The International Finance Facility (IFF) is a proposal by HM Treasury in conjunction with the Department for International Development of the United Kingdom. The IFF is designed to frontload aid to help meet the Millennium Development Goals. Bonds would be issued on global capital markets, against the security of government guarantees to maintain future aid flows, which would be used to buy back the bonds over a longer period. This would allow a large amount of aid to flow soon, at the expense of less aid in the future. Critics have raised concerns that the poorest countries in particular don't have the ability to efficiently spend such large amounts of aid (whilst avoiding corruption), and that their economies may not be able to cope with such rapid change either.
The first try of an IFF is the "International Finance Facility for Immunisation" (IFFim), established in 2004 by France, UK and other European countries. The IFFim has a specified schedule of payments totalling approximately US$4 billion over the next 20 years.
The International Finance Facility for Immunisation (IFFIm) was initiated in 2006 to rapidly accelerate the availability and predictability of funds for immunisation. IFFIm sells bonds on the capital markets to raise funds for the GAVI Alliance, a public-private partnership which works to save children’s lives and protect people’s health by increasing access to vaccination in developing countries. IFFIm is currently (as of May 2010) backed by the United Kingdom, France, Italy, Spain, the Netherlands, Sweden, Norway and South Africa. Australia has pledged to join in the near future.
Funds provided by IFFIm from its inception in 2006 to the end of 2008 have helped save more than three million lives by accelerating access to immunisation in developing countries, according to the GAVI Alliance, recipient of the funds. The World Health Organization projects that more than a million additional deaths will be averted as a result of vaccine support given in 2009 and 2010. IFFIm will thus have helped GAVI prevent more than four million premature deaths by the end of 2010.
From November 2006 to April 2010, IFFIm has leveraged actual donations worth US$ 489 million to raise US$ 2.6 billion on the world’s capital markets in seven major offerings to both retail and institutional investors. At Libor -0.05%, IFFIm’s actual average interest cost to date has been 1.6 %.
The United Kingdom, Norway and Australia have pledged almost US$ 900 million to expand IFFIm and enable substantial new investments in health systems through the GAVI Alliance.
The new pledges to IFFIm (the first from Australia) were announced at the United Nations in New York on 23 September 2009 at a meeting co-chaired by UK Prime Minister Gordon Brown and World Bank President Robert Zoellick. The two leaders highlighted the need for stronger, better financed health systems and better access to health services, including immunisation for women and children.
The announcement marked the culmination of 12 months’ work by the Taskforce on Innovative International Financing for Health Systems launched by Brown and Zoellick in 2008.
The additional contributions announced by the UK (£250 million), Norway (NOK 1.5 billion) and Australia (A$ 250 million) followed on from the Netherlands' IFFIm commitment of Euros 80 million announced at the GAVI Board meeting in June 2009. GAVI is working intensively with the World Bank and the Global Fund to Fight AIDS, Tuberculosis and Malaria, with facilitation from the World Health Organization, to develop a common platform for health system strengthening. This Health System Funding Platform will help countries access money more simply and spend it more effectively. It will help remove barriers to immunisation and other life-saving services.