Definition: International Finance Facility for Immunisation

Category: ESA 1995

The International Finance Facility for Immunisation (IFFIM) initiative concerns the provision of development aid in the context of a programme of large-scale immunisation against disease in developing countries. It involves the creation of a securitisation vehicle, IFFIM, to securitise part of its expected future income stream, which is mainly expected to be a series of future conditional annual donations by governments.

Starting in 2005, it is expected that IFFIM will raise funds for the rapid scaling-up of immunisation programmes in the world’s poorest countries. Funds will be raised by borrowing against long-term, legally binding donor governments’ conditional commitments. The funds raised will support already existing immunisation programmes of existing non-profit organisations, namely the Global Alliance for Vaccines and Immunisation (GAVI) and the Vaccine Fund (VF). The focus of GAVI is to provide access to vaccination to children in developing countries, while VF is a financing mechanism set to aid the work of the GAVI. IFFIM will be a Special Purpose Vehicle (SPV) for VF. The IFFIM donors are expected to be mainly governments of developed countries. GAVI will evaluate and recommend specific programmes, and VF will approve the programmes recommended by GAVI and determine how it will finance them, including the possibility of using IFFIM funds.

As far as the practical implementation of the initiative is concerned, according to the available information, a number of donors would agree to make conditional annual payments to VF. The payments would be of predetermined expected amounts and timing, but the actual amounts paid would be subject to a condition being met each year, namely that recipient countries would not be in a situation of protracted arrears with the IMF. Once the agreements (known as pledges) have been be made by donor governments, IFFIM would borrow by issuing bonds. The VF will repay the borrowing using a proportion of the promised donations from governments. Donors would enter into legally binding contracts (pledges) with VF. These pledges will have to be honoured as long as GAVI produces enough programmes that require this funding. However, if a recipient country enters protracted arrears, the donors will have to reduce payments to IFFIM by amounts equal to that recipient country’s percentage share of the total programme (either 1%, 3% or 5%). If this happens, bondholders will hold the risk of non-payment. http://ec.europa.eu/eurostat/ramon/coded_files/IFFIM_EN.pdf