International Assistance Innovation Program
Thank you for your interest in the International Assistance Innovation Program. We continue to adjust how we implement this pilot program. We are now using a more directive programming approach. We are not currently seeking unsolicited concept notes and we are unfortunately unable to respond to all submissions received.
What we do
Canada has allocated over $900 million in funding for the International Assistance Innovation Program (IAIP). This five-year pilot program (2019- 2024) makes targeted investments to help mobilize additional private investments in developing countries that will help achieve the Sustainable Development Goals.
Canada recognizes the fundamental contribution of the private sector to driving job creation, innovation, productivity and economic growth in developing countries. However, private investors are often reluctant to make investments in developing countries because of actual or perceived risk. High-potential companies in developing countries are unable to access the financing they need to grow their businesses.
Through the IAIP, we make targeted, repayable investments – together with other private and public partners – in high-impact projects in developing countries. We are willing to take a higher risk with our funding. This makes it possible for private and commercial investors to invest and make their money work in developing countries, for both financial returns and development impact. In investment terms, we can take a more junior investment position with IAIP funding, helping to de-risk investments by more senior investors.
By using development assistance in this way, the IAIP mobilizes additional private funding to support sustainable development. It also makes it possible for Canada to collaborate with new partners to mobilize additional resources for development.
For example, our IAIP projects to date have supported a Gender Smart Covid-19 Response Facility to aid micro, small and medium enterprises in the Caribbean, Latin America, and Sub-Saharan Africa and an impact investment fund along with technical assistance to increase finance for small and medium-sized businesses in the world’ s least developed countries.
The International Assistance Innovation Program (IAIP) has three main objectives:
- Market Building through pro-poor investments: Our investments help to overcome market barriers that prevent private capital from reaching developing country markets to support the Sustainable Development Goals and benefit the poor and most vulnerable.
- Mobilizing public and private finance for sustainable development: Our investments have a systemic impact by leveraging additional public and private capital through innovative and scalable solutions for sustainable development.
- Promoting Gender Equality: Our investments apply a gender lens to promote gender equality and improved development outcomes for all while contributing to the advancement of the field of gender lens investing. The IAIP will support investments that have the greatest potential to reduce gender inequalities, and promote women’s economic empowerment.
Our approach to funding
IAIP funding must be repaid to the Government of Canada under most conditions. The IAIP has two main funding types:
- Unconditionally repayable contributions (URCs)
Most of our IAIP funding is allocated for contributions to projects that the recipient must repay without qualification. In finance terms, this funding is similar to break-even risk capital.
This is our main funding type, which we use to reach vulnerable populations in relatively stable development contexts, such as middle-income countries.
We assess every investment opportunity on its own merits, but some key characteristics of a URC funding opportunity would include:
- Conditionally repayable contributions (CRCs)
We also have a limited amount of IAIP funding available for contributions to projects that the recipient must repay only if specified conditions materialize. This funding is similar to concessional risk capital.
This type of financing allows us to take on a higher degree of financial risk in more challenging or unpredictable development contexts, such as least-developed countries.
We assess each investment opportunity on its own merits, but some characteristics of a CRC funding opportunity would include:
The IAIP also has a limited amount of grant funding available for technical assistance to facilitate implementation of programming supported by repayable contributions.
We work with experienced private sector partners for IAIP programming, in order to mobilize additional capital for the Sustainable Development Goals. This includes partners with a proven track record and risk management experience, in addition to sufficient financial capacity relative to the proposed investment.
While we will primarily seek private sector partnerships, we also work with not-for profit organizations, development banks and local institutions may consider opportunities for partnerships.
We prioritize investments that have a sustainable development impact, can demonstrate financial sustainability, and will generate results that would otherwise not be possible without IAIP funding. We will not contribute IAIP funding if it will displace other commercial forms of financing.
All IAIP initiatives will reflect a thorough gender analysis consistent with GBA+ and Gender Equality Toolkit methodologies, with the results of this analysis informing the final design of the initiative. IAIP initiatives will proceed only if the blended finance structure can be demonstrated to maximize sustainable development impact, with clearly defined development objectives, expected results, and measurable performance indicators.
Further details of the IAIP’s operational programming can be found on Global Affairs Canada’s Project Browser.
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