World Bank Group introducing financing facility to protect poorest countries against pandemics
The World Bank Group has launched the Pandemic Emergency Financing Facility (PEF), an innovative, fast-disbursing global financing mechanism designed to protect the world against deadly pandemics.
This creates the first-ever insurance market for pandemic risk. Japan, which holds the G7 presidency, committed the first US$50 million in funding towards the new initiative.
"Pandemics pose some of the biggest threats in the world to people's lives and to economies, and for the first time we will have a system that can move funding and teams of experts to the sites of outbreaks before they spin out of control," said Jim Yong Kim, president of the World Bank Group.
"This facility addresses a long, collective failure in dealing with pandemics. The Ebola crisis in Guinea, Liberia and Sierra Leone taught all of us that we must be much more vigilant to outbreaks and respond immediately to save lives, and also to protect economic growth."
The announcement came a week ahead of the May 26-27 Summit of Group of Seven Leaders in Ise-Shima, Japan. G7 leaders had urged the World Bank Group to develop the initiative during their May 2015 summit in Schloss-Elmau, Germany.
"Japan is proud to support the Pandemic Emergency Financing Facility, which prevents pandemics from undermining important development achievements," said Deputy Prime Minister and Minister of Finance of Japan Taro Aso.
The new facility will accelerate both global and national responses to future outbreaks with pandemic potential. It was built and designed in collaboration with the World Health Organisation and the private sector, introducing a new level of rigour into both the financing and the response.
"Recent years have seen a dramatic resurgence of the threat from emerging and re-emerging infectious diseases," said Margaret Chan, director general of the World Health Organisation (WHO).
"(The) WHO fully supports the Pandemic Emergency Financing Facility as a critical contribution to global health security and a crucial line of defence against high-threat pathogens."
The PEF includes an insurance window, which combines funding from the reinsurance markets with the proceeds of World Bank-issued pandemic (catastrophe, or Cat) bonds, as well as a complementary cash window. This will be the first time World Bank Cat Bonds have been used to combat infectious diseases.