The Victorian Government has launched its first social impact bonds: one focused on the treatment of people with drug and alcohol problems, and another working with adolescents who are leaving out of home care.

Impact Investing Australia has welcomed the government’s announcement and said that impact investing holds significant potential to help the government deliver better outcomes for society.

Victoria also recently became the first government in Australia to issue Green Bonds raising $300 million to finance projects delivering various environmental benefits.

“We are pleased that Victoria is harnessing the potential of impact investing to deliver improved outcomes for individuals, communities and the environment, as well as provide better value for taxpayers,” said Daniel Madhavan CEO of Impact Investing Australia.

“As we have seen in NSW and in other countries, social impact bonds are providing governments with an additional tool for tackling complex social issues that have persisted despite repeat interventions.”

Since the first social impact bond was launched in London 2010, over 60 projects have commenced in 15 countries.

The NSW Government also recently announced its third social impact bond, focused on tackling prisoner reoffending.

“The government has a critical role to play in growing the opportunities to harness private capital for positive social impact,” said Madhavan. “We encourage a more active role for governments at all levels to enable and participate in impact investing. Without stronger support from government, the potential for impact investment in Australia will not be realised.”