DFC and Citi Risk Management Solution Helps Gavi Strengthen the Foundations of the COVAX Facility
- DFC financing for vaccine-related efforts now totals nearly $600m committed during the Biden Administration
- U.S. International Development Finance Corporation, in conjunction with Citi, launch risk management solution for COVAX Facility
- Helps to insure against risk in 9 self-financing countries participating in COVAX
- COVAX aims to provide fair and equitable access to COVID-19 vaccines for every country in the world
U.S. International Development Finance Corporation (DFC), in conjunction with Citi, today announced it is providing a risk management solution to Gavi, the Vaccine Alliance (Gavi), to mitigate risk and overcome financial hurdles with governments that are funding COVID-19 vaccine purchases through the COVAX Facility. One of many actions unveiled at the U.S. COVID-19 Summit and highlighted by the White House, this risk management partnership embodies the collective and global action that will be required to address and end the COVID-19 pandemic.
DFC support will help Gavi’s efforts to pre-purchase up to 2 billion vaccines directly from manufacturers and allocate these vaccines rapidly and equitably throughout the world. DFC’s financing will offer protection against political risks in nine self-financing countries – across Latin and Central America, the Middle East, and Eastern Europe – participating in COVAX, covering a total amount of more than $383 million in insurance.
“DFC is proud to partner with Citi and Gavi on this important insurance facility, which builds upon President Biden’s leadership to end the pandemic and expands DFC’s strategy to boost vaccine manufacturing capacity in Africa and the Indo-Pacific,” said DFC’s Chief Operating Officer David Marchick. “The insurance transactions announced today on the margins of the President’s COVID summit will allow for the rapid distribution of COVID-19 vaccines, advancing vaccine equity throughout the world.”
“The COVAX Facility’s urgent mission is to accelerate the availability of COVID-19 vaccines to the entire world, particularly to countries and regions that struggle to acquire enough doses to protect their populations,” said Gavi CEO Dr. Seth Berkley. “The risk management solution provided by the U.S. International Development Finance Corporation will strengthen COVAX’s ability to pursue that mission, and we are grateful to DFC, the U.S. government and Citi for that important support.”
Citi’s Export & Agency Finance acted as the sole financial advisor throughout the stages of establishing the political risk insurance framework for Gavi. “Citi is honored to work with DFC and Gavi on this very important effort in mobilization against COVID-19,” said Jay Collins, Vice Chairman of Banking, Capital Markets and Advisory at Citi. “We are delighted with the opportunity to support our partners at DFC and Gavi to help design and implement a risk management solution to create more capacity and enable greater equitable, fair and timely access to COVID-19 vaccines across the globe, particularly by developing countries.”
Linklaters LLP provided legal counsel to Gavi on the DFC risk management solution.
The COVID-19 pandemic continues to disproportionately affect low- and middle-income countries, which struggle to gain access to COVID vaccines. Studies show that global economic recovery is at risk unless vaccines are more equitably manufactured in and distributed to the developing world. Co-led by Gavi, the Coalition for Epidemic Preparedness Innovations (CEPI), and the World Health Organization (WHO), COVAX aims to provide fair and equitable access to COVID-19 vaccines for every country in the world. Promoting equitable access to safe and effective vaccines globally is not only the right thing to do, but also a smart and protective measure for global health and security.
Under President Biden’s leadership, DFC’s financial tools are driving growth in vaccine manufacturing capacity in multiple regions, with multiple technologies and within large and small countries. Already, DFC’s partnerships with Aspen in South Africa, IPD in Senegal, and Biological E., Ltd. in India are projected to facilitate expansion of manufacturing capacity to nearly 2 billion COVID-19 vaccine doses across the globe by the end of 2022, with more projects in the pipeline.
DFC’s insurance transactions in support of Gavi and COVAX fall under the agency’s Health and Prosperity Initiative, through which DFC aims to catalyze $5 billion of investment in support of global health resilience. The initiative includes a call for proposals from private sector entities seeking DFC support for health-related investments in developing countries, including projects that support the global response to COVID-19.
Today’s COVID-19 Summit is an important milestone in helping drive the momentum the global community needs to succeed in the fight against COVID-19. In the first 9 months of the Biden Administration, DFC has committed nearly $600 million for COVID-related investments, more than four times the agency’s five-year average for all health investments. DFC looks forward to supporting additional future partnerships and projects that will continue to help boost collective global action toward ending the pandemic.
U.S. International Development Finance Corporation (DFC) is America’s development bank. DFC partners with the private sector to finance solutions to the most critical challenges facing the developing world today. We invest across sectors including energy, healthcare, critical infrastructure, and technology. DFC also provides financing for small businesses and women entrepreneurs in order to create jobs in emerging markets. DFC investments adhere to high standards and respect the environment, human rights, and worker rights.
COVAX, the vaccines pillar of the Access to COVID-19 Tools (ACT) Accelerator, is co-led by CEPI, Gavi and WHO – working in partnership with UNICEF and PAHO as delivery partners, developed and developing country vaccine manufacturers, the World Bank, and others. It is the only global initiative that is working with governments and manufacturers to ensure COVID-19 vaccines are available worldwide to both high-income and lower-income countries.
About Gavi’s role in COVAX
Gavi leads on procurement and delivery at scale for COVAX: designing and managing the COVAX Facility and the Gavi COVAX AMC and working with its traditional Alliance partners UNICEF and WHO, along with governments, on country readiness and delivery. As part of this role, Gavi hosts the Office of the COVAX Facility to coordinate the operation and governance of the mechanism as a whole, holds financial and legal relationships with 193 Facility participants, and manages the COVAX Facility deals portfolio: negotiating advance purchase agreements with manufacturers of promising vaccine candidates to secure doses on behalf of all COVAX Facility participants. Gavi also coordinates design, operationalisation and fundraising for the Gavi COVAX AMC, the mechanism that provides access to donor-funded doses of vaccine to 92 lower-income economies. As part of this work, Gavi provides funding and oversight for UNICEF procurement and delivery of vaccines to all AMC participants – operationalising the advance purchase agreements between Gavi and manufacturers – as well as support for partners’ and governments work on readiness and delivery. This includes tailored support to governments, UNICEF, WHO and other partners for cold chain equipment, technical assistance, syringes, vehicles, and other aspects of the vastly complex logistical operation for delivery. Gavi also co-designed, raises funds for and supports the operationalisation of the AMC’s no fault compensation mechanism as well as the COVAX Humanitarian Buffer.
About Gavi, the Vaccine Alliance
Gavi, the Vaccine Alliance is a public-private partnership that helps vaccinate half the world’s children against some of the world’s deadliest diseases. Since its inception in 2000, Gavi has helped to immunise a whole generation – over 822 million children – and prevented more than 14 million deaths, helping to halve child mortality in 73 lower-income countries. Gavi also plays a key role in improving global health security by supporting health systems as well as funding global stockpiles for Ebola, cholera, meningitis and yellow fever vaccines. After two decades of progress, Gavi is now focused on protecting the next generation and reaching the unvaccinated children still being left behind, employing innovative finance and the latest technology – from drones to biometrics – to save millions more lives, prevent outbreaks before they can spread and help countries on the road to self-sufficiency. Learn more at www.gavi.org and connect with us on Facebook and Twitter.
The Vaccine Alliance brings together developing country and donor governments, the World Health Organization, UNICEF, the World Bank, the vaccine industry, technical agencies, civil society, the Bill & Melinda Gates Foundation and other private sector partners. View the full list of donor governments and other leading organizations that fund Gavi’s work here.
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