��Innovative financing for HIV in the context of Universal Health Coverage: What works?��Dr. Nertila Tavanxhi, GFATM�

5 December 2023

Introduction and context

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Various issues faced by countries are likely to affect financing for health, presenting challenges to domestic financing for national responses during GC7 and beyond 

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Rising debt distress

Surging food insecurity and prices

Increasing food insecurity and inflation presents a risk to populations affected by HIV, TB, and Malaria

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Majority of domestic monies for health has historically been driven by economic growth, which is stalling or downgraded in vast majority of LMICs

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According to the World Bank, “…110 countries will not get back to the average pre-COVID growth path in their pc GGE of countries in their income group even by 2027 and 41 countries out of these will see their spending capacity in 2027 contract as compared to pre covid”

Significant levels of fiscal deficits and debt distress likely to affect financing of health systems

Revisions to expected growth

Reduction in government spend

Macro challenges

The HIV funding gap is widening and must match the need

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Source: 2023 UNAIDS Global Update

Principles for assessing innovative financing mechanisms, where domestic resource mobilization efforts are insufficient

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Source: 2015 CABRI Background Paper on Innovative Financing Options in Healthcare

• Sustainability – Does the IF mechanism have longevity?
• Stability – Does the IF mechanism provide a stable source of revenue from one year to the next?
• Progressivity – Does the IF mechanism place the burden on those most able to pay for it?
• Administrative efficiency – What are the financial or administrative costs relative to the resulting value added?
• Side effects – To what extent does the IF mechanism create positive or negative side effects?

Examples of how IF mechanisms can address programmatic and other bottlenecks

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1. Raising Finance for Delivery – Where current financing is insufficient

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• Fostering Innovation – Creating more space for innovation

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• Increasing efficiency – Where frontloading or financial incentives could drive savings and implementation efficiencies

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• Supporting Transition – Where higher leverage using financial innovation is possible

Key priority areas where IF can add value

Examples to present

Bilateral debt swap beneficiaries

South Africa Social Impact Bonds

Health, Nutrition, and Early Childhood Development Program

and more…

Blended finance

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What is blended finance?

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Blended finance refers to efforts to combine funding from donors, multi-lateral development banks (MDBs) and other financing institutions

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In a sub-set of countries where there is significant potential for impact and opportunities for alignment with partners, blended finance can help encourage new financing or influence existing financing in support of health objectives

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Blended finance supports better patient outcomes, country systems strengthening and financial sustainability of health responses

Grants

MDB financing

Domestic resources

Blended finance can be an effective tool to achieve its strategic, programmatic and operational priorities

• Incentivizing countries to commit domestic resources towards HTM 
• Better aligning funder/financer with partners and countries
• Strengthening sustainability via on budget spend
• Enabling interactions with other sources of funding (including climate financing), which is heavily funded by MDBs

• Enhancing health responses by embedding within broader health systems and supporting critical reforms
• Driving resources and leveraging the comparative advantage of different partners

• Leveraging country presence and differentiated fiduciary and operational expertise of partners
• Supporting sub-national engagement
• Strengthening national institutions and public financial management

Operational

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Strategic

Programmatic

Two examples: Lives and Livelihoods Fund (LLF) and Côte d'Ivoire

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A US$2.5 billion concessional financing facility set up by the Islamic Development Bank and the Bill & Melinda Gates Foundation

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LLF provides 35% concessional grant, combined with 65% IsDB OCR loan to eligible OIC countries

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2016: Mobilized $32M for Senegal malaria programs

• Goal is to accelerate the achievement of pre-elimination of malaria (<1 case per 1,000)

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2019-2020: Mobilized $50M for Benin primary care and community health worker programs

• Goal is to recruit, train and deploy doctors, nurses, health assistants and CHWs

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An opportunity for blended financing from the Global Fund of 6M EUR to complement larger investments from the World Bank ($200 million)

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Aims to provide Universal Health Coverage and scaling up the national health insurance scheme. This will increase access to service delivery - for HIV, tuberculosis and malaria, and will likely have a positive impact on overall health outcomes

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In the early stages of a multi-phase project over 10 years (2023-2033).

Health, Nutrition, and Early Childhood Development Program

Debt Swaps (Debt2Health)

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Debt2Health allows countries to turn debt repayments into funding for life-saving health activities through the Global Fund

Under individually negotiated “debt swap” agreements, a creditor nation foregoes repayment of a loan when the debtor nation agrees to invest part or all of the freed-up resources into a Global Fund-supported program.

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Global Fund grant(s) in Debtor’s country or region

Impact

ART to additional 30,000 patients

Global Fund manages grant as a whole and reports results

• Target countries and programs
• Scalable and flexible mechanism
• Additional channel of collaboration

• Additional funding for health
• Debt relief frees up fiscal space
• Ownership and accountability

• Cost-efficiency
• Transparency
• Measurable, concrete results

Debt2Health debt swaps to date

Twelve transactions, thirteen countries, US$226 million in health investments

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1. The Middle East Response (MER) initiative provides essential HIV, TB and malaria services to key and vulnerable populations including refugees, internally displaced people, women and children in Iraq, Palestine, Syria and Yemen, as well as to Syrian refugees in Jordan and Lebanon

D2H program future outlook:

• €100m new D2H pledge at the 7^Th Replenishment Conference
• We are actively engaged with a few donors on new opportunities

What lies behind the successful implementation of Debt2Health?

