Helping Countries Finance the SDGs: Palladium Awarded USAID IDIQ
Experts estimate a $2.5 trillion gap between current funding levels and what it will take to accomplish the UN's Sustainable Development Goals (SDGs). USAID and Palladium are working to help developing countries bridge this gap with a new IDIQ contract.
In 2015, the international community committed to supporting 17 Sustainable Development Goals (SDGs) to bring about an end to poverty and achieve other profound social and environmental outcomes in developing countries by 2030. But the resources available to reach these goals fall short by an estimated $2.5 trillion each year. How can this gap be filled? Two ways are by developing public resources and mobilising finance from the private sector. Donors such as the U.S. Agency for International Development (USAID) help developing country governments collect revenue more effectively and use public funds more wisely. They also help attract more private investment to developing countries, including by blending public and private resources in the form of partnerships and blended financing.
Palladium has won a global USAID contract to help countries fill this SDG funding gap: USAID’s Public Financial Management (PFM) II "Indefinite Delivery Indefinite Quantity" (IDIQ) umbrella contract. PFM II gives USAID an efficient mechanism to gain access to a select group of pre-vetted firms known for their expertise in public sector financial management, private sector capital mobilization, and blended finance. By being part of this select group of just 12 pre-qualified firms, Palladium will be able to bid and compete for USAID contracts in economic policy, trade, investment, tax reform, and to overall support more transparent and accountable management of public resources.
Palladium’s Innovative Financing Expertise
Palladium is at the forefront of applying innovative financing mechanisms such as blended finance, impact investing, development impact bonds (DIBs), and Global Development Alliances to help solve global challenges and address the SDG finance gap. We have used these and other mechanisms to enhance domestic resource mobilisation by promoting private sector investment to complement donor and local resources, and bring private sector know-how to address persistent development challenges across healthcare, education, clean energy, and water. Palladium is unique in that we manage our own impact investment fund, and we have developed the world’s first healthcare development impact bond.
Our strength in leveraging private capital for sectors that have traditionally been unable to access finance is evident in our mobilisation of $167M in financing to Northern Ghana’s maize, rice, and soy sectors, compared to the $70M life of project goal. We were recently awarded the Kenya Investment Mechanism to help Kenya mobilize $400M in equity and debt to finance livestock, dairy, horticulture, and clean energy activities.