Zero Gap is a collection of bold ideas that we have sourced from around the world for how to scale funding for critical development objectives such as energy access in Sub-Saharan Africa or restoring natural infrastructure in the Americas. A core value of Zero Gap is that finance can be a powerful tool for good. Imagine a forest resilience bond investing in wildfire prevention in California, a micro-levy that creates a stable funding stream for alleviating malnutrition in Africa, or insurance being harnessed to not only respond to the next Ebola crisis but also to ensure better preparation for disease outbreaks.
To fully unlock the potential of innovative finance, new financial mechanisms must be structured to meet the needs of investors such as return on investment, level of risk, and portfolio diversification. To encourage investors to go from allocating billions of dollars for social good to trillions we need to align with financial principles without sacrificing the social or environmental objectives. For example, investments that provide poor and vulnerable people with access to energy must also meet the risk/return expectations of institutional investors. To be successful, we must continue to structure these financial mechanisms for and with the international financial community.
The only way to close development’s precarious funding gap is to make a sustained commitment to innovation — innovation in developing novel financing mechanisms and enabling public policy interventions that collectively have the power to mobilize new and additional private sector capital. This collection of essays draws on the expertise of practitioners and leading thinkers in the innovative finance field to explore the role of global capital markets in driving social impact and the underlying policy framework required to foster greater collaboration between the private and public systems.