The vast majority of international development programs are financed by public or intergovernmental funds. Aware of the limitations of public funding in the field of development, some international organizations, NGOs and foundations based in Geneva have developed innovative financial mechanisms to increase the impact of their actions. The issue here is the same as for Impact Investing: how can the private capital that is available on financial markets be directed towards actions that have strong social impacts ?
The Global Alliance for Vaccines and Immunization (GAVI) is based in Geneva and operates as a public-private partnership ; it focuses its action on immunization. Since its creation, GAVI has been a pioneer in new models of financing development that have enabled, for example, the expansion of childhood immunization in poor countries. In 2006, it launched “vaccination bonds” on financial markets. Dubbed “ International Finance Facility for Immunization ” (IFFIm), this instrument enables the conversion of long-term government bonds into immediately available financial resources, via the issue of bonds to private and institutional investors. Thanks to its strong financial base, IFFIm has been rated AAA by FitchRatings.
GAVI’s IFFIm has raised more than $6.3 billion from a dozen sovereign donors. These mechanisms have enabled GAVI to double its investments in developing countries and are considered a major financial step forward in this area. In 2011, the consulting firm HLSP, which is dedicated to the health sector, confirmed in its report that the funds raised by IFFIm generate not only “ extremely positive financial returns ” but also have a significant impact on health.
Also in the area of health, GAIN (Global Alliance for Improved Nutrition) launched a new financial instrument last year from its headquarters in Geneva, called “Access to Nutrition Index ” (ATNI). This index provides a multi-criteria evaluation of the top 25 global food companies to encourage investment in those that promote better access to nutrition. GAIN considers that nutrition is key to major public health problems. Taken together, the issues of obesity, poor and malnutrition affect about 2.3 billion people (one third of the world’s population) and have a significant economic and public health impact.