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A Partnership to Prevent and Treat
AIDS, Tuberculosis and Malaria
June 2003
AIDS, tuberculosis and malaria are preventable diseases that can be treated effectively. Yet