Pledge Guarantee for Health is an innovative financing partnership designed to increase the availability and predictability of funding from international donors for health commodities. Through a 5-year partial guarantee from the governments of the United States and Sweden, PGH is able to leverage $100 million in credit from commercial banking partners which, in turn, extend short-term credit to traditional donor aid recipients. Recipients are empowered to use committed donor funding in advance of disbursement, resulting in increased buying power, greater value, accelerated procurement and delivery, and, ultimately, more lives saved.
Through this public-private partnership, PGH structures financing to grant recipients on the basis of their pending aid commitments. PGH transactions average six months in duration, allowing the $100 million in credit to be turned over twice annually. Over the course of USAID and Swedish Sida’s 5-year commitment, this translates to a tremendous amount in new lending capacity. Having proven the concept and delivered impressive results over two years, PGH now moves into its next phase as an independent entity, spearheading new partnerships that will take the concept to scale. This unique alliance of businesses, non-profits, governments and donors exemplifies the innovative partnerships that are crucial to meeting 21st century development goals.