Fast, flexible financing could be a game-changer in fighting the virus
As COVID-19 cases mount around the world, scientists are pulling out all the stops to find a safe and viable vaccine. G20 leaders have pledged to “do whatever it takes” to combat the deadly virus. An analysis estimates it will take US$ 7 trillion to combat the coronavirus and rescue the economies devastated in its wake. This includes lower-income countries needing additional support to address the current crisis and, we hope, to purchase and roll out COVID-19 prevention measures and treatments.
Make no mistake: it will be an enormous challenge to raise the massive amounts of immediate funding needed during a worldwide economic crisis.
There are solutions to this funding gap. Countries could promise to pay for this life-saving vaccine by spreading out the costs over many years, and the private sector can invest to raise the total amount of the funding against those future payments – funding that can be put to use right now.
We already have a proven and trusted financing tool to make this possible: IFFIm, the International Finance Facility for Immunisation. Since its first Vaccine Bond issuance in 2006, IFFIm has enabled Gavi, the Vaccine Alliance to pay for pressing immunisation programmes, as well as for polio eradication, vaccine stockpiles and health system strengthening.
Now, subject to Gavi approval and additional donor pledges, IFFIm could be put to work to raise fast, flexible financing on a large scale to fund the development a COVID-19 vaccine as well as its rapid deployment to affected countries once available.
So far, ten countries have committed to pay out more than US$ 6.5 billion to IFFIm over 10 to 23 years. Against those pledges, IFFIm’s Vaccine Bonds have raised about $6.1 billion from private sector investors around the world and provided $2.6 billion of immediately available funding for Gavi. IFFIm then pays back those investors at a competitive rate of return.
Others are also using social bonds to meet he urgent needs of our current crisis. The African Development Bank (AfDB), for example, has already raised $3 billion in a 3-year bond to help alleviate the economic and social impact the COVID-19 pandemic will have on livelihoods and Africa’s economies.
With the IFFIm financing model, the world can provide funding not just when it’s available – which could be too late – but immediately. IFFIm has worked before to fund programmes that preserve and protect people’s health. It’s a proven solution that could help the world overcome an unprecedented challenge.