Innovative Finance for Mine Action: the Wilton Park conference

The FCDO’s Demining Team and the UK Mission Geneva partnered with our colleagues at Wilton Park to organise a Conference on Innovative Finance for Mine Action at Wiston House on 7 to 9 March.

States Parties to both the Anti-Personnel Mine Ban Convention (APMBC) and the Convention on Cluster Munitions (CCM) have committed to explore alternative and new sources of funding for mine action. To support those commitments, our Conference’s key aims were to raise awareness of the mine action sector’s desire to:

• explore innovative finance options
• forge connections with the impact finance and development sectors
• assess the appropriateness of the different options, and
• plot a way forward to piloting one or more of the structures

In order to further these aims, we brought together:

• representatives from the mine action sector, such as Geneva International Centre for Demining (GICHD), the HALO Trust, Mines Advisory Group (MAG), and United Nations Mine Action Service (UNMAS)
• major donors: Norway, the Netherlands, the United Kingdom and the United States
• mine affected countries: Angola, Cambodia, and Lebanon
• the implementation support units of the 2 Conventions, APMBC and CCM
• the humanitarian sector: International Committee of the Red Cross (ICRC), The International Federation of Red Cross and Red Crescent Societies (IFRC), Humanity and Inclusion
• the financial sector: European Bank for Reconstruction and Development (EBRD), International Finance Facility for Immunisation (IFFIm), Social Finance, Stone Family Foundation
• organisations that monitor and evaluate projects: Ecorys, Itad

We started by considering the challenges facing the sector. Lack of funding and the low level of capacity of many affected states means that finding alternative and new sources of funding is key. We then looked at how outcomes based financing worked in other sectors – learning lessons from an impact bond for skills training for employment in Palestine and from the ICRC’s Humanitarian Impact Bond funding physical rehabilitation centres. We also learnt about the pros and cons of Development Impact Bonds from their evaluators. We learned how IFFIm uses vaccine bonds to make money available immediately to GAVI, the Vaccine Alliance, by frontloading long-term sovereign pledges. We then used breakout sessions to consider whether these models could be applied to country specific contexts.

On the final day we focused specifically on Cambodia, hearing from their Mine Action Authority and mine clearance operators on the ground. We also heard about other innovative financing structures being used in Cambodia by the Stone Family Foundation in the water sector.

So what did we learn? A lot, and certainly too much to put in this blog. Here are some of my key takeaways:

• the innovative finance options we explored do offer potential under the right circumstances to leverage more money into the mine action sector, and to use it in a more impactful way
• an alternative structure to the traditional grant funding will not always be needed or desirable – outcomes financing can improve effectiveness and efficiency, but if there is no implementation problem that needs to be solved, then there is no need to fix it. Impact bonds can be complex and costly to set up, and have higher administrative costs, so there needs to be a real, identifiable benefit to structuring it that way
• similarly, whilst in certain circumstances the new structures we explored may be able to obtain greater impact from existing money, the greater benefit to these structures should be to bring in new sources of funding
• any structure must have a people-centred approach, following the principles of do no harm and leave no one behind. Any structure that involves the transfer of land must, as now, beware of local sensitivities around land ownership
• linking mine action to development financing (for example eco-tourism in Angola) has great potential to attract investors, but it will require a whole of government approach, especially from the affected country, but also from donor governments
• a frontloading model may be appropriate for an affected country that needs help to get over the line, but some donors may not be able to make the long-term pledges required

Finally, and perhaps crucially, is the question of who will drive the putting into place of one of these structures? National ownership will be key, but mine action authorities will need their traditional bilateral donors to come together with the implementers and potential investors to design a structure that works for them. For our part, we are actively looking to start a pilot project, hopefully in Cambodia.