Washington, D.C. - The U.S. Agency for International Development (USAID) and U.K.’s Department for International Development (DFID) announced plans today to build a global investment platform that reimagines how to support breakthrough solutions to the world’s most intractable development challenges.

Innovation has yielded dramatic gains in global prosperity. The mission of Global Development Innovation Ventures (GDIV) will be to focus resources in international development towards innovative approaches with proven, radically successful results. 

GDIV will adopt the model of the Development Innovation Ventures program at USAID, designed to source powerful solutions from anywhere in the world, test them using rigorous methods and staged financing, and bring to scale those that offer more value for money than standard practice and improve the lives of millions. It will unlock investment capital from both private and public sectors, to scale solutions commercially or through public sector adoption.

"We are proud to see that this model, born at USAID, has become a global tool for improving effectiveness in development," said Dr. Rajiv Shah, USAID Administrator. "Our partnership with the UK and future GDIV investors will amplify our impact through the discovery of breakthrough technologies and approaches to help end extreme poverty."

GDIV will feature:

• A global competition for investments: Because the best ideas may come from anywhere, social enterprises, NGOs, corporations, researchers, government agencies, and others may apply. GDIV will support new technologies, business models, policy practices, and other approaches for a wide range of sectors and developing countries.
• An evidence-driven investment strategy: Investment decisions will depend on evidence of impact and cost-effectiveness, whether through a market test if a solution will scale commercially, or through rigorous evaluation if it will scale via public sector adoption.  GDIV will offer three stages of funding: the development of proofs-of-concept, the expansion and testing of promising pilots, and the transition of proven concepts to widespread scale.
• A marketplace for development successes: Private investors, international organizations, governments, foundations, philanthropists and others may co-invest and collaborate along solutions’ pathways to scale.  GDIV will offer many flexible options for investing in its pipeline.

The USAID and DFID collaboration is motivated by early successful results from the DIV program (www.usaid.gov/DIV), which was founded in 2010. Among its 57 investments, DIV has supported startup social enterprises that have subsequently secured private financing, world-class researchers who have partnered with host country adopters to scale their findings, and life-saving mechanisms that cut costs in the private and public sectors. 

Examples include:

Putting passengers in the driver’s seat

In 20 years, Africa’s deaths from road accidents will double those from malaria, and already cost the African continent $10 billion annually. In a randomized control trial involving 4,000 of Kenya’s minibuses, researchers placed messages inside some vehicles to encourage passengers to “Speak up!” against dangerous driving. Across the group that received stickers, insurance claims related to injuries and death dropped by more than half. With DIV support, the experiment is being conducted across 10,000 minibuses. If there is again compelling evidence of saving lives for less, Kenya’s largest insurance company will require the messaging as a condition for coverage.

Lighting India with solar micro grids

In rural Uttar Pradesh, Mera Gao Power (MGP) is reaching thousands of un-electrified homes with village-level solar micro grids. For 25Rs ($0.46) per week, customers receive lights, phone chargers, and system maintenance, for half the cost of kerosene. DIV provided MGP with the capital to grow beyond its initial pilot villages when private sector support was hard to find. Their target was to reach 40 villages by 2013. As of early 2013, the company was operating in more than 155 villages. Mera Gao has already secured private seed financing for their next expansion to bring the health, economic, and environmental benefits of their enterprise to wider scale.

USAID's DIV program currently provides up to $24 million per year in competitive innovation investments, and the FY2014 President's Budget requests an expansion of this effort to over $28 million.

GDIV is a part of the National Impact Initiative which encourages market-based solutions and results-driven impact investment across the U.S. government.