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Set up a multilateral platform that oversees ongoing projects at scale. Debt swap proceeds can flow to pre-defined funding gaps

Lessons learned from the Global Fund experience with the implementation of Debt2Health swaps:

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Focus on incremental impact, not debt relief

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Complement, don’t replace

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Make it a Win-Win-Win solution: impact for the debtor country, a health contribution for the creditor country and additional lives saved through the Global Fund

Social Impact Bonds: The case of South Africa

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How does a social impact bond work?

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• Social investor puts up a portion or all of the money needed to deliver the service to reach preset targets above an agreed baseline (or counterfactual)
• An implementer or service provider is appointed to deliver the service
• Government or a donor buys those outcomes at an agreed price – the outcomes can be bought at the end once all targets are achieved, or they can be bought on a quarterly or semi-annual basis – this allows for a smaller investment and lowers the cost of the return – in this way the capital raised is being recycled
• Government only pays for successful outcomes
• Investors make modest returns but achieve social impact on behalf of their clients
• The entire instrument is aimed at improving performance and transferring risk to a social investor
• Each SIB has its own custom designed structure and logic

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• New approach to an age old problem, using financial incentives to improve program performance
• AGYW falling behind with respect to HIV incidence, unplanned pregnancy, HIV and pregnancy testing, antiretroviral treatment and antenatal care
• Put together a comprehensive, evidence based package of services targeting in-school AGYW
• In addition to the best package of services that provides a clinical service, the package also addresses mental health, gender based violence, age-disparate relationships and other drivers of risk
• A great deal of attention has been paid to making the service accessible including a non threatening way to enter into an individual risk self assessment process, creating safe spaces in the school environment and ensuring that teachers and the community are supportive.
• If the new approach works the plan is to expand to out of school AGYW, young sex workers and national scale up

Innovative resource mobilization for health

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Two examples: Lives and Livelihoods Fund (LLF) and WB & GF blending Côte d'Ivoire

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A US$2.5 billion concessional financing facility set up by the Islamic Development Bank and the Bill & Melinda Gates Foundation

​

LLF provides 35% concessional grant, combined with 65% IsDB OCR loan to eligible OIC countries

​

2016: Mobilized $32M for Senegal malaria programs

• Goal is to accelerate the achievement of pre-elimination of malaria (<1 case per 1,000)

​

2019-2020: Mobilized $50M for Benin primary care and community health worker programs

• Goal is to recruit, train and deploy doctors, nurses, health assistants and CHWs

​

An opportunity for blended financing from the Global Fund of 6M EUR to complement larger investments from the World Bank ($200 million)

​

Aims to provide Universal Health Coverage and scaling up the national health insurance scheme. This will increase access to service delivery - for HIV, tuberculosis and malaria, and will likely have a positive impact on overall health outcomes

​

In the early stages of a multi-phase project over 10 years (2023-2033).

Health, Nutrition, and Early Childhood Development Program

Innovative resource mobilization for health

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• The AIDS Levy – a 3% tax on the income of individuals, companies and trusts that is paid into the Zimbabwe National AIDS Trust Fund (ZNATF) to finance activities of the national AIDS response.
• Although 55% of the AIDS Levy budget is allocated to ART, this is only sufficient to purchase drugs for 11% of the 815,000 people on ART. - The AIDS Levy generates only 15% of the country’s annual HIV funding needs.
• Funds may be affected by prevailing economic circumstances such as hyperinflation as experienced during the 2006 – 2008.

• The National Health Insurance Scheme (NHIS) is a social intervention program introduced by government to provide financial access to quality health care for residents in Ghana

It is funded by:

• The National Health Insurance Levy (NHIL), which is 2.5% levy on goods and services collected under the Value Added Tax (VAT).
• 2.5 percentage points of Social Security and National Insurance Trust (SSNIT) contributions per month return on National Health Insurance Fund (NHIF) investments

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• The alcohol levy was introduced in November 2008 at a rate of 30% through the Levy on Alcoholic Beverages Fund Order.
• The levy was subsequently raised in 2010 to 40%, then 45% in 2013 and 55% in January 2015.
• Funds collected from this tax are used to support, among other things, public education and rehabilitation programmes as well as law enforcement measures to combat alcohol abuse.
• Lifelong ART treatment requires long term sustainable financing mechanisms. The alcohol levy is part of efforts to identify alternative sources of financing that contribute to the financial sustainability of the AIDS programme.

Using principles and lessons learned, well-designed IF has significant potential to drive programmatic impact

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Raising Finance for Delivery

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Fostering Innovation

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Increasing efficiency

Principles for assessing IF

• Sustainability
• Stability
• Progressivity
• Administrative efficiency
• Side effects

Linked to priority areas

Debt swaps

Blended finance

Thank you

The Global Fund to Fight�AIDS, Tuberculosis and Malaria

+41 58 791 1700

theglobalfund.org

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