How a new pandemic preparedness fund at the World Bank could work

On Thursday, the World Bank’s board is expected to approve the establishment of a new fund to help low- and middle-income countries prepare for future pandemics. The fund, which already has more than $1 billion in pledges, will be housed at the multilateral lender. Though details are still being ironed out, Devex has a breakdown of how it might work.

The Group of 20 leading rich and developing economies asked the bank to set up a financial intermediary fund, or FIF — which is effectively a trust fund that pools public and private money — for pandemic prevention, preparedness, and response.

According to the World Bank, the United States has so far pledged $450 million, an amount matched by the European Commission — making the pair the two largest planned contributors to date. Additional donors include Germany, Singapore, and Indonesia, as well as Wellcome and the Bill & Melinda Gates Foundation.

The fund seeks to close an estimated $10.5 billion annual gap in global pandemic preparedness and response financing. That’s the minimum amount of new money needed each year to “support equitable global access to vaccines, testing and therapies, global surveillance, research and development, manufacturing and health system strengthening,” according to the World Health Organization and World Bank, which worked together on the FIF proposal.

Observers note this is a new, dedicated pool of money to spur investments in pandemic preparedness and public health. The bank’s white paper specifically says, “It is imperative that FIF financing be truly additional, and not merely take existing resources from other important development priorities.”

However, some critics from civil society groups have expressed concern that donors will have more power than recipient countries. They also warn that the FIF could hurt “universal and equitable access to care” by investing in “high-end private healthcare providers” at the expense of public ones.

The timeline to create the legal entity at the bank has been somewhat rushed in order to approve it before the bank’s fiscal year ends later this week. Work will continue on finessing the structures for financing, governance, and funding allocation in the months ahead.

“The board approval is just one important step in setting up the FIF, providing the legal basis,” the World Bank said.

Here's what is known so far, based on an internal memorandum from World Bank president David Malpass that Devex obtained ahead of the board meeting, as well as the official white paper outlining the proposed fund.

What is a FIF, anyway?

An intermediary fund is a specialized pool of money from varied sources that can be used for public goods. As the name suggests, the goal is not to directly fund governments, but for the fund to be an intermediary to the implementing agencies.

An example of a more famous of this kind is the Global Fund to Fight AIDS, Tuberculosis and Malaria. They often come with their own governance structures and specific mandates.

What will be funded?

The fund is meant to “bolster” pandemic prevention, preparedness, and response. According to the proposal, focus areas include strengthening disease surveillance, the health workforce, laboratory systems, and community engagement, as well as emergency communication, coordination, and management at the country level, which are part of the core capacities needed for countries to effectively implement the International Health Regulations. 

The fund could also invest in local health systems, support global and regional institutions, and provide technical assistance, according to the bank proposal.

A source, who is familiar with the discussions but requested anonymity as they are not authorized to speak, said the fund’s focus on addressing IHR gaps at the country level is a positive step as it helps clarify its focus on pandemics and not as a “health catch-all fund.” But it needs a “stronger up-front prioritization,” since “doing a little bit of everything, everywhere, with everyone, won't help prevent the next pandemic, but will result in a lot of costly process, and an unclear mandate,” the source said.

Who will fund it?

At present, the fund has received over $1 billion in pledges, all designed to be new money that can be deployed as grants. In the near term, it is expected to rely primarily on official development assistance from major donor nations, though the goal is for the fund to receive additional contributions from those donors. None of the money will come from existing World Bank funds.

The proposal considers either ad hoc replenishments or regular replenishment cycles for the fund, depending on how big and complicated it gets.

“We would have … liked to see more emphasis on the need for all countries to contribute to the fund as well as to tap new sources of financing beyond current official development assistance,” Carolyn Reynolds, a co-founder of the Pandemic Action Network, told Devex via email.

Who will govern the fund?

A governing board will be in charge of the fund’s overall direction and will operate independently of the World Bank. The details must still be worked out among founding donors. Per the white paper, the bank will act as trustee, secretariat, and one of the implementing entities.

Civil society groups have argued that they should have a seat at the table beyond observer roles — which is all they may get under current proposals.

Meanwhile, a technical advisory panel that includes WHO and other public and private sector experts is expected to advise the board on the latest developments in pandemic prevention, preparedness, and response and evaluate funding proposals. WHO will also serve as another implementing entity and support the work of the secretariat — which would be filled by World Bank employees.

Who will be eligible for financing?

Only eligible implementing entities can access the fund. Apart from the World Bank and WHO, other multilateral development banks, the International Monetary Fund, and other United Nations agencies are eligible as implementing entities, under the World Bank’s FIF Management Framework. The MDBs, for example, could then move the funds to governments.

Recognized implementing entities will be involved in a project’s preparation, appraisal, supervision, and monitoring, but can only act as an observer in the fund’s governing body.

The fund’s founding donors however have also recommended the inclusion of other global health organizations such as the Coalition for Epidemic Preparedness Innovations; Gavi, the Vaccine Alliance; and the Global Fund as implementing entities. Including other entities will be subject to a risk assessment, but is possible, the bank said.

Reynolds said regional organizations such as the Africa Centres for Disease Control and Prevention, and civil society organizations should also be included as eligible implementing agencies.

What are the concerns?

One of the concerns expressed by certain civil society groups is that the FIF could favor the private sector over public health agencies.

“The FIF should not represent an opportunity to fund private health care and to make profit out of pandemic prevention, preparedness, and response,” said Chiara Mariotti, a development finance expert at the European Network on Debt and Development.

Meanwhile, Amanda Glassman, an expert at the Center for Global Development, said that while preparedness is a good investment for the future, the World Bank will need reforms so it can better respond to outbreaks, including through vaccine funding.

“While ‘response’ is in the title of the current white paper, it is difficult to see how the new FIF could accommodate response financing as well as preparedness for emerging threats in its current version,” Glassman wrote earlier this month.

She also cautioned that the “success of this new FIF will depend entirely on whether it is large enough to match the global gaps identified.”