New Lending Plan Speeds Global Health Aid Distribution

woman with mosquito bedding

With the help of the private sector, the UN is making progress toward getting life-saving health supplies to aid recipients much faster. Pledge Guarantee for Health (PGH) is a new lending initiative that ropes in banks and other private sector players to help make financial loans to governments when they need re-stocking of supplies and when their next shipments are months away.

PGH announced this week that an early distribution of 800,000 malaria-fighting, insecticide-treated bed nets to Zambia was made possible by the new partnership. The timing couldn't be better--the peak rainy season is nearing, when malaria rates rise.

"What makes this innovative is we are banking aid contracts, risk-sharing with the private sector, building a guarantee pool designed to increase health impact and procurement efficiency, and doing risk analysis on financing processes that have never been done before," UN Foundation Executive Director Kevin Starace tells Fast Company.

In the case of Zambia, a process that normally takes 32 weeks from donor approval to delivery of supplies was decreased to six weeks. "We bring a third party guarantee (the Bill & Melinda Gates Foundation) to commercial banks, and use letters of credit and other bridging instruments to reduce the time between when aid money is approved and when it gets to a recipient (when procurement can begin)," says Starace.

We've previously noted the particular challenges involved with lag-time in aid distribution. Now it seems the world's leading humanitarian players are catching on.

"We applaud the efforts of countries like Zambia and development partners to create a system that gets health aid to where it’s needed fast and in time to avert emergencies," said Eva Jarawan, Health Manager for the World Bank’s Africa Region. "Innovative financial mechanisms like the Pledge Guarantee can make a real difference in delivering anti-malaria bed nets and other vital health supplies quickly and efficiently to communities which need them the most."

The distribution in Zambia this week coincided with a meeting in Washington, D.C., of international development heavy-weights where the focus was innovation (just as it is in the U.S. right now).

"Innovation is critical if we are to develop and deliver the breakthroughs that can achieve major health outcomes," said Amie Batson, Deputy Assistant Administrator for Global Health at the United States Agency for International Development (USAID), in her keynote address. "Innovative finance, alongside advances in research, clinical practice and social marketing, is crucial in our efforts to reach ambitious global health goals in a resource-constrained world."

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[Image: Flickr user schacon]

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