To make progress in alleviating their most serious health problems often requires resources developing societies cannot muster. Without adequate funding, interventions occur only sporadically. Initial reductions in disease or infections may be outstripped by setbacks when funding wanes.
To create a stable flow of funding for immunization and other activities, GAVI in 2006 created the International Finance Facility for Immunization (IFFIm). In a unique financing approach, IFFIm issues bonds based on the financial pledges of donor countries. It delivers the proceeds from those bonds to the GAVI Fund Affiliate Account, which disburses funds to GAVI programs. The bonds are based on 10- to 20-year legally binding commitments from the Group of 7 countries (Canada, France, Germany, Italy, Japan, the United Kingdom, and the U.S.). Using this mechanism, IFFIm aims to double the near-term aid available to developing nations. The World Bank manages the finances and implementation of IFFIm in addition to administering the GAVI Fund Affiliate Account.
Long-term donor commitments yield several benefits. They allow GAVI programs to budget and plan their activities for a longer time period, and allow donor countries that may be facing their own cash shortages to underwrite aid more quickly than if such aid could be extended only as they donated cash. GAVI notes that this mechanism also attracts new funding for immunization that otherwise would not have materialized. The more significant funding levels achievable due to bond leveraging, and the reliability of the resulting aid stream, also allow GAVI to negotiate lower prices for vaccines and to increase the magnitude of prevention and treatment services in the near term. Thus the mechanism should translate into more rapid movement toward eradication of targeted diseases.
The IFFIm mechanism has other potential uses and advantages. The GAVI website suggests that mechanisms like IFFIm, in addition to allowing funds to be leveraged, also can be effective ways to pool funds from various donors to enable more cohesive planning, budgeting, and reporting practices. This approach to leveraging funding could be most advantageous for initiatives in health or other sectors where the ability to accelerate near-term investments can pay off by reducing the scope of the problem and generating long-term benefits. Despite this attraction, USG has so far opted to contribute directly to GAVI rather than donating through the IFFIm, as do many European countries. (According to one respondent, this choice is related to USGs desire to hold a permanent rather than cyclical seat on the GAVI supervisory board.) USG has long issued bonds itself but has not tied them to financing for such specific problems.