A New Development Finance Institution Collaborative for Equitable Health Emergency Response

This is the fourth post in a six-part series featuring Dalberg’s contributions to the goals discussed at the 78th session of the United Nations General Assembly (UNGA), held in New York from September 18 to 26, 2023.

While substantial resources were mobilized in response to COVID-19, the pandemic revealed critical shortcomings in the global health emergency response systems. High-income countries (HICs) consistently received life-saving tests, treatments, vaccines, and other supplies faster and at higher volumes than low- and middle-income countries (LICs and MICs): some LICs and MICs had to wait up to 100 days longer than HICs to administer their first vaccination.¹ Between May 2021 and May 2022, over 75 times more tests were administered per day in HICs than in LICs.² Development finance institutions (DFIs), with their unique financing capabilities and impact mandate, emerged as a vital source of surge financing to address delays and facilitate more equitable access to these supplies (also known as medical countermeasures or MCMs).  

Building on Dalberg’s ongoing work on COVID-19 response, Dalberg supported the U.S. International Development Finance Corporation (DFC) and U.S. Agency for International Development (USAID) to identify concrete options for DFIs to accelerate access to MCMs in health emergencies.  

During a high-level side event at the UN General Assembly (UNGA) on September 20th, DFC and USAID launched a report, developed with support from Dalberg, summarizing the most promising financing opportunities for DFIs in the context of health emergencies.  

At the event, Scott Nathan, CEO of DFC, and Atul Gawande, USAID Assistant Administrator for Global Health, were joined by Ambassador Takeshi Akahori, Director-General for Global Issues at the Ministry of Foreign Affairs of Japan; Dr. Mamta Murthi, Vice President for Human Development at the World Bank Group; Mike Pyle, U.S. Deputy National Security Advisor and G7/G20 Sherpa; and a panel of experts on health finance. Representatives from governments, regional organizations, civil society, global health organizations, non-governmental entities, development financing organizations, and development banks actively engaged in the open discussion. During the event, a Joint Statement of Intent for Collaboration was presented among participating DFIs to advance the financing opportunities outlined in the report.

The highest potential financing opportunities highlighted in the report³ are the following: 

  • Liquidity facilities for donor-financed procurement. DFIs will work toward establishing a shared liquidity facility among willing DFIs and global health pooled procurement organizations to ensure access to liquidity on “day zero” of a health emergency. This could include expanding the existing liquidity facilities with Gavi (including the European Investment Bank’s Frontloading Facility and the DFC-backed COVAX Rapid Financing Facility) and/or establishing new liquidity facilities for other global health organizations. In either instance, willing DFIs could provide short-term loans to bridge potential delays in donor pledges to procure MCMs for LICs and MICs.
  • Bridge facilities for self-financed procurement by LICs and MICs. DFIs will work toward expanding existing facilities providing bridge loans to LICs and MICs for self-financed procurement, such as Afrexim Bank’s AVAT, PAHO’s Revolving Fund, UNICEF’s VII, and the COVAX Cost Sharing Mechanism, and/or establishing a new, shared facility with willing DFIs as upfront funders. These efforts would aim to increase the magnitude of initial funding for procurers to place bulk orders quickly at the start of a health emergency.  
  • Working capital for LIC and MIC surge production. DFIs will work toward supporting the provision of surge financing for LIC and MIC manufacturers to scale up production of MCMs during a health emergency (e.g., enabling them to expand production lines). To achieve this goal, willing DFIs would look to establish one or multiple syndicate facilities to provide working capital and capital expenditure financing to select manufacturers based on demand and supply gaps, either directly or through financial intermediaries. Willing DFIs and intermediaries could coordinate with technical health organizations to pre-define a network of LIC and MIC manufacturers.  
  • Guarantees to expand LMIC access. DFIs will explore providing further funding to MedAccess, a social enterprise that takes on financial risk to strengthen health markets, enabling it to provide more guarantees to procurers and manufacturers. In doing so, MedAccess would support manufacturers of critical MCMs (including producers based in LICs and MICs) in scaling production to respond to a future health emergency, in return for pre-agreed ceiling prices and/or supply commitments.  

Congratulations to the participating organizations on this concrete step toward a more equitable response in future health emergencies!

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