Pioneering Skill Impact Bond Invests in Indian Women and Workforce - McDermott Will & Emery

Pioneering Skill Impact Bond Invests in Indian Women and Workforce


In the immediate wake of the COVID-19 pandemic, women and young people in India disproportionately suffered economic fallout. A woman was eight times more likely than a man to lose her job during India’s lockdown, and of the millions pushed out of the workforce, young people were hit harder than adults aged 25 and older.

These ripple effects of the virus knocked India off course in reaching its UN Sustainable Development goals related to employment and gender.


By June 2020, just a few months into the crisis, the British Asian Trust (BAT)—a nonprofit organization founded to address poverty, inequality and injustice in South Asia—had recognized the need for intervention.

To help Indian women and young job seekers regain their footing, BAT rallied public and private sector partners around the world to participate in a first-of-its-kind Skill Impact Bond providing 50,000 young people in India with job training across industries and access to wage-earning employment. Addressing the gender impact of COVID-19, 60% of the impact bond’s beneficiaries will be women and girls.

As they made plans to begin the lengthy, complicated process of structuring an impact bond targeting this new type of intervention, skills development with a gender-specific investment, BAT turned to its longtime legal counsel at McDermott: a London-based team led by Ranajoy Basu and Priya Taneja.


Serving as international counsel on behalf of BAT, the McDermott team partnered with local Indian counsel to oversee and guide the creation of a highly complex Skill Impact Bond with contracts governed by both Indian and English law.

The team was under pressure to get it right: As the first gender-focused cross-border investment in India, and the largest development impact bond ever to target gender-based investing, this legal work laid the foundation and set the structure for future skills- and gender-focused impact bonds.


The legal teams successfully collaborated with BAT to design and launch a market-making $14.4 million Skill Impact Bond with two unique features: First, unlike other impact bonds, it catalyzes entrepreneurship. Second, it creates a model for gender-lens investing with the target of developing skills.

Ranajoy, Priya and the McDermott team advised BAT and built trusted relationships with risk investors and outcome funders over a period of nearly two years to bring the transaction together. The team, together with Indian law counsel Nishith Desai Associates, drafted and coordinated a complex Indian law-governed framework agreement setting out key elements of the project. The legal documentation was also structured to accommodate consistent terms into numerous bilateral contracts governing the various cash flows across entities in different jurisdictions, each requiring adherence to their own charity and tax laws, policies and regulations. Because India remains a highly regulated industry, particularly regarding foreign investment into local projects, the team had to remain alert to regulatory sensitivities and tackle on-the-ground compliance issues and related challenges.

Given the complex nature of the transaction, its unique focus and the unusually large number of parties involved, the McDermott team’s success stemmed from their ability to remain flexible and their willingness to take a commercial and pragmatic approach to the transaction instead of trying to fit it into an existing mold. Distilling the legal issues and creating the tailored transaction documents required creativity and out-of-the-box legal thinking.


With more experience in cross-border development impact bonds than any other team in the industry, strong deal capacity and a deep understanding of the international impact investing landscape—together with the regulatory and legal constraints in which BAT and its partners operate and transact—the McDermott legal team was able to bring together all parties to successfully close the Skill Impact Bond. Early implementation has shown positive results.

Because of its unique gender focus and broad scope, the Skill Impact Bond has immense, market-shaping implications in development finance. It is the largest gender lens-focused cross-border impact bond, and its structure should prove effective when structuring for similar interventions. Rather than focusing on an isolated problem, funding and result, the broader target of “skills” will allow other organizations to use it as a template for application to a variety of issues in the future.

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