The concept of an International Finance Facility (IFF) first was proposed in January 2003 by

HM Treasury His Majesty's Treasury (HM Treasury), occasionally referred to as the Exchequer, or more informally the Treasury, is a department of His Majesty's Government responsible for developing and executing the government's public finance policy and ec ...

in conjunction with the

Department for International Development , type = Department , logo = DfID.svg , logo_width = 180px , logo_caption = , picture = File:Admiralty Screen (411824276).jpg , picture_width = 180px , picture_caption = Department for International Development (London office) (far right ...

of the

United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the continental mainland. It comprises England, Scotland, Wales and North ...

. An IFF is designed to frontload aid to help meet the

Millennium Development Goals The Millennium Development Goals (MDGs) were eight international development goals for the year 2015 that had been established following the Millennium Summit of the United Nations in 2000, following the adoption of the United Nations Millenniu ...

. Bonds are issued on global

capital markets A capital market is a financial market in which long-term debt (over a year) or equity-backed securities are bought and sold, in contrast to a money market where short-term debt is bought and sold. Capital markets channel the wealth of savers to ...

, against the security of government guarantees to maintain future

aid In international relations, aid (also known as international aid, overseas aid, foreign aid, economic aid or foreign assistance) is – from the perspective of governments – a voluntary transfer of resources from one country to another. Ai ...

flows, which would be used to buy back the bonds over a longer period. This

structured finance Structured finance is a sector of finance - specifically financial law - that manages leverage and risk. Strategies may involve legal and corporate restructuring, off balance sheet accounting, or the use of financial instruments. Securitization ...

arrangement allows a large amount of aid to flow soon, at the expense of less aid in the future. Critics have raised concerns that the poorest countries in particular do not have the ability to efficiently spend such large amounts of aid whilst avoiding

corruption Corruption is a form of dishonesty or a criminal offense which is undertaken by a person or an organization which is entrusted in a position of authority, in order to acquire illicit benefits or abuse power for one's personal gain. Corruption m ...

, and that their economies may not be able to cope with such rapid change either.

Official development assistance Official development assistance (ODA) is a category used by the Development Assistance Committee (DAC) of the OECD, Organisation for Economic Co-operation and Development (OECD) to measure aid, foreign aid. The DAC first adopted the concept in ...

donors are committed to reaching the target of 0.7 per cent ODA/GNI and the IFF is a mechanism to accomplish that goal. The

International Development Association The International Development Association (IDA) (french: link=no, Association internationale de développement) is an international financial institution which offers concessional loans and grants to the world's poorest developing countries. Th ...

as well as the

World Bank Group The World Bank Group (WBG) is a family of five international organizations that make leveraged loans to developing countries. It is the largest and best-known development bank in the world and an observer at the United Nations Development Grou ...

serve to promote the IFF idea. __TOC__

International Finance Facility for Immunisation

The first IFF is the
International Finance Facility for Immunisation
(IFFIm), begun by France, the UK and other European countries in 2006. "IFFIm was established as a charity with the

Charity Commission for England and Wales , type = Non-ministerial government department , seal = , seal_caption = , logo = Charity Commission for England and Wales logo.svg , logo_caption = , formed = , preceding1 = , d ...

and is registered in England and Wales as a company limited by guarantee with number 5857343 and as a charity with number 1115413" without share capital for indefinite duration under the

Companies Act 1985 The Companies Act 1985 (c. 6) is an Act of the Parliament of the United Kingdom of Great Britain and Northern Ireland, enacted in 1985, which enabled companies to be formed by registration, and set out the responsibilities of companies, their d ...

. IFFIm was initiated to rapidly accelerate the availability and predictability of funds for immunisation, in programmes for over 70 of the poorest countries around the world. "Through its bond issuances, IFFlm converts long-term government pledges into immediately available cash resources." IFFIm sells bonds - officially called Vaccine Bonds - on the capital markets to raise funds for the

GAVI Alliance GAVI, officially Gavi, the Vaccine Alliance (previously the GAVI Alliance, and before that the Global Alliance for Vaccines and Immunization) is a Public–private partnership, public–private global health partnership with the goal of incr ...

