The U.S. International Development Finance Corporation (DFC), in conjunction with Citi, on Wednesday, announced it will be 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.
Wednesday’s COVID-19 Summit was an important milestone in helping drive the momentum the global community needs to succeed in the fight against COVID-19. In the first eight 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.