WASHINGTON, May 11, 2017 – The World Bank Board of Executive Directors today endorsed the use of US$50 million in regional financing from the International Development Association (IDA) to fund the Pandemic Emergency Financing Facility (PEF).
The PEF breaks new ground by providing the first-ever insurance for pandemic risk to developing countries, offering coverage to all countries eligible for financing under IDA, the World Bank’s fund for the poorest. Eligible countries will be able to receive timely, predictable, coordinated and scaled-up disbursements of funds if affected by an outbreak that meets PEF’s activation criteria. Not only will the PEF save lives and costs by preventing the escalation of crises, it will also preserve hard-won development gains and help create a new market for pandemic risk insurance.
The PEF pilot will operate for three years, offering up to US$500 million in coverage funded through the financial markets (“insurance window”) and up to US$50 million and possibly more through a complementary cash window. Through its insurance window, the PEF will provide coverage for outbreaks caused by a set of known infectious diseases most likely to cause a major pandemic. Its cash window will provide coverage for a larger set of new and emerging pathogens not currently covered by the insurance window. With 1.6 billion people living in the 77 poorest countries of the world, the PEF offers exceptional value for money, protecting the most vulnerable population against pandemic risk for less than 3 cents per person per year, on average.
The PEF was launched in May 2016, backed by financial support from Japan and Germany totaling US$50 million and US$78 million (equivalent), respectively.
IDA countries have also expressed strong support, urging the World Bank Group to make the PEF operational as quickly as possible.
“As Minister of Health of Liberia during the Ebola outbreak, I learned very clearly that when a resource-constrained country gets hit with an outbreak that is escalating, the country cannot fight it alone,” said Liberian Health Minister Bernice Dahn. ”Our systems get overwhelmed and often break down, and we need to urgently scale up our response efforts early in the crisis. The last thing that we should have been investing our energy on was drafting lengthy proposals to multiple donors: that precious time and energy should have been spent containing the pandemic and focusing on the thousands of our people who were sick and dying.”
Dahn added: “The Pandemic Emergency Financing Facility is a much needed instrument that the world has been lacking. Having a predictable financing mechanism to help scale up the response to large outbreaks would make us better prepared as a country and as a global community for the next pandemic, and there are very real human and economic consequences if we fail to do so. I welcome it and urge timely action to make the PEF operational as quickly as possible.”
The PEF is an integral part of the pandemic risk management architecture being set up globally over the last three years. To receive PEF funding, countries need to have a pandemic response plan in place.
Today’s endorsement by the Board provides the necessary financing to allow the PEF to be operationalized within the next few months.