, a public-private partnership which works to save children’s lives and protect people’s health by increasing access to vaccination in developing countries. In 2008,

Daiwa Securities Group is a Japanese investment bank that is the second largest securities brokerage after Nomura Securities. Major subsidiaries include ''Daiwa Securities'', which offers retail services such as online trading to individual investors and investment ...

provided in a package some of the capital market funds. IFFIm was, as of July 2012, backed by the United Kingdom, France, Italy, Spain, the Netherlands, Sweden, Norway, Australia and South Africa. Brazil has pledged to become IFFIm's tenth donor. IFFIm was, as of May 2018, backed by the same nine countries. IFFIm "front loads financing for

vaccines A vaccine is a biological preparation that provides active acquired immunity The adaptive immune system, also known as the acquired immune system, is a subsystem of the immune system that is composed of specialized, systemic cells and pro ...

by issuing vaccine bonds backed by the legally binding pledges from donors." To date, IFFIm has leveraged US$6.3 billion in donor pledges to raise US$4.5 billion (July 2013) on the world’s capital markets from both retail and institutional investors. The

World Bank The World Bank is an international financial institution that provides loans and grants to the governments of low- and middle-income countries for the purpose of pursuing capital projects. The World Bank is the collective name for the Interna ...

is IFFIm's treasury manager. Since IFFIm began in 2006, IFFIm funding has allowed GAVI to nearly double its expenditures in health programmes. US$2.2 billion in IFFIm funding already has been disbursed to support vaccine purchase and delivery for 70 developing countries. Health care consulting firm HLSP issued an independent evaluation of IFFIm in July 2011 that strongly commended its financial model and health care results. The report noted that not only do IFFIm-funded investments generate “extremely good returns,” but also that it likely helped GAVI save more than 2.1 million lives. The report focused on IFFIm’s cost-effectiveness, particularly the benefits of frontloading and its impact on creating large-scale immunity. IFFIm provides certainty of funding for both GAVI and recipient countries, aiding long-term planning and short-term needs. For example, US$545 million in proceeds from IFFIm funded tactical purchases that helped prevent 1.4 million deaths from

yellow fever Yellow fever is a viral disease of typically short duration. In most cases, symptoms include fever, chills, loss of appetite, nausea, muscle pains – particularly in the back – and headaches. Symptoms typically improve within five days. In ...

polio Poliomyelitis, commonly shortened to polio, is an infectious disease caused by the poliovirus. Approximately 70% of cases are asymptomatic; mild symptoms which can occur include sore throat and fever; in a proportion of cases more severe s ...

and

measles Measles is a highly contagious infectious disease caused by measles virus. Symptoms usually develop 10–12 days after exposure to an infected person and last 7–10 days. Initial symptoms typically include fever, often greater than , cough, ...

. Dedicated IFFIm funding also played a significant role in combating 600,000 cases of meningitis and maternal and neonatal

tetanus Tetanus, also known as lockjaw, is a bacterial infection caused by ''Clostridium tetani'', and is characterized by muscle spasms. In the most common type, the spasms begin in the jaw and then progress to the rest of the body. Each spasm usually ...

. In addition, IFFIm helped GAVI fund breakthrough vaccines quickly and securely. IFFIm financed more than 90% of the guaranteed payment to

UNICEF UNICEF (), originally called the United Nations International Children's Emergency Fund in full, now officially United Nations Children's Fund, is an agency of the United Nations responsible for providing Humanitarianism, humanitarian and Devel ...

for initial doses of a

pentavalent vaccine A pentavalent vaccine, also known as a 5-in-1 vaccine, is a combination vaccine with five individual vaccines conjugated into one. Pentavalent vaccine frequently refers to the 5-in-1 vaccine protecting against diphtheria, tetanus, whooping cough, ...

which immunises against five infectious diseases:

diphtheria Diphtheria is an infection caused by the bacterium '' Corynebacterium diphtheriae''. Most infections are asymptomatic or have a mild clinical course, but in some outbreaks more than 10% of those diagnosed with the disease may die. Signs and s ...

pertussis Whooping cough, also known as pertussis or the 100-day cough, is a highly contagious bacterial disease. Initial symptoms are usually similar to those of the common cold with a runny nose, fever, and mild cough, but these are followed by two or ...

haemophilus influenzae type B ''Haemophilus influenzae'' (formerly called Pfeiffer's bacillus or ''Bacillus influenzae'') is a Gram-negative, non-motile, coccobacillary, facultatively anaerobic, capnophilic pathogenic bacterium of the family Pasteurellaceae. The bacter ...

(Hib) and

hepatitis B Hepatitis B is an infectious disease caused by the ''Hepatitis B virus'' (HBV) that affects the liver; it is a type of viral hepatitis. It can cause both acute and chronic infection. Many people have no symptoms during an initial infection. Fo ...

. GAVI could not have made that commitment and upfront cash payment without IFFIm. In December 2014 IFFIm issued its first Vaccine Sukuk, which was "a three-year, US$500 million transaction that was the largest debut Sukuk ever issued by a supra-national entity."

References

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External links