by Liverpool City Council (LCC) to fund maintenance. DPSIR is an evaluation process which provides scope to better understand the factors influencing GI at an LPA scale. The paper reflects upon the drivers, pressures and impacts associated with austerity asking what responses are being used by LCC. The paper argues that, although austerity has placed significant constraints on LCC, through the Liverpool Green & Open Space Review (LG&OSR) the city is engaged in an ongoing dialogue pertaining to innovative funding mechanisms. It concludes that, although no single approach can effectively finance GI, a suite of complementary financial models exists, which are transferable between cities addressing current political, socio-economic, and ecological limitations.

Implementing forest landscape restoration in Latin America: Stakeholder perceptions on legal frameworks

Legal frameworks could play a key role in enabling countries to meet their ambitious forest landscape restoration (FLR) targets. In this paper, we examine the perceptions of different types of stakeholders from 17 Latin American countries on aspects of forestry and environmental legal frameworks that enable or hamper FLR interventions at the national level. We first reviewed general, environmental, social and financial aspects of existing legal frameworks in order to provide the basis for a mixed qualitative - quantitative analysis of perceptions. The analysis combines information from semi-structured interviews and a Likert-scale questionnaire given to relevant stakeholders involved in implementing FLR interventions in the countries assessed. We interviewed stakeholders from government, academia, national non-governmental organizations (NGOs) and local private and non-governmental organizations. We found that most legal frameworks are in the jurisdiction of either the agriculture or the environmental sectors. As a whole, we did not find evidence of the kind of legal frameworks articulation needed to enable the coordinated deployment of various forest FLR interventions across landscapes. We found efforts in Brazil, Colombia, Guatemala, Costa Rica, Ecuador and Mexico to improve cross-sectorial communication and legislation, and to develop innovative financial mechanisms to support FLR interventions. In general, interviewees had a positive perception of the content of legal frameworks in their countries; however, they highlighted weak implementation capacities, insufficient funding, sectorial and social conflicts, and lack of transparency as key impediments for policy implementation. Academic and NGO stakeholders perceived the content of the legal frameworks more negatively, whereas government officials were more positive. Different perceptions and the prevalence of cross-sectorial conflicts highlight the importance of efforts aimed at improving governance mechanisms and policy integration in the region. In addition, a targeted effort is needed to develop long-term, funding options that are public, private or mixed, and to disseminate information on the importance of FLR interventions for national economies and human well-being. We consider our results as a preliminary overview of the legal environment for FLR implementation in Latin America.

Marine and coastal protected and conserved areas strategy in Brazil: Context, lessons, challenges, finance, participation, new management models, and first results

Abstract In the last two decades, Brazil has advanced significantly with the expansion and improvement of its national system of protected areas. Until recently most of the expansion was concentrated in the Amazon region (with useful lessons). It also had an uneven ecological representation of coastal and marine ecosystems, concentrated in coastal waters. Despite significant advances, the levels of funding, staff and stakeholders' engagement remain relatively low for such a vast system. Within the past few years, key elements of a new strategy for protection of coastal and marine areas have started to emerge, combined with some participatory processes and a focus on expansion of the total area protected (from <1.5% protection of the country's marine area). These included: a renewed focus on priority areas for conservation; attention to national and international commitments and targets; clarity about the need for partnerships and funding; better engagement of Brazilian society and stakeholders; new, and more collaborative, models of protected areas management and conservation; and openness in the relationships with wider society. Significant results of this effort have started to appear: new large mosaics of oceanic protected areas were created; Amazon mangroves were recognized by the Ramsar Convention; new mangrove protected areas were created, besides other ones proposed; project proposals are under development with partners for better funding and sharing of responsibility; and there is a better engagement with stakeholders. The building of the Brazilian Blue Initiative is underway. The implementation of the proposed 15‐year marine strategy is at its onset: partnerships need to be strengthened and substantial funding is required. It will only be possible to manage the larger system of protected areas if there are more collaborative and innovative models for protected areas and conservation management. These should include partnerships with civil society, local and traditional communities and the private sector, as well as greater engagement of scientists and research institutions, stronger and more qualified tourism, volunteer work, etc. Further innovative funding mechanisms will also be needed along the way.

