On February 23, MFAN, the United Nations Foundation, the World Bank, the Brookings Institution and Standard Bank hosted a discussion titled “Innovative Financing and the Global Health Funding Gap”. Moderated by MFAN Principal Noam Unger, Policy Director of Brooking’s Foreign Assistance Reform Project, the conversation focused on “how innovative, private sector-led partnerships can create certainty, drive more efficient resource management and fill growing gaps in a challenging funding landscape.” Amie Batson, Deputy Assistant Administrator for Global Health and USAID’s Deputy of the Global Health Initiative provided a keynote address. Panelists included: Darren Dorkin, Program Manager of the Health Results Innovation Trust Fund program in the World Bank; Maureen Harrington, Director of Corporate and Investment Banking at Standard Bank; Joy Phumaphi, Executive Secretary of the African Leaders Malaria Alliance; and Kevin Starace, Executive Director of Global Health Innovation at the United Nations Foundation.
The event marked the launch of the Pledge Guarantee for Health and its first transaction, in partnership with several actors including the Government of Zambia. Essentially, the PGH model helps streamline the procurement of lifesaving health supplies while reducing costs and eliminating waste. As a result of this innovative, fresh approach, more than 800,000 anti-malaria bed nets have been distributed ahead of the deadly rainy season in Zambia.
According to UNF’s statement, PGH works like this: “PGH facilitates short-term loans to developing country recipients on the basis of pending aid commitments. This enables recipients to avoid stock-outs, emergency shipments, and high costs that can arise when they must wait for funding to replenish supplies of critical medicines. The PGH is flexible, and transactions are structured to accommodate needs of both recipients and donors. Thanks to PGH facilitating the process and guaranteeing the bank loan, health supplies are procured up to eight months faster, and commodity premiums are reduced by up to 83 percent.”
A key theme that emerged in the discussion was that of risk-sharing. The PGH model was able to effectively unlock commercial capital in a unique way that UNF and others hope to build upon. MFAN was thrilled to co-sponsor this event that launched PGH as we continue to look at how to make foreign assistance more effective with limited resources and accountable to the people who need it most.