Supply Chain
Friday, October 15, 2021
By Jeffrey Kutler
Contributing to public-private partnership efforts to supply billions of COVID-19 vaccine doses worldwide, Citibank has teamed up with the U.S. International Development Finance Corp. (DFC) to provide a risk management solution to Gavi, the Vaccine Alliance.
Gavi - originally the Global Alliance for Vaccines and Immunization when it was seeded by the Bill & Melinda Gates Foundation in 1999 - co-leads the COVAX vaccine development and manufacturing program along with the Coalition for Epidemic Preparedness Innovations (CEPI), World Health Organization (WHO) and UNICEF.
DFC said that in conjunction with Citi, its solution for Gavi would “mitigate risk and overcome financial hurdles with governments that are funding COVID-19 vaccine purchases through the COVAX Facility.” The announcement coincided with a White House-convened COVID-19 summit on September 22 which included, among other actions and updates from President Joe Biden, “commitment of an additional $370 million to support global vaccine readiness and delivery, and . . . more than $380 million in assistance for Gavi, the Vaccine Alliance, to provide political risk insurance to facilitate shipment of vaccines to nine countries across three continents.”
Citi Export & Agency Finance (EAF) was the sole financial adviser in establishing the political risk insurance framework for Gavi. Political risk mitigation is among the benefits touted by EAF, which is headed by Ahmet BekÇe and works with export credit agencies, multilateral agencies and development finance agencies on transaction origination, structuring and financing in sectors such as aviation, shipping, energy and infrastructure.
The Gavi Vaccine Alliance partnership.
Linklaters LLP provided legal counsel to Gavi on the risk management solution.Jay Collins, Citi vice chairman of Banking, Capital Markets and Advisory, said the bank “is honored to work with DFC and Gavi on this very important effort in mobilization against COVID-19. We are delighted with the opportunity to support our partners at DFC and Gavi to help design and implement a risk management solution to create more capacity and enable greater equitable, fair and timely access to COVID-19 vaccines across the globe, particularly by developing countries.”
“Urgent Mission”
Gavi said that DFC is supporting its efforts to pre-purchase up to 2 billion vaccines from manufacturers and allocate them equitably around the world. “DFC's financing will offer protection against political risks in nine self-financing countries - across Latin and Central America, the Middle East, and Eastern Europe - participating in COVAX, covering a total amount of more than $383 million in insurance,” the alliance explained.
“The COVAX Facility's urgent mission is to accelerate the availability of COVID-19 vaccines to the entire world, particularly to countries and regions that struggle to acquire enough doses to protect their populations,” said Dr. Seth Berkley, CEO of Gavi, who founded and formerly headed the International AIDS Vaccine Initiative. The DFC risk solution “will strengthen COVAX's ability to pursue that mission, and we are grateful to DFC, the U.S. government and Citi for that important support,” he added.
Also commenting was DFC chief operating officer David Marchick, a former Carlyle Group managing director: “DFC is proud to partner with Citi and Gavi on this important insurance facility, which builds upon President Biden's leadership to end the pandemic and expands DFC's strategy to boost vaccine manufacturing capacity in Africa and the Indo-Pacific. The insurance transactions announced on the margins of the president's COVID summit will allow for the rapid distribution of COVID-19 vaccines, advancing vaccine equity throughout the world.”
DFC said its financial tools “are driving growth in vaccine manufacturing capacity in multiple regions, with multiple technologies and within large and small countries.” Its partnerships with Aspen in South Africa, IPD in Senegal, and Biological E., Ltd. in India “are projected to facilitate expansion of manufacturing capacity to nearly 2 billion COVID-19 vaccine doses across the globe by the end of 2022, with more projects in the pipeline.”
Pace of Deliveries
Through its Health and Prosperity Initiative, “DFC aims to catalyze $5 billion of investment in support of global health resilience. The initiative includes a call for proposals from private sector entities seeking DFC support for health-related investments in developing countries, including projects that support the global response to COVID-19.”
Indicating the magnitude of logistical and distribution challenges, the COVAX September supply forecast said that 230 million doses had been delivered to 139 participating economies, with a total of 1.4 billion to be available for delivery by year-end and 2.6 billion by the end of March 2022. Despite the “dramatic increase in deliveries,” it said, “this latest forecast reflects a reduction in the number of doses that COVAX expected to receive in 2021.
“COVAX is making strenuous efforts to address and mitigate these risks,” the report continued. “In addition to ongoing dialogue with the government of India [regarding export restrictions], we are calling on donors and manufacturers to: Make supply schedules transparent, so that it is not possible for manufacturers to prioritize bilateral customers over COVAX; give up their place in the queue to COVAX where countries are ahead of COVAX and have enough doses to meet domestic needs; expand, accelerate, and systematize dose donations.”
•Bylaws •Code of Conduct •Privacy Notice •Terms of Use © 2024 Global Association of Risk Professionals