Coverage of cancer services in Australia and providers\u2019 views on service gaps: findings from a national cross-sectional survey

BackgroundIn response to the increasing cancer prevalence and the evolving health service landscape across the public and private health sectors in Australia, this study aimed to map cancer services and identify factors associated with service provision and important service gaps.MethodsA prospective, cross-sectional survey was conducted throughout 2016. Extensive search strategies identified Government or privately-owned, hospital or community-based healthcare organisations with dedicated cancer services. One nominated staff member from each organisation answered a purpose specific online/paper questionnaire. Descriptive statistics, standardised rates, and single level and multilevel multinomial logistic regression were used to analyse the data. Analysis was augmented with a qualitative descriptive analysis of open-ended questions.ResultsFrom the 295 eligible organisations with a cancer service in Australia, 93.2% participated in the survey. After adjusting for remoteness, for-profit companies were significantly more likely than Government operated services to provide only one or two types of cancer services (e.g. radiotherapy) in a limited range of settings (e.g. day hospital with no in-patient or home care) (p < 0.001) and less likely to provide comprehensive cancer services (p < 0.001). After adjusting for ownership and the respondent’s role in the organisation, respondents located in remote regions of Australia were more likely to identify cancer services that are dependent upon specialist medical practitioners as the most important service gaps in their region (p = 0.003). Despite 76.0% of organisations across Australia offering some type of supportive care or survivorship services, providers identified this group of services as the most pressing service gaps in major cities, rural and remote regions alike (standardised rate: 47.9% (95%CI: 43.6–57.4%); p < .000). This included the need for improved integration, outreach and affordability.ConclusionsThe broad range of cancer services, settings and ownership identified by this survey highlights the complexity of the Australian healthcare system that cancer survivors must navigate and the challenges of providing comprehensive cancer care particularly in rural and remote regions. Whilst the significant role of supportive care and survivorship services are increasingly being recognised, the findings from this survey support calls for innovative service models and funding mechanisms that expand the focus from preventing and treating cancer to supporting cancer survivors throughout the cancer continuum and promoting the delivery of integrated and equitable cancer care across the public and private sectors.

Why ‘blended finance’ could help transitions to sustainable landscapes: Lessons from the Unlocking Forest Finance project

There is a momentum towards finding financing solutions for halting deforestation at the landscape level for the benefit of climate, biodiversity and delivery of ecosystem services. The Unlocking Forest Finance (UFF) project has, between 2013 and 2018, worked on the development of innovative financing mechanisms for sustainable landscapes in three sub-national Amazon regions of Brazil (Acre and Mato Grosso) and Peru (San Martín). This paper describes the approach of the UFF project as a case study of sustainable landscape financing, and portrays the key evolutions during the process. Relying on a reflection and consultation process among project partners, the paper then derives a set of lessons for sustainable landscape finance. It illustrates the current mismatch between the demand side of private ‘impact’ investors (i.e., those who look for social and environmental impact of investments beyond financial return) and the supply side of sustainable land use investments on the ground. The paper discusses how ‘blended finance’ models that combine funding from commercial, public, and philanthropic sources could contribute to financing sustainable landscapes.

