Pipeline
| ID | INDIGO-PL-0029 |
|---|---|
| Project Name - (Value) | Armenia Dairy Productivity DIB |
| Contact - Name - (Value) | Peter Nicholas |
| Contact - Email - (Value) | Peter.Nicholas@socialfinance.org.uk |
| State of Development - (Value) | Current |
| State of Development - (Source ID's) | source1 |
| Stage of Development - (Value) | Early stage |
| Stage of Development - (Source ID's) | source1 |
| Stage of Development - (Notes) | In mid to late stages with first iteration of design having been largely completed. Funders needed and then looking to engage service providers to co-create and finalise the design |
| Type of instrument and project - Impact Bond - (Value) | Yes |
| Type of instrument and project - Outcomes Fund - (Value) | No |
| Type of instrument and project - Social Impact Incentives (SIINC) - (Value) | No |
| Type of instrument and project - Social Impact Guarantee - (Value) | No |
| Type of instrument and project - Payment-by-results (no pre-financing) - (Value) | No |
| Type of instrument and project - Technical Assistance and Market-building program (Must involve dedicated grant resources) - (Value) | No |
| (Source ID's) | source1 |
| Part of a larger outcomes-based financing program? - Part of a larger outcomes-based financing program? - (Value) | No |
| Part of a larger outcomes-based financing program? - (Source ID's) | source1 |
| Dates - Expected Launch Date - (Value) | Q2 - 2023 or later |
| Dates - Total expected project development time - (Value) | >24 months |
| Dates - Expected length of project (years) - (Value) | 6 |
| Dates - Project design process began - (Value) | 2020/2021 |
| Dates - (Source ID's) | source1 |
| Rationale for using outcome based finance - (Value) | An impact bond aligns partners around shared incentives and associated accountability which is necessary to solve the inter-related market failures in Shirak dairy production leaving many smallholders without an avenue to earn their wayout of poverty. Rigorous monitoring and focus on outcomes measurement in an impact bond allows the programme to focus on changes in household income net of production costs, producing a more realistic measure of impact than other programmes. In an area where multiple interventions have not achieved sustained impact, an impact bond provides the flexibility to innovate in service delivery as well as strong feedback loops to understand what works. This is complemented by a focus on value for money which has been lacking in a number of other input-driven agricultural progammes. |
| (Source ID's) | source1 |
| Key challenges to launch - (Value) | 1. The complexity of the issues area and number of interrelated challenges makes the context of operation complex 2. A lack of publicly available data on smallholder numbers, costs and intervention costs means that further iterations of the programme design and payment mechanism will be necessary 3. Lack of infrastructure and applicable public and private financial mechanisms to secure the sustainability of activities to be implemented during the project |
| (Source ID's) | source1 |
| Role of the domestic government - Outcomes funder - (Value) | No |
| Role of the domestic government - Service provider - (Value) | No |
| Role of the domestic government - Member of project committee - (Value) | Yes |
| Role of the domestic government - No formal role - (Value) | No |
| (Source ID's) | source1 |
| Service providers identified and selected - Request-for-proposals - (Value) | Yes |
| Service providers identified and selected - Direct contracting by outcome funder/investor/intermediary - (Value) | No |
| Service providers identified and selected - Provider-led deal development - (Value) | No |
| Service providers identified and selected - Other - (Value) | Service providers not yet selected . The procurement process has not been finalised but is anticipated to be open procurement following an RFP, potentially with an EOI stage before that |
| (Source ID's) | source1 |
| Feasibility study - (Value) | Yes |
| (Source ID's) | source1 |
| Proposed financing instruments - Debt - (Value) | No |
| Proposed financing instruments - Equity - (Value) | No |
| Proposed financing instruments - Guarantee - (Value) | No |
| Proposed financing instruments - Grant - (Value) | No |
| (Source ID's) | source1 |
| Technical assistance grant - Technical assistance grant - (Value) | Yes |
| Technical assistance grant - (Source ID's) | source1 |
| Overall project finance - Estimated Maximum potential outcome payment - Currency - (Value) | USD |
| Overall project finance - Estimated Maximum potential outcome payment - Amount - (Value) | 4000000 |
| Overall project finance - (Source ID's) | source1 |
