"The topic itself is quite interesting, because it is close to the topic of concessions and public-private partnerships (PPP). PPP is developing quite well in the region, some concession agreements are also in place. We consider SIB projects implemented together with VEB.RF as a pilot. But so far we haven't found a specific topic to focus on, we're still considering all the options. On the whole, the idea is quite promising for a region like Yugra. It is likely that we will have such projects in the future", says Yakov Samokhvalov, General Director of the Yugra Center for Civic and Social Initiatives foundation.

SIBs can become a territorial development tool, albeit with some limitations.

"Social impact bonds are not a Russian invention, but a borrowing of foreign practice. They require adaptation to our legal system, budgeting processes, education about what examples of projects exist in the world and what domestic mechanisms are available in the country. The idea of buying only the finished result looks quite tempting per se. And I think that will play a part. We should probably talk more about this with specific examples that can be easily adapted to our country and specific territory", Yakov Samokhvalov added.

FIRST CHALLENGES

Only one of the seven social impact projects in our country is coming to completion in 2022, "Improving the Educational Performance of Students in the Republic of Sakha (Yakutia)". Therefore, experts believe it is too early to analyze the challenges faced by the project participants during their implementation. Open sources, including VEB.RF website, do not mention any problems when describing the interim results of the projects. Nor do the business media, such as Kommersant, Vedomosti, or RBC.

However, we can already talk about the general difficulties that emerged at the project launch phase. The regional government acts on behalf of the state, ordering the intervention and paying for the results of the project.

Social impact bonds are not a Russian invention, but a borrowing of foreign practice. They require adaptation to our realities.

"This is a new tool, there is little practical application experience, the regulatory documents are still to be worked out, so understandably mid-level officials are quite alarmed about it. Preparing the paperwork to launch the project proved to be a complex and time-consuming job, and we must give credit to the persistence and professionalism of VEB.RF specialists, the procedure becoming more and more streamlined with each new project launch", says Tatiana Burmistrova, co-founder and Chair of the "Toward Change" Foundation Board.

Judging from the available progress reports on the projects nearing completion, another major challenge is developing a system for monitoring the interim results of the project.

"Since the project conditions change all the time, it is vital that the contractors are flexible and focus on the end results. In general, it would be very interesting to do case studies of social impact projects, including the factors that influence the success and difficulties", Tatiana Burmistrova added.

Social impact projects require constant close interaction between the customer and the contractor. In case of the project "Improving the Educational Performance of Students in the Republic of Sakha (Yakutia)", the customers are the Ministry of Education and Science of the Republic of Sakha (Yakutia) and the National Research University — Higher School of Economics. Hence the first difficulty related to communication: the Republic of Yakutia is 5,000 kilometers and 6 time zones away from the contractor, NRU HSE — by the time Moscow gets to the office, the working day in Yakutia is almost over. At the same time, it is impossible to have the specialists from HSE to be permanently present in Khangalassky ulus.

"Therefore, the key to project implementation is delegation of responsibilities, high mutual contractor discipline, coordination of the positions, and reliance on local staff. Equally difficult is to develop a unified vision of the works aimed at achieving the planned results. Trust between the customer and the contractor is a very important part of success. NRU HSE has made some effort to jointly chart a development path for the municipal education system. Horizontal methodological interactions between schools in the district have been created and are sustained solely by the teachers’ enthusiasm. In the future, when implementing social impact projects, it is necessary to create special conditions for the experimental areas. As our experience has shown, the workload of the municipal project coordinators increases considerably", says Olga Balabkina.

In addition, external factors were also in action during the project period. The epidemiological situation in 2020–2021 influenced the change in the format of many project activities, most of which had to be carried out remotely.

GROWTH POINTS

In October 2021, the "Toward Change" Foundation initiated a round table "Social Impact Bonds: the Potential for Social Innovation in the Regions" at the Civic Chamber of the Russian Federation. The participants noted that the SIB model is very relevant for Russia. However, its expansion would rely on the regional authorities being ready to take action that is different their traditional work formats, to move from the "spending budget" to purchasing social effects. Further, it is also necessary to develop a methodology for evaluating the effects of SIB projects, calculating the return on investment and the training a sufficient number of qualified evaluators. It is important to keep the business investors involved in social projects. Given scarce resources, the SIB model may become more popular as part of Corporate Social Responsibility programs, done with the hope of getting the investment back in a few years.

"The growth points include raising awareness of the businesses, finding the balance between the social effects and commercial returns in impact investment projects, a fair risk assessment and active involvement of the state in developing the instruments and making such investment attractive", says Tatyana Burmistrova.

According to her, the underdeveloped social investment mechanisms and the difficulty of assessing the effectiveness of social spending are the main constraints for the development of