PO 8569 INNOVATIVE DOMESTIC FINANCING FOR HEALTH RESEARCH &amp; DEVELOPMENT IN THE EAST AFRICAN COMMUNITY

BackgroundAccess to domestic financial resources is a pre-requisite for strengthening health research and development (R&amp;D). Therefore, the East African Health Research Commission (EAHRC) commissioned a study to assess the financial needs of the East African Community (EAC) region and propose innovative domestic financing mechanisms for R and D in East Africa.MethodsThis study used a four-pronged approach as follows: a desk review of secondary data, followed by a survey to collect quantitative data from health R&amp;D organisations and relevant ministries, followed by key informant interviews and, finally, a validation workshop. The study used 2014–2015 as the baseline year.ResultsOnly 51 out of 160 organisations responded to the survey. Using triangulation of desk reviews, national budgets documents and reported organisational budgets, the annual investment in health R&amp;D in the EAC is estimated at USD 301.71 million of which 86% is financed from external sources. The share of health R&amp;D financing in the GDP and health budget stood at 0.21% and 1.27% respectively, while the share of domestic financing of health R&amp;D to GDP was as low as 0.03%The innovative domestic financing options suggested included: allocation of 10% of the USD 560 million of the sin-taxes collected; taxing 1% of the estimated USD 3 billion from inward remittances; fundraising for at least 2.5% of the USD 18.67 private sector investment in corporate social responsibility; issuing social impact bonds and the EAC Health Research Fund with an estimated annual performance of USD 20 million.ConclusionIn order to sustain health R&amp;D investments in EAC, the EAHRC proposes to develop a 10 year domestic financing roadmap using a strategic mix of tax- and non-tax-based innovations.

Revisiting aid dependency for HIV programs in Sub-Saharan Africa

ObjectiveThe overall increase in global domestic HIV expenditure obscures the specific performances of many sub-Saharan Africa (SSA) countries in local resourcing of their HIV programs. In this study, we explored the pattern and correlates of domestic HIV expenditure in SSA. Study designThis is a cross-sectional ecological study. MethodsData were obtained from the Joint United Nations Programme on HIV/AIDS, World Bank, and the World Health Organization. We included 30 countries with available country-reported HIV expenditures between 2012 and 2017. From the most recent data, we examined the domestic (public and private) HIV expenditure as percentage of the total HIV expenditure. Using Spearman's rho, we assessed the correlation between domestic expenditure as percentage of the total HIV expenditure and HIV prevalence, antiretroviral coverage, gross national income (GNI) per capita, domestic general government health expenditure (GGHE-D) as percentage of general government expenditure, and GGHE-D per capita. Significant correlates at bivariate level were included in a multivariate median regression model. ResultsThe median domestic HIV expenditure as percentage of the total HIV expenditure was 24.9% (interquartile range [IQR]: 8.5–39.3%). In 15 of 30 (50%) countries, domestic HIV expenditure as percentage of the total HIV expenditure was ≤25%. In 23 of 30 (77%) countries, public source accounted for >75% of the domestic HIV expenditure. There was a significant positive correlation between domestic expenditure as percentage of total HIV expenditure and GNI per capita (r = 0.52, P = 0.003) and GGHE-D per capita (r = 0.494, P = 0.005). In the multivariate median regression model, only GNI per capita remained statistically significant (β = 0.006, P = 0.004). ConclusionsSome countries in SSA are still overly dependent on external support for their HIV response. Although increasing domestic HIV expenditure in these countries may require growth in the economy, governments can improve the fiscal space for HIV response by looking inward for innovative and sustainable funding mechanisms.