| Purpose and classifications - Social/Developmental challenge - (Value) | The poverty rate in the Shirak region is significantly higher than the Armenian average and agriculture, particularly dairy farming, is a key source of income. Dairy farming is however charactrised by low-input subsistence activity that leads to persistently high levels of smallholder poverty, indebtedness and outward migration. Low dairy productivity coupled with market failures in the dairy value chain mean that the market operates at a low-level equilibrium of poor quality and low prices, with little possibility of smallholders being able to pull themselves out of poverty |
| Purpose and classifications - Expected intervention model - (Value) | Holistic intervention that could include a multifaceted service package designed across four pillars of infrastructure, agricultural practices, operations and market linkages: 1) Infrastructure: provide capital for processor and/or smallholder infrastructure investments, acting as co-finance where existing grant-programmes exist. 2) Agricultural practices: provide training and vet services to improve smallholder practices. 3) Operations: provide temporary input subsidies, which could be used to de-risk the additional costs associated with adopting new on-farm practices. 4) Market linkages: support the development of market infrastructure/systems to promote quality-responsive milk pricing from processors, including the potential introduction of milk collection and cooling points. |
| Purpose and classifications - Policy sector - Employment and private sector development - (Value) | Yes |
| Purpose and classifications - Policy sector - Education - (Value) | No |
| Purpose and classifications - Policy sector - Social protection - (Value) | No |
| Purpose and classifications - Policy sector - Criminal justice - (Value) | No |
| Purpose and classifications - Policy sector - Health - (Value) | No |
| Purpose and classifications - Policy sector - Agriculture - (Value) | Yes |
| Purpose and classifications - Policy sector - Environment and climate change - (Value) | No |
| Purpose and classifications - Policy sector - Water, Sanitation and Hygiene - (Value) | No |
| Purpose and classifications - Policy sector - Energy - (Value) | No |
| Purpose and classifications - Policy sector - Humanitarian - (Value) | No |
| Purpose and classifications - Secondary SDG goals - (Value) | 1, 2, 3, 8, 9, 10, 11, 12, 15, 17 |
| Purpose and classifications - (Source ID's) | source1 |
| Service users and beneficiaries - Target population - (Value) | Dairy processors and smallholders (with between 3 and 19 cows) in Shirak |
| Service users and beneficiaries - Targeted number of unique service users or beneficiaries (total) - (Value) | 2708 |
| Service users and beneficiaries - Unit type of targeted service users or beneficiaries - (Value) | Individual |
| Service users and beneficiaries - Country Classification of Service and beneficiaries - Low-income - (Value) | No |
| Service users and beneficiaries - Country Classification of Service and beneficiaries - Lower-middle-income - (Value) | No |
| Service users and beneficiaries - Country Classification of Service and beneficiaries - Upper-middle-income - (Value) | Yes |
| Service users and beneficiaries - Country Classification of Service and beneficiaries - High-income - (Value) | No |
| Service users and beneficiaries - (Source ID's) | source1 |
| Service users and beneficiaries - (Notes) | Approximately 2,700 smallholders and 8 dairy processors |
| Notes - (Value) | Data for this pipeline project was last updated in April 2022. |
| Delivery Locations 1: Location - Name - (Value) | Shirak, Armenia |
| Delivery Locations 1: Location - Country - (Value) | AM |
| Delivery Locations 1: Lat/Lng - Lat - (Value) | 40.0691 |
| Delivery Locations 1: Lat/Lng - Lng - (Value) | 45.0382 |
| Delivery Locations 1: Notes | Shirak |
| Sources 1: Id | source1 |
| Sources 1: Name - (Value) | Data shared by key stakeholders of the project through March 2022 Levoca questionnaire |
| Investments 1: Notes | TBD |
| Intermediary services 1: Organisation Role Category - (Value) | Other |
| Intermediary services 1: Notes | Advisor - UNDP, Social Finance |
| Intermediary services 2: Organisation Role Category - (Value) | Other |
| Intermediary services 2: Notes | Other - EBRD, UNDP, Government of the Slovak Republic |
| Outcome Metrics 1: Outcome Definition - (Value) | Animal welfare improvement: instances of satisfactory animal welfare standards being met. Improved milk quality: proportion of smallholders achieving sustained quality in their milk production. Formalization of Milk Collection and Cooling Points - processor linkages: establishing a formal contract between milk collection and cooling points and processors and enhance export readiness. Income per household, net of production costs: increase in household income measured against a baseline taken at the beginning of the programme. Reduction of poverty and migration levels |
| Outcome Metrics 1: Outcome validation Method - (Value) | Non-experimental |