IFFIm “essential” to continued financing for the COVAX AMC
IFFIm “essential” to continued financing for the COVAX AMC
5 April 2022
Credit: Gavi/2021/Jeffrey Atsuson
In the last year, COVAX has delivered more than 1.4 billion COVID-19 vaccines to 145 low and middle-income economies — a heartening milestone in the fight against the pandemic. Yet, with millions of people still unvaccinated, COVID-19 is far from over. The virus is evolving, too. A major variant has been identified every four months, on average, since the pandemic was declared.
Anticipating these unknowns, Gavi aims to raise US$ 3.8 billion for the COVAX AMC, part of an overall funding need of US$ 5.2 billion for COVAX. The new funding will support vaccine delivery and ancillary costs, and will launch a Pandemic Vaccine Pool that could provide up to US$ 2.7 million in immediate firepower for COVAX to respond to risks and shocks from new variants.
On 8 April, the Government of Germany will co-host a leader-level meeting, the 2022 Gavi COVAX AMC Summit: Break COVID Now, aimed at raising support for lower-income countries’ COVID-19 vaccination needs. With donor countries facing economic pressures, innovative finance tools such as IFFIm vaccine bonds are expected to play a central role in raising these funds.
“IFFIm is an ideal pandemic financing tool for this moment. It has the speed and agility we need to keep up with the twists and turns of COVID-19,” said Marie-Ange Saraka-Yao, Gavi’s managing director of resource mobilisation, private sector partnerships and innovative finance.
Gavi COVAX AMC lays out 2022 priorities
As we begin year three of the pandemic, Gavi is focusing on two flexible, adaptable mechanisms for the COVAX AMC to address countries’ pandemic needs: delivery and preparedness.
Through catalytic vaccine delivery, the COVAX AMC can boost capacity for delivery and get more shots into arms, reducing the risk of the virus mutating again.
And Gavi is preparing for the unpredictable with the Pandemic Vaccine Pool, a financing mechanism to support low- and middle-income economies in the event a devastating wave of the pandemic threatens the world, or science requires a new approach to vaccination. The Pool will be funded by up to US$ 2.7 billion in direct support and innovative financing. The Pool is structured so it can also be funded by contingent financing.
IFFIm funding is crucial
With a war in Ukraine, inflation and flagging resources, donors and participating COVAX AMC economies face challenging times. IFFIm offers a proven financing solution in an uncertain economic landscape, as donors look for ways to support COVAX and build the Pandemic Vaccine Pool in the coming year. Donors will be able to make new pledges to IFFIm but spread payments over many years in the future. There are no constraints on the size or duration of funding that IFFIm can frontload.
IFFIm’s established, in-demand vaccine bonds have already accelerated funding from donors to aid the fight against COVID-19. So far in this pandemic, over US$ 1.23 billion in new pledges have been committed to IFFIm for the COVAX AMC. IFFIm has frontloaded US$ 975 million raised on capital markets backed by those donations in 2021.
Further, Gavi and IFFIm donors have identified strong potential in leveraging the IFFIm model for Gavi’s broader outbreak preparedness response. To that end, Gavi and IFFIm are working to expand IFFIm’s capacity so donors will be able to make new pledges that will be on standby within the existing IFFIm framework.Once finalised, IFFIm's contingent financing feature would activate grants on the occurrence of trigger events such as a surge in illness associated with new and dangerous variants of coronavirus.
By harnessing its frontloading capability, IFFIm can be a valuable financial tool helping Gavi and donors to respond as efficiently and effectively as possible to upcoming global health challenges without any immediate impact on donors' fiscal or official development assistance (ODA) positions.
“IFFIm has a crucial capability – bringing pledged money forward in time and putting it to work immediately. IFFIm was created 15 years ago to accelerate childhood vaccination, and was hugely successful at it. Now it's an essential part of funding the fight to break COVID,” said Ken Lay, IFFIm Board Chair. "Working with Gavi and the World Bank, we expect it can do even more."
For the latest on COVAX and COVID-19 visit Gavi.org and the COVID-19 vaccine market dashboard.
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