3432 Stanford MedTech: An Innovative CTSA-Supported Pilot Program

OBJECTIVES/SPECIFIC AIMS: Helping researchers assess and effectively translate innovations into healthcare improvements is a complex process (Terry et. al., 2013). The Clinical Translational Science Awards (CTSA)—supported by the National Institute of Health (NIH) under the auspices of the National Center for Advancing Translational Sciences (NCATS)— provide the resources and support needed to strengthen our nation’s clinical and translational research (CTR) enterprise. In 2008, Stanford University was awarded a CTSA from the NIH, establishing Spectrum (the Stanford Center for Clinical and Translational Research and Education). Under the Spectrum umbrella, the Byers Center for Biodesign manages the MedTech Pilot Program with the goal of translating discoveries into novel health technologies that address important unmet health needs. The MedTech Pilot Program is an innovative funding mechanism that seeks to (1) stimulate clinical translational research, (2) help promising projects bridge the gap between the bench and the patients’ bedside, and (3) encourage collaborative, transdisciplinary work. Specifically, the Pilot Program offers up to $50,000 to support projects involving medical devices and mobile technologies used for (1) therapeutic applications and (2) device-based patient-specific (or POC) diagnostic applications. This analysis of the MedTech Pilot Program will: 1) describe the Program’s structure and process; 2) highlight the intensive, hands-on mentorship and practical guidance awardees receive that enables them to more efficiently and effectively advance their projects toward patient care; and 3) characterize the progress of the 36 funded projects. METHODS/STUDY POPULATION: Key elements of the Pilot Program’s infrastructure and mentoring processes as they relate to project outcomes were identified. Additionally, outcomes data were collected from two sources: (1) annual survey of Pilot Awardees and (2) publicly available information relevant to the pilot projects. RESULTS/ANTICIPATED RESULTS: The Pilot Program’s framework and infrastructure has supported a diverse group of transdisciplinary projects. These projects were evaluated using both traditional and non-traditional metrics (e.g., patents, startups, publications). The initial investment of $1.5 million to fund 36 projects has led to over $88 million dollars in additional funding. Additionally, taking full advantage of the expertise in Silicon Valley, strong mentorship has helped advance projects along the clinical and translational path. DISCUSSION/SIGNIFICANCE OF IMPACT: The Pilot Program has benefited Stanford innovators and researchers by providing seed funding to help promising projects bridge the gap between the bench and the bedside. The intensive, hands-on mentorship, early pilot funding, and practical guidance pilot awardees receive effectively help translate their technologies into patient care.

AN INNOVATIVE FINANCING INSTRUMENT TO PROMOTE THE DEVELOPMENT OF ISLAMIC MICROFINANCE THROUGH SOCIALLY RESPONSIBLE INVESTMENT SUKUK

Purpose: Socially responsible investment (SRI) sukuk has a high potential to be an innovative financing mechanism for Islamic microfinance. This paper explores the possibility of implementing SRI sukuk for raising funds to support the microfinance industry and to promote financial inclusion. It also aims to identify the associated issues and challenges in implementing the SRI sukuk for microfinance purpose.&#x0D; &#x0D; Methodology: The paper uses qualitative research method through a thorough review of existing literature, archives, and library research related to the area of social, sustainable and responsible investment sukuk, Islamic microfinance and their related issues.&#x0D; &#x0D; Findings: The SRI sukuk has a high potential to be developed as innovative shariah-compliant mechanism as shown by Malaysian experience in issuing the SRI sukuk to develop socially-related projects including the educational and green energy sectors. The paper also highlights and learn from the successful experience of the European Bank for Reconstruction and Development in issuing the first microfinance bonds.&#x0D; &#x0D; Significance/Originality: The findings from this study provide inputs to the relevant stakeholders in implementing new financial tools to develop the social sector, especially Islamic microfinance in helping the poor and assist them to become economically independent. New innovative tools for raising funds in microfinance is highly needed to achieve sustainability of the microfinance industry.&#x0D; Type of paper: Research paper

A Model Multilateral Treaty for the Encouragement of Investment in Climate Change Mitigation and Adaptation

The Paris Agreement sets out to limit global warming to below 2°C, yet the pathway to reach that goal is unclear. This specifically applies to the mobilization of investment for climate change mitigation and adaptation. One way to mobilize foreign investments is to create a favourable investment climate with the help of multilateral investment treaties. In this article, a model treaty is proposed to considerably increase climate-friendly investments while maintaining regulatory flexibility for signatory states. Building on Design Thinking principles, key challenges for the success of such a treaty are identified and provisions are crafted incorporating feedback from twenty-five experts from finance, policy, and legal domains. The proposal addresses four key challenges: (1) define climate change mitigation and adaptation investments; (2) decrease the barrier of limited access to capital due to perceived and actual risks; (3) combat insufficient investor trust in long-term contracts; and (4) retain states’ ability to regulate. The treaty proposal addresses these challenges by proposing, inter alia, a definition for mitigation and adaptation investments that establishes a link to the Nationally Determined Contributions under the Paris Agreement, an innovative financing mechanism, a conversion of host country subsidies to investment grants, and a performance verification using latest distributed ledger technology.