Hyderabad, Dec 2 (IANS): UBS Optimus Foundation will provide $3.5 million initial working capital for Rajasthan Development Impact Bond aimed at reducing the number of maternal and newborn deaths in the state.

Said to be the world's first Development Impact Bond (DIB) in healthcare, it is expected to improve the quality of care among private maternity care providers.

UBS Optimus Foundation is the upfront funder for DIB which will also have USAID, Palladium, PSI, HLFPPT and MSD for Mothers as the partners.

USAID Director Mark Green had announced the DIB on the sidelines of Global Entrepreneurship Summit (GES) here on Thursday.

Interventions will reach up to 600,000 pregnant women and if successful, up to 10,000 maternal and newborn deaths could be averted over a five year-period, said a statement from partners, providing more details of DIB.

Named 'Utkrisht' (Excellence) Impact Bond, this innovative public private partnershipwill support government efforts to reduce maternal and newborn deaths by improving access to and the quality of care in, up to 440 private healthcare facilities.

Rajasthan has one of the highest maternal and newborn mortality rates in the country, with 244 maternal deaths per 100,000 births and 47 infant deaths per 1,000 live births.

DIB is a new financing mechanism designed to achieve social and development outcomes by bringing together private investors, implementers, governments and donors. Outcome Funders pay back private investors' loans, with interest, if the service providers achieve pre-determined targets.

All implementation partners are also co-investors, contributing more than 20 per cent of the capital required. USAID and MSD for Mothers have committed a total of up to $8 million in outcome funding, provided a set of independently evaluated targets are met, added the statement.

"The model is proving increasingly attractive as people recognize its ability to secure new and much needed sources of finance and deliver significant and sustainable social returns," said Phyllis Costanza, CEO of the UBS Optimus Foundation.

MSD for Mothers is 10-year $500 million initiative of Merck & Co of the US to help create world where no woman dies giving life.