Innovative financing
The GAVI Alliance is at the forefront of developing and implementing new and highly innovative aid financing mechanisms. These draw on the skills and experience of business practices in the private sector to overcome historic limitations to development aid flows and mitigate the risks of scaling-up.
- The International Finance Facility for Immunisation (IFFIm) is a means of frontloading aid flows and reducing volatility. This concept, pioneered by GAVI, converts funding pledges into AAA rated bonds that can be sold to boost short-term funding and provide a stable long-term financial platform.
- An Advance Market Commitment (AMC) provides a way of accelerating the development and manufacture of vaccines. Through the AMC, donors commit money to guarantee the price of vaccines once they are developed, providing that they meet stringent, pre-agreed criteria on effectiveness, cost, and availability, and that developing countries demand them. The AMC also helps sustained use of the vaccines by these countries, as it also guarantees a long-term price, often referred to as the "tail price" which developing countries can afford.
The successful application of innovative finance mechanisms in health is expected to pave the way for their use in other development sectors.
See also
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