1. Allocation Communication, March 2014
New Funding Model
Country Allocations
1
12 March 2014

2. Allocation Communication, March 2014
Total funding from Global Fund is increasing
• The total funds for allocation are 20% higher than what we have disbursed in the
past.
- The total funds to be allocated to countries, available as of January 1, 2014 (including
existing funds): US$ 14.8 billion
- Average implied funding level: US$ 3.7 billion per year
- This compares favorably vs. the average annual disbursement rates of US$ 3.2 billion.
However, this is less than the higher rate of disbursement in 2013 of US$ 3.9 billion
• In addition, the Global Fund will allocate:
- US$ 950 million of incentive funding which will be awarded to ambitious programs that
deliver impact in country – which increases the average implied funding level to above
US$ 3.9 billion per year
- US$ 200 million for new regional grants and US$ 91 million to finish existing regional
grants
This represents US$ 16 billion for countries
Key messages1
2

3. Allocation Communication, March 2014
On average, most countries will receive more funds
• On average, countries will receive
more funds from the Global Fund for
this Replenishment period than they did
in the past.
• In many countries, funds from the
Global Fund include (only) existing
funds that must be used for maximum
impact
• For many countries, 2013 was a peak
year for GF disbursements as the
Global Fund ‘unstuck’ grants and a
backlog of funds flowed to countries.
This means that there will be a
decrease in funding compared to 2013
levels.
0
1
2
3
4
5
2010 2011 2012 2013
Disbursements
US$
in bn
Key messages for countries1
3.1
2.6
3.3
3.73.9
3.2
2010-
2013
(average)
2014-
2017
(average)
3

4. Allocation Communication, March 2014
Most countries are under-funded relative to need and should
be ambitious in what they plan to achieve
In most countries, the allocation amounts (regardless of whether a country is
over- or under-allocated) will still be insufficient to cover the gaps vs. real need
- Most countries are under-funded relative to their needs.
- This should not limit planning and ambition – to defeat the diseases, countries
need to think creatively on how to use all resources available
The Global Fund is committed to working in partnership with countries, civil
society, donors, technical partners to maximize impact
- By combining the skill and knowledge and determination of everyone responding to
these diseases, we will find the best solutions
- By prioritizing and focusing on maximum impact, we may be able to achieve more
in the future than seems possible today
Key messages1
4

5. Allocation Communication, March 2014
Grant implementation period is flexible
The Global Fund will work flexibly with countries to determine the best strategy to
invest for maximum impact, including adapting the implementation periods
• Less than 1 year on average to access funds (including country dialogue, concept note
development, TRP and GAC reviews, grant-making Board approval)
• The typical duration of a grant is three years, but the Global Fund can work with countries to
be flexible on timing, and to significantly shorten the timeline to maximize impact
• Timeline will be determined based on multiple factors including:
- Ambition to achieve increased impact and sustain gains
- Relative under-/over-allocation of countries
- Alignment with national plans and schedules
• Country dialogue will be the main mechanism to determine the optimal grant duration.
Key messages1
5

6. Allocation Communication, March 2014
• Funding requests are based on quality national strategies
• Resources are focused on targeting the right populations
• Decisions on the allocation of resources are based on evidence/data
• Costs can be driven down by optimizing procurement/supply chain
• Existing grants should be used as effectively as possible, ensuring that
programs are regularly evaluated and grants reprogramed when it
makes sense for maximum impact
• Any additional funding should be harmonized with existing funding;
disease programs should be viewed in a holistic manner
• Donor funding should be coordinated and aligned in-country to avoid
duplication/inefficiencies
Stronger resource prioritization is critical to achieving impact
Key messages1
Resources
available to
countries
Strategic
investment for
maximum
impact
6

7. Allocation Communication, March 2014
Contents
7
Allocation Methodology

8. Allocation Communication, March 2014
Allocation methodology
8
HIV
(50%)
Malaria
(32%)
TB
(18%)
Band 1
Band 2
Band 3
Band 4
Apply
Allocation
Formula
+
Qual.
Factors
Apply
Qual.
Factors
(within
Band)
Country
allocation
Eligible
Components
Total
Amount
to
allocate
to
Country
Bands
Global Disease
Split
Indicative split
from Global
Fund
HIV
($25m)
HSS
($15m)
TB
($35m)
HIV
($35m)
Malaria
($30m)
TB
($35m)
Final program
split at country
level
Example: Country A
Total indicative funding
= $100m
Malaria
($25m)
Allocation methodology2

9. Allocation Communication, March 2014
How does the allocation formula work? (Part I)
Calculate a country
share for each
eligible disease
component
Apply qualitative
adjustments to
country share
1
2
Allocation methodology2
9

10. Allocation Communication, March 2014
How does ‘Minimum Required Level’ work?
• The last 4-year (2010-2013) disbursement data available at the end
of 2013, with a 25% reduction
• The existing grant pipeline remaining undisbursed as of 1 January
2014**
The MRL is the
greater of the
following
Allocation methodology2
• A number of countries have historically received more funding than the allocation formula
provides (based on disease burden and ability-to-pay)
• MRL is a provision for ‘graduated reductions’: the countries that would receive a lower
allocation instead get their ‘Minimum Required Level’ (MRL)*
* Countries may be reduced below their MRL, due qualitative adjustments
** This includes: (1) committed funding that remains undisbursed; (2) uncommitted transition funding of the new funding model
approved by the Board; and (3) uncommitted rounds-based funding (whether or not Board approved). Any such funding not yet
approved by the Board will be adjusted by performance-based funding criteria and for Board-mandated savings.
10

