Banking on Impact: What You Need to Know about Results-Based Financing

Malagasy Family

The World Bank's external website features an article describing how results-based financing is being considered as a tool to help meet the UN Sustainable Development Goals by the year 2030: 

"From investing in health and education to providing water and sanitation, developing countries need $3.9 trillion each year to power their efforts toward the Sustainable Development Goals (SDGs) by 2030. However, with $1.4 trillion invested in development each year, the annual investment gap remains high at $2.5 trillion.

To fill the financing gap, countries have increasingly adopted results-based financing, or RBF, as an innovative and effective approach to funding infrastructure and services. This approach has risen to the challenge in the last decade, growing to a market of over $25 billion in development spending.

What is results-based financing, and why is it gaining ground in global development?

In short, results-based financing is banking on development impact. RBF ensures that development funding is linked to pre-agreed and verified results, and that funding is provided when the results are achieved. Through a range of mechanisms, RBF helps deliver development outcomes, improves accountability, and drives both innovation and efficiency."

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