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Global Financing Facility (GFF) in Support of Every Woman Every Child Workshop – Day 4 – Private Sector Engagement


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A presentation from the Global Financing Facility (GFF) in Support of Every Woman Every Child Workshop, held in Nanyuki, Kenya.

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Global Financing Facility (GFF) in Support of Every Woman Every Child Workshop – Day 4 – Private Sector Engagement

  1. 1. Global Financing Facility in support of Every Woman Every Child Private Sector Engagement November 2015
  2. 2. Introduction • GFF is positioned as a pathfinder for a new era of sustainable financing for development by moving beyond just ODA to: – Mobilize domestic resources (from both public and private sources) – Attract additional external resources – Employ innovative strategies for resource mobilization and service delivery • Private sector is key to realizing the GFF objectives: – Flow of international private finance dwarfs ODA: US$135 bn ODA vs. US$778 bn FDI and US$400 bn remittances – Private expenditure on health is >50% of total health expenditure in more than 60% of GFF countries – Many countries already have mixed health systems, although the private sector is not sufficiently leveraged to deliver on national health goals 2Source: World Bank; review of national health accounts
  3. 3. Objectives of the GFF’s engagement with the private sector • Overarching objective: – To use the GFF to draw in the financial resources and capacity of the private sector to help countries achieve RMNCAH outcomes • Three pathways: 1. By developing innovative financing mechanisms to draw in private sector capital for Investment Case financing 2. By facilitating partnerships for Investment Case needs between global private sector and countries 3. By leveraging private sector contributions in countries to deliver on Investment Case objectives 3
  4. 4. 1. GFF innovative financing mechanisms The GFF has a unique opportunity to broker impactful financing structures and effective, market based solutions for investments into RMNCAH. With the right incentive structures in place, countries could raise additional financing through vehicles such as: • Pay for Performance Structures: IBRD loan buy-downs, development impact bonds to strengthen health systems, preparedness and surveillance, and support longer term, diversified financing needs; • Working Capital Financing: risk-sharing facilities to encourage greater domestic/local funding for service providers, production or technology upgrades; • Private Equity/Debt Structures: health bonds, investments leveraging grants and concessional finance to support infrastructure, technology or scale up of new innovative global health products 6
  5. 5. 5 1. GFF innovative financing mechanisms: performance-based IBRD loan buy-down Performance indicators Outcome payers (donors, private sector) GFF IBRD Results Loan at IBRD rate Performance-based buy-down of IBRD interest to concessional terms** Capital Market Investors Health Programs Borrowing Country* Funds for performance payments *If the borrowing country is an IDA one, there is an additional requirement for a guarantor to allow IBRD lending to IDA countries Buy IBRD bonds  Incentivizes greater domestic investments in health systems by enabling countries to access resources beyond constrained IDA envelopes
  6. 6. 2. Facilitating partnerships for Investment Case needs • Great interest among private sector actors at global level; keen to be involved along continuum of care through sustainable business models • Partnerships closely linked to country Investment Cases: GFF facilitates partnerships for innovation, global public goods and resource mobilization to match specific needs in Inv. Cases (e.g.; TA for supply chain improvement, medical technology procurement, innovative service delivery) • Partnerships may be: – Between private sector and countries • Safaricom, Merck, Philips, GSK, Huawei and Kenya Healthcare Federation PPP in Kenya to provide resources and expertise for RMNCAH – With private sector for global public goods • DITTA*, WHO, medtech companies for country procurement of medtech 6*Global Diagnostic Imaging, Healthcare IT, and Radiation Therapy Trade Association
  7. 7. 2. Wide range of private sector actors to be leveraged for RMNCAH • In most countries, achieving GFF goals is unlikely without engaging with actors outside government system • Range of possibilities at global, regional, and national levels: – Service providers (e.g., private doctors/clinics/hospitals, including FBOs) – Pharmaceutical manufacturers – Medical technology companies – Financial sector: • National • International (e.g., private investors in IBRD or IFC bonds, private equity firms investing in healthcare companies) – Private insurers: purchasing technical services for government sponsored health insurance schemes – Mobile technology providers/mHealth companies – Management and logistics: • Supply chain/distribution companies • Management consulting firms supporting development of management capacity (Technical Support Units) – IT firms (e.g., tech firms working on big data, such as in the context of CRVS) 7
  8. 8. 3. Leveraging private sector to deliver on the Investment Case • Heterogeneity across countries and services – on level of private utilization and composition of private sector  Country private sector engagement will be tailored to health system context: ensure Investment Cases set priorities to guide leverage of private sector resources, capacity and innovation 8 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Chad Niger Nigeria Benin Rwanda Guinea Mali Cameroon DRC Malawi Kenya Liberia BurkinaFaso Lesotho Uganda CongoRep Zimbabwe Senegal Madagascar Ghana Tanzania Zambia Swaziland SierraLeone Ethiopia Mozambiq… Namibia Source of care for pediatric curative care, poorest quintile by type of provider (Sub-Saharan Africa, latest survey) Other Non-Formal Friends/Relatives Traditional Practitioner Shop Other Formal Mobile clinic CHW Religious Hospital Private Doctor Pharmacy Hospital/Clinic Public Source: DHS data Source: DHS data
  9. 9. 3. Leveraging private sector to deliver on the Investment Case: proposed country approach • Establish the country platform • Conduct core analytics and stakeholder consultations (building on Health in Africa and any existing private sector work, expanded to fit GFF scope) • Identify private sector engagement opportunities for Investment Case and health financing strategy priorities • Develop timelines for implementation of selected opportunities • Support government and partners to implement through relevant tools of engagement • Document process and lessons learned 9