The U.S. International Development Finance Corporation will provide $383 million in political risk insurance to help some countries meet a key condition of purchasing COVID-19 vaccines through Gavi, the Vaccine Alliance and the international COVAX program, the agency announced Wednesday.
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The announcement came alongside U.S. President Joe Biden’s Global COVID-19 Summit, which took place amid the United Nations General Assembly, and is part of his country’s commitment to fighting the pandemic worldwide.
The political risk insurance aims to solve a major problem for several countries that are purchasing vaccines through Gavi.
While low-income nations typically receive vaccines as donations, some middle-income countries buy them outright.
Having political risk insurance is one of the conditions for self-financing countries to obtain the vaccines, and while some nations have bought it in private markets, others have not been able. That is why DFC “stepped in,” a senior official at the agency — who asked for anonymity to discuss sensitive details — told Devex.
Nine middle-income countries in the Middle East, Latin America, Central America, and Eastern Europe will receive the insurance — but the official declined to specify which ones, citing an agreement with Gavi.
While DFC prioritizes low-income countries, “for anything to do with saving lives, we will use our tools to help upper-middle-income countries as well,” the official said, adding that this was an “easy call.”
In 2021, DFC has provided nearly $600 million in commitments related to COVID-19 vaccines, according to the agency, and has “had a significant push this year on global health-related investments,” the official said.
Over the last five years, DFC and its predecessor organization, the Overseas Private Investment Corporation, averaged about $126 million annually in health care-related investments around the world, the official said. This year, it has invested nearly five times that, with much of that going through a few large deals around vaccine manufacturing. This financing is intended to enable the production of about 2 billion vaccine doses by the end of 2022 and is aimed at building local and regional capacity.
At the summit, Biden asked countries to “step up,” and he set out key targets: “vaccinate the world”; “save lives now” by producing oxygen, scaling testing, and improving personal protective equipment supplies; and “build back better.”
DFC will continue to play a role in that effort, and global health “will remain a high priority,” the official said. And while it is hard to predict how much the agency might invest in the year ahead, global health will be a clear focus, the official added.
This coverage exploring innovative finance solutions and how they enable a more sustainable future, is presented by the European Investment Bank.