The Innovative Finance department's role ranges from being an internal think tank, through concept development, to implementation of Innovative Finance mechanisms
These mechanisms provide predictable sources of new funding for health, helping developing countries increase their capacity to immunise children.
International Finance Facility for Immunisation
The International Finance Facility for Immunisation (IFFIm) issues bonds in the capital markets – backed by long-term government pledges – and uses the proceeds for GAVI’s immunisation programmes. Ultimately, these government pledges are used to repay the IFFIm bonds. IFFIm, created in 2006, has enabled GAVI to nearly double its spending on immunisation programmes.
Advance Market Commitment
The Advance Market Commitment (AMC) accelerates the development and manufacture of vaccines for developing countries at affordable prices. In an AMC, donors commit funds to guarantee vaccine prices. These commitments provide manufacturers with an incentive to develop or build manufacturing capacity for urgently needed vaccines. In exchange, companies provide the vaccines at a price affordable to developing countries in the long-term.
GAVI Matching Fund
The GAVI Matching Fund is a major new private sector programme designed to raise US$ 260 million for immunisation by the end of 2015. Under the initiative, the UK Department for International Development (DFID) and the Bill & Melinda Gates Foundation have pledged about US$ 130 million combined (£ 50 million and US$ 50 million, respectively) to match contributions from corporations, foundations and other organisations, as well as from their customers, employees and business partners.
Several companies now are partners in the GAVI Matching Fund, demonstrating the power of collaboration through private sector actors to raise awareness and empower private individuals and companies to have an impact on global health programmes.
These Innovative finance initiatives are highly efficient win-win development tools. They help GAVI:
- Adapt to the needs of implementing countries and funders: innovative finance models help match the capacity and preferences of funders with the needs of implementing countries to rapidly scale up vaccine coverage, lower disease prevalence and accelerate introduction of new and underused vaccines;
- Provide predictable and flexible resources: funding predictability has enabled countries to implement multi-year programmes that fundamentally improve the quality of and access to health care services. Flexible resources allow GAVI to draw down resources quickly as needed, avoiding programme disruption;
- Respond to the MDGs: GAVI was created to help achieve Millennium Development Goal 4 by 2015: reducing by two-thirds the mortality rate for children younger than five;
- Shape markets: GAVI’s use of innovative finance helps stimulate country demand, grow markets, attract manufacturers and reduce prices. This makes donor resources go further and increases the ability of countries to fund vaccines in the long-term.