A Reed Smith team led by London-based structured finance partner Ranajoy Basu advised the British Asian Trust (“BAT”) - a charity set up by the Prince of Wales - on the legal and structuring aspects of an $11 million DIB which aims to improve the literacy and numeracy learning standards of approximately 300,000 primary school students from marginalised communities in the State of Gujarat and the National Capital Region in India. The total raised to date is $11 million. This is the successful first close and the intention is to double the DIB in size in the coming years.
UBS Optimus Foundation (“Optimus”) provided the upfront risk capital to three different service providers who will implement the project on the ground in India over four years. BAT, the Michael & Susan Dell Foundation and Tata Trusts were the outcome funders, providing outcome payments to Optimus only upon the achievement of certain pre-determined target outcomes, as evaluated by an independent outcome evaluator.
The UK Government’s Department for International Development is the technical assistance partner for the DIB, providing funding for programme management, legal advice, advocacy, evaluation and acting as overall thought partner, bringing experience from other DIB programmes it has been involved in. BAT, on this DIB, is being funded by Comic Relief, the Mittal Foundation, and BT (British Telecom).
The Reed Smith team consisted of counsel Andrzej Janiszewski and associates Priya Taneja and Richelle Teo, all based in London and in the FIG practice, with support from the firm’s tax, employment, corporate and IP lawyers.
Ranajoy Basu commented saying “We are delighted to have been given the opportunity to advise the British Asian Trust on this innovative financing structure. It is very encouraging to see such transactions growing in scale and being seen as an attractive solution towards targeting social interventions in some of the remotest parts of the world. The transaction marks an important step towards the evolution of development impact bonds.”
This is the latest matter that the firm’s social impact finance practice has advised Optimus. In December 2017, Reed Smith advised Optimus and Palladium International Limited on the formation of the world's first healthcare development impact bond, aimed to reduce maternal and infant mortality in Rajasthan, India.
Reed Smith’s social impact finance practice focuses on increasing access to funding for organizations that deliver both economic and social returns, such as microfinance institutions, impact investment funds and other social enterprises. The practice has deep experience in handling complex, cross border transactions, and regularly advises on a range of social impact initiatives, including the establishment of funds, innovative investment structures, social impact bonds and other capital market solutions.
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