DIB I was launched to create sustained employment opportunities for Palestinian youth through tailored, demand-driven employment programs. Unlike traditional training initiatives, this results-based financing model emphasizes job placement and long-term employment outcomes rather than training alone.
It creates incentives for local partners to help them focus on employment and not run any training unless there are vacancies waiting for the trained youth.
Services include in-class and hands-on skills training, internships, coaching, mentoring, job placement support, and in-work support.
Investors
Through their DIB manager, take the financial risk, provide upfront working capital, implementation oversight and accountability, challenging the DIB manager (and Services Providers) to maximize jobs, while allowing for flexibility in Palestine’s fast changing and fragile context.
DIB I was backed by four key investors:
- Palestine Investment Fund (PIF)
- European Bank for Reconstruction and Development (EBRD)
- Dutch Entrepreneurial Development Bank (FMO)
- Chilean Palestinian Diaspora Investment Fund “Semilla de Olivo”
Outcomes Funders
Outcomes funders promise to pay if certain results are achieved, providing outcomes funding, strategic direction, determine target beneficiaries and service parameters, and review and approve all proposed Service Provides Proposals.
The outcomes were funded by the Ministry of Finance through the Finance for Jobs (F4J) project, implemented by DAI with support from the World Bank.
During the design phase of the Development Impact Bond (DIB), DAI engaged Social Finance UK to lead the overall structuring and design of the DIB model. As part of this process, Social Finance identified and helped mobilize the participation of four DIB investors. Building on its pivotal role in the design phase, Social Finance later served as the international advisor supporting the implementation of DIB I.
How It Works
The investment financed Service Providers (SPs) that implemented employment-focused projects. These programs were designed to help youth secure sustained jobs for a minimum of six months. By prioritizing employment over training, the DIB model created the right incentives for SPs: training was only provided when an employer with a vacancy was ready to hire a skilled youth.
This approach not only increased the impact of the projects but also shifted the culture of employment services in Palestine towards results, not outputs.
Impact
Under DIB I, nine different projects were implemented across diverse sectors, targeting unemployed Palestinian youth and ensuring at least 30% female participation. The programs served youth from a variety of educational and professional backgrounds through partnerships with the following Service Providers:
- Education for Employment (EFE): Nursing and health sector employment, finance, microfinance, and value chain programs
- Juzoor for Health & Social Development: Internship program for doctors
- Palestine Engineers Association (PEA): Health & safety specialists program
- Center for Continuing Education at Birzeit University (CCE/BZU): Teachers and education sector employment program
- Palestine Construction Industries Union (PCIU): Materials quality assurance specialists & construction-related employment
- Palestinian Vision (PalVision): Commercial and business skills employment program
- Juhoud for Community and Rural Development: Furniture sector employment program (carpentry, upholstery)
- Palestinian Information Technology Association of Companies (PITA): Tech Savvy program
