Global Health Risk Framework Pandemic Financing: Workshop Summary (2016) / Chapter Skim
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5 Innovative Financing Mechanisms for Preparedness and Response
5 Innovative Financing Mechanisms for Preparedness and Response
Pages 27-34
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From page 27... ...
• UNITAID is a global health agency that funds work in HIV/ AIDS, tuberculosis, and malaria. Sixty percent of UNITAID funding comes from a levy on air tickets in certain countries.
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From page 28... ...
Juan Costain of the World Bank moderated this discussion, which started with Paolo Sison of Gavi1 discussing IFFIm. He described IFFIm as a simple concept -- a way to secure long-term, legally binding pledges from nine donor governments (Australia, France, Italy, the Netherlands, Norway, South Africa, Spain, Sweden, and the United Kingdom)
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From page 29... ...
The World Bank manages the IFFIm treasury, and Gavi is its only beneficiary. He praised the risk and financial mechanisms the World Bank placed in the IFFIm structure, citing them as the reason why the facility is able to borrow from the market at such attractive rates.
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From page 30... ...
The stability allows recipient countries to know how much money they can expect from the levy, easing their planning and ability to spend. UNITAID gets about 60 percent of its funding from the air ticket levy, and Marmora mentioned the administrative discipline it takes to keep the funding tied to its purpose, avoiding the temptation to use it for outbreak response, climate change, or any number of other worthy development projects.
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From page 31... ...
In response, the Global Fund adapted a World Bank system of pulling donor capital from a country or from a promissory note, which allows for a donation to be made on a revolving basis over a fixed number of years. In practice, he continued, if the organization gets a $500 million donation from one country in a lump sum, and the same amount from another country in a 5-year revolving fund, the donation is available in five $100 million chunks.
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From page 32... ...
He speculated that, if funds like the Global Fund had a blanket mandate to use their money during crises, things would change, but otherwise they must spend according to their mandate. When asked about involving the private sector in pandemic financing, Bornstein emphasized that these people would be interested in the riskadjusted return on their investment.
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From page 33... ...
EgertonWarburton suggested that for the poorest countries and fragile states it would be necessary to invert the process: to give the credit first, borrowing against the credit risk of the donor countries and using the strongest balance sheets in the world to buy fast capital at the lowest possible cost. The domestic contribution would be the last money accessed, not the first.
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From page 34... ...
If the private sector is to be involved with pandemics, then it needs to earn a return on its investment if for no other reason than that there is a cost to capital and an opportunity for loss. Therefore, he continued, social impact bonds are a promising financial tool for pandemics.
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