11. Allocation Communication, March 2014
Under/over allocated components
11
Allocation methodology2
• Significantly over-allocated components (150% above original allocation) are not
eligible for incentive funding.
• The Global Fund will work with over-allocated countries to take steps to move
towards a more appropriate allocation in the future
Allocation after MRL
adjustment
(e.g. large Phase II
grant signed in 2013)
Original allocation
formula amount
Under-allocated
country
Allocation after
MRL adjustment
(e.g. low past
disbursement, low
existing grant
pipeline)
Over-allocated
country
Original allocation
formula amount

12. Allocation Communication, March 2014 12
Determine country
disease allocation
Determine total
notional funding
amount per country
3
4
Aggregate all
country allocations
to their
relevant band
5
Notional funding
amount for country A
Notional funding
amount for country B
Notional funding
amount for country C
Band 1
Band 2
Band 3
Band 4
How does the allocation formula work? (Part II)
Allocation methodology2

13. Allocation Communication, March 2014
Country band composition
Allocation methodology2
13
Disease Burden
Income
Lower Higher
Lower
Band 1
Band 3Band 4
Band 2
GNI per capita US$ 2,000
Lower-
income, higher-
burden
39 countries
Higher-
income, higher-
burden
11 countries
Lower-
income, lower-
burden
18 countries
Higher-
income, lower-
burden
55 countries
0.26
composite
score
US$ 1.1bn US$ 1.5bn
US$ 0.9 bn US$ 11.3 bn
US$ 83 million of
incentive funding
available for Band 3
US$ 825 million of
incentive funding
available for Band 1
US$ 42 million of
incentive funding
available for Band 2
Band 4 countries
have incentive
funding calculated
into their allocations
Higher

14. Allocation Communication, March 2014 14
The notional country
disease allocation resulting
from the allocation formula
is further adjusted based
on a number of qualitative
factors
Any adjustments made have to be offset
by other adjustments in the same band.
The majority of the qualitative
adjustments, (except external
financing, minimum required level and
WTP) are made within the Band
Qualitative adjustments
The formula amount is decreased to 70%
before application of qualitative factors
1
2
3
Allocation methodology2

15. Allocation Communication, March 2014 15
How qualitative adjustments affect the allocation
Criteria Allocation impact
External Financing
Minimum required level
Performance
Impact
Increasing rates of infection
Risk
Absorptive Capacity
Willingness to Pay
Maximum decrease or increase in allocation of 50%
The higher of the two totals: total of past 4 years’
disbursement data reduced by 25% or total existing pipeline
Increase of up to 25% for good/exceptional implementation
Increase or decrease of up to 15%
Increase of 5%
Increase of up to US$ 1 million
Decrease (no defined amount)
15% of the allocation is conditional upon government’s
willingness to make an additional investment into the disease
program
Adjust-
ments
to
formula
Adjust-
ments
during
CD
Other considerations Decrease (no defined amount)
Adjust-
ments
within
Bands
Allocation methodology2

16. Allocation Communication, March 2014
Example: Over-allocated disease component
18.5
90.9
83.6 84.6
sed on Disease Burden / Ability to Pay / External FinancingAllocation After Adjustments for MRLAllocation After Adjustments for Performance, Impact, Increasing Rates, and RiskAllocation After Adjustments for Absorptive Capacity and Other
Allocation through allocation process ($M)
*Note: Qualitative factor adjustments include those for performance, impact, increasing rates of infection, risk, absorptive capacity and other
considerations
396% increase to
be at 75% of past
disbursements
7% decrease for B1
performance rating and
limited / no impact
$1M increase for other
considerations
Allocation methodology2
16

17. Allocation Communication, March 2014
Example: Under-allocated disease component
35.1
16.9 17.2
25.8
sed on Disease Burden / Ability to Pay / External FinancingAllocation After Adjustments for MRLAllocation After Adjustments for Performance, Impact, Increasing Rates, and RiskAllocation After Adjustments for Absorptive Capacity and Other
Allocation through allocation process ($M)
~52% decrease because did not
have high past disbursements /
existing funds
~2% increase for
performance, impact, inc
reasing rates, etc
~8M increase for other
considerations.
Allocation methodology2
17

18. Allocation Communication, March 2014
Appendix

19. Allocation Communication, March 2014
Parameters for disease burden indicators
Allocation methodology2
Indicator Proposed specification
HIV
burden
[People with HIV]
data from 2012
TB
burden
[1 * HIV negative TB incident cases],
[1.2 * HIV positive TB incident cases],
[8 * estimated MDR-TB incidence],
[0.1 * 50% of estimated number of people with
known HIV positive status]
data from 2012
Malaria
burden
[1 * cases],
[1 * deaths],
[0.05 * incidence rate],
[0.05 * mortality rate]
data from 2000, indicators normalized
19

20. Allocation Communication, March 2014
Ability-to-pay factor
Allocation methodology2
LICs
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
0 2,000 4,000 6,000 8,000 10,000 12,000 14,000
Ability-to-pay factor Eligible countries as of 2013
Counterpart Financing Thresholds
GNI per capita,
Atlas method
Ability-to-pay factor
0.95
LMICs UMICs
20