The World Bank approves $12B for vaccine finance. Will other financial institutions follow?

MANILA — The World Bank board’s approval of a $12 billion financial package this week is a welcome boost to financing for COVID-19 vaccines. Some international financial institutions are expected to follow, although it’s unclear when and how exactly financing from these institutions will support global efforts.

Financing from multilateral financial institutions is significant given the global attention and demand for COVID-19 vaccines, and calls for financing toward global initiatives such as the COVAX Facility, which will serve as a procurement platform for COVID-19 vaccines. The facility includes a mechanism — known as the COVAX Advance Market Commitment — through which low- and middle-income countries can get access to COVID-19 vaccines.

Mobilizing the needed funding for the COVAX AMC has been a challenge. As of Oct. 14, financial commitments total $1.8 billion, $200 million short of its $2 billion goal for 2020. The mechanism aims to raise an additional $5 billion in 2021 to deliver 2 billion doses of COVID-19 vaccines.

What are multilateral financial institutions committing?

The World Bank said its latest financial package is for LMICs to be able to purchase and distribute tests, treatments, and vaccines for COVID-19 for their citizens. The funding is part of the bank’s $160 billion financing package announced in April, and will support multilateral efforts led by the World Health Organization and COVAX, according to a news release.

COVAX is the vaccines pillar of the Access to COVID-19 Tools Accelerator, which is aimed at expediting the development and production of COVID-19 tools, and ensuring their equitable distribution.

“It is definitely an exception for the World Bank to sort of state that they would be purchasing something with their money ex ante, because the whole notion of the World Bank is that it funds country demands,” Amanda Glassman, executive vice president and senior fellow at the Center for Global Development, told Devex.

“But in this case, I guess they felt safe enough that all countries were planning to demand this, and that it would make sense to ... have some earmarked monies in this regard,” she continued.

Meanwhile, John Nkengasong, director of the Africa Centres for Disease Control and Prevention, said during a press briefing on Thursday that the African Union Commission will be having discussions with the African Development Bank to explore further areas of partnership and support, including COVID-19 vaccine financing for the African continent.

He also said that the African Export-Import Bank is committing up to $5 billion to work with the Africa CDC and the African Union Commission to “make sure that we procure enough vaccines for the continent.”

“Once that arrangement is finalized and we are ready to make an announcement it will be brought to your attention,” he said.

The Asian Development Bank meanwhile referred Devex to a speech made by President Masatsugu Asakawa in September, during the second phase of the bank’s annual meeting: “ADB will play a role in supporting the efforts of our developing members to secure access to safe and effective vaccines, and to formulate strategies for equitable delivery.” Asakawa added that the bank will do this through collaborations with WHO, the World Bank, Gavi, the Vaccine Alliance, as well as vaccine experts and pharmaceutical companies.

A spokesperson for the Asian Infrastructure Investment Bank told Devex: “If a member requests for financing to support access to COVID-19 vaccines, we could consider [it].”

Contributions to the COVAX AMC mechanism to date have come from countries, philanthropy, charity, and the private sector, but none from multilateral development banks. Although a document of contributions to the mechanism does include €400 million ($468..4 million) from Team Europe, or the European Commission and the European Investment Bank, in the form of guarantees.

The Gavi board recently approved a policy that economies eligible for the COVAX AMC would be sharing the costs for COVID-19 vaccines and their delivery, for up to $1.60 to $2 per dose — a decision questioned by some groups.

A Gavi spokesperson told Devex over email the decision was made to help “promote country ownership, global solidarity, and unlock new funding from sources such as multilateral development banks.”

However, flexibilities will be made on a “case-by-case basis until at least the end of 2021” to ensure that cost-sharing won’t prevent or delay COVID-19 introduction in these countries, and that economies won’t have to divert resources from other routine vaccination programs.

How should the $12 billion World Bank funding be used?

Details are scant on how the World Bank’s $12 billion financial package will be disbursed, and how it will exactly support COVAX. Health experts recommend however that apart from formally linking to the facility, the bank can use its financing to further diversify the portfolio of COVID-19 vaccines under COVAX. The bank can also push for more transparency with the global initiative.

“It's been quite closed doors, which is appropriate during the design phase. But it's now time to sort of socialize what this looks like and put the contracts out in the open so we can understand what the offer really is to manufacturers to incentivize … the production of certain kinds of vaccines,” said Glassman.

The bank should also look into regulatory issues likely to come up with COVID-19 vaccine manufacturing and distribution, as well as look into how it can support vaccine manufacturing capacity globally.

Dr. Jerome Kim, director-general of the International Vaccine Institute, ponders whether the bank could help LMIC vaccine manufacturers engage in and scale up production of COVID-19 vaccine, or in completing testing of their vaccines. The World Bank could also increase funding to the Coalition for Epidemic Preparedness Innovations, which invests in research for vaccines against emerging infectious diseases.

Indian company Bharat Biotech has a COVID-19 vaccine called Covaxin, which is in Phase-2 clinical trial. Partly government-owned Biovac in South Africa meanwhile is reportedly in talks with pharmaceutical companies to manufacture COVID-19 vaccines.

The bank could also look into strengthening health systems to deliver COVID-19 vaccines needed globally, including strengthening vaccine safety reporting systems, given the little information currently available on vaccines’ long-term safety and effectiveness, Kim said.

“Could this be a way to strengthen health systems as a prelude to universal health care?” Kim asked.

Glassman said the scale of the COVID-19 crisis is so huge that international financial institutions are playing an important role, although she thinks more needs to be done. However, she argued a lot depends as well on financial institutions’ shareholders.

“It’s down to the will of the higher income countries. So it's not so much should [international financial institutions] have a role. They should absolutely have a role. But the question is, is there the will of their member countries for them to have the role that they need at the scale that they need?” she said.

Sara Jerving contributed reporting.