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CONFIDENTIAL

Bridge Financing for
Global Health:
Maximizing Donor Aid through
Domestic Innovative Financing

Pledge Guarantee for Health Overview
Addis Ababa - November 2013
CONFIDENTIAL

F4D’s focus is to leverage innovative financing to bring about funding
efficiency in the product and service markets of international
development
• Bilateral/Multilateral Donors

Products

• Foundations
• Sovereign/National
• Private Sector
• Hybrids (SMOs)

Services

Funding

2
CONFIDENTIAL

In a resource constrained world, there is a need to recapture the value
we lose due to inefficiencies
Advocacy

Procurement Mobilization

T.A./Training

3
CONFIDENTIAL

PGH uses bridge financing to address cash flow problems in
development
Advocacy

Procurement Mobilization

T.A./Training

Commercial bank
Funding source

4
Donor funds arrive and pays bank

(e.g. Donor)

2
1

Commercial bank
supplies Letters of
Credit (and
payment) on behalf
of MoH

Guarantor

Guarantees 50% of
donor funding

3
1
MOH uses Letters of Credit
to purchase order,
manufacturer delivers
supplies
Manufacturer
(e.g. Pharmaceutical
company)

Ministry of Health / Civil Society
(PGH customer)

4
CONFIDENTIAL

PGH uses bridge financing to address cash flow problems in
development
Advocacy

Procurement Mobilization

T.A./Training

5
CONFIDENTIAL

PGH uses bridge financing to address cash flow problems in
development
Advocacy

Procurement Mobilization

Advisory

T.A./Training

Transactional

A Procurements
Without
Transactions

Nigeria
Comoros
Islands
Ethiopia

Zambia
B
Policy
Advancements

D

Senegal
C
Pricing
Discounts

Facilitated
Transactions

Ethiopia
Philippines

6
CONFIDENTIAL

PGH intends to promote knowledge transfers that will enable
sustained interventions
Advocacy

Procurement Mobilization

T.A./Training

7
CONFIDENTIAL

The PGH value proposition is already starting to see quick wins

Leverage private
capital to smooth
donor funding
flows

Reduce
business risk
for suppliers to
incentivize
investments in
increased
quality,
affordability
and access

Increase
procurements
that have
greater value
for money
baked in

Accelerated

Empowered

Efficient

Ability to rapidly issue
bridge funding while
waiting for donor
disbursement to avoid
stock-outs which can
have dangerous impacts
on both patients and the
community

Allow buyers to remove
inefficiencies in the
procurement process
that cause suppliers to
price in premiums (e.g.
better payment
certainty, pooled
procurement, etc)

Increase aid
effectiveness

With better control of the
procurement timing
recipients will be able to
avoid emergency
production and delivery
which are costly and
come at the expense of
additional beneficiaries
8
CONFIDENTIAL

PGH’s M&E methodology is routed in a theory of change driven on
delivering value for money in both Health and Financial systems
irrespective of deals

a)

Advocacy

Output:

Outcomes:

1a/b/c: $ saved, extra
product procured

(i.e. Comoros)

Health System
Value-for-Money

b) NonGuarantee Deals

Impact Indicators:

2a/b/c: Health/social impact
(deaths averted, CYP)
3a/b/c: Supply chain speed (time
to delivery, time to disbursement)

$ mobilized

(i.e. Philippines)

4a/b/c: Financial efficiency ($
mobilized per Guarantee $)

c) Guarantee
Deals
(i.e. Zambia, Ethiopia)

Financial System
Value-for-Money

5a/b/c: Financial scale
(Net $ mobilized)

11
CONFIDENTIAL

With the help of our partners we are well on our way

9

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Bridge financing for health

  • 1. CONFIDENTIAL Bridge Financing for Global Health: Maximizing Donor Aid through Domestic Innovative Financing Pledge Guarantee for Health Overview Addis Ababa - November 2013
  • 2. CONFIDENTIAL F4D’s focus is to leverage innovative financing to bring about funding efficiency in the product and service markets of international development • Bilateral/Multilateral Donors Products • Foundations • Sovereign/National • Private Sector • Hybrids (SMOs) Services Funding 2
  • 3. CONFIDENTIAL In a resource constrained world, there is a need to recapture the value we lose due to inefficiencies Advocacy Procurement Mobilization T.A./Training 3
  • 4. CONFIDENTIAL PGH uses bridge financing to address cash flow problems in development Advocacy Procurement Mobilization T.A./Training Commercial bank Funding source 4 Donor funds arrive and pays bank (e.g. Donor) 2 1 Commercial bank supplies Letters of Credit (and payment) on behalf of MoH Guarantor Guarantees 50% of donor funding 3 1 MOH uses Letters of Credit to purchase order, manufacturer delivers supplies Manufacturer (e.g. Pharmaceutical company) Ministry of Health / Civil Society (PGH customer) 4
  • 5. CONFIDENTIAL PGH uses bridge financing to address cash flow problems in development Advocacy Procurement Mobilization T.A./Training 5
  • 6. CONFIDENTIAL PGH uses bridge financing to address cash flow problems in development Advocacy Procurement Mobilization Advisory T.A./Training Transactional A Procurements Without Transactions Nigeria Comoros Islands Ethiopia Zambia B Policy Advancements D Senegal C Pricing Discounts Facilitated Transactions Ethiopia Philippines 6
  • 7. CONFIDENTIAL PGH intends to promote knowledge transfers that will enable sustained interventions Advocacy Procurement Mobilization T.A./Training 7
  • 8. CONFIDENTIAL The PGH value proposition is already starting to see quick wins Leverage private capital to smooth donor funding flows Reduce business risk for suppliers to incentivize investments in increased quality, affordability and access Increase procurements that have greater value for money baked in Accelerated Empowered Efficient Ability to rapidly issue bridge funding while waiting for donor disbursement to avoid stock-outs which can have dangerous impacts on both patients and the community Allow buyers to remove inefficiencies in the procurement process that cause suppliers to price in premiums (e.g. better payment certainty, pooled procurement, etc) Increase aid effectiveness With better control of the procurement timing recipients will be able to avoid emergency production and delivery which are costly and come at the expense of additional beneficiaries 8
  • 9. CONFIDENTIAL PGH’s M&E methodology is routed in a theory of change driven on delivering value for money in both Health and Financial systems irrespective of deals a) Advocacy Output: Outcomes: 1a/b/c: $ saved, extra product procured (i.e. Comoros) Health System Value-for-Money b) NonGuarantee Deals Impact Indicators: 2a/b/c: Health/social impact (deaths averted, CYP) 3a/b/c: Supply chain speed (time to delivery, time to disbursement) $ mobilized (i.e. Philippines) 4a/b/c: Financial efficiency ($ mobilized per Guarantee $) c) Guarantee Deals (i.e. Zambia, Ethiopia) Financial System Value-for-Money 5a/b/c: Financial scale (Net $ mobilized) 11
  • 10. CONFIDENTIAL With the help of our partners we are well on our way 9