Pandemic Emergency Financing Facility: struggling to deliver on its innovative promiseBMJ 2019; 367 doi: https://doi.org/10.1136/bmj.l5719 (Published 09 October 2019) Cite this as: BMJ 2019;367:l5719
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This is an interesting and timely article, reflecting an important area in global health, and more broadly development, financing.
The recent 2019 Global Humanitarian Assistance report similarly commented on the theoretical promise of innovative financing mechanisms (like the WB PEF) and their practical difficulties. Given that most (85%) private financing for development is directed toward NGOs, with the majority of public sector/government financing for development going toward multilaterals like the World Bank, multilateral agencies are trying to diversify their investment portfolios to become more appealing to the private sector.
As the authors describe very well, the PEF has drawbacks, but it is worth noting that these are unique to the PEF. For instance, another WB risk financing tool, which works slightly differently, is the Development Policy Loan (DPL) with a Catastrophe Deferred Drawdown Option (DPL cat-DDO). This is a contingent credit line that allows the borrower to rapidly meet its financing requirements following a shortfall in resources due to a sudden event or catastrophe. It provides immediate liquidity but is contingent on the recipient meeting various criteria. It does not involve bonds but does (similar to the PEF) require a definition of when money will be disbursed. This may be as simple as the occurrence of a hurricane. In the case of global health security though, (as discussed in this paper) there are many nuances to consider.
Private donors are increasingly interested in both diversifying investment away from traditional areas of finance, and being socially accountable through corporate social responsibility. Innovative global health financing tools show great promise in harnessing the power of the private financial markets. But before these tools are able to realise their potential, consensus must be reached on when and how such funds should be triggered in the context of global health security.
Competing interests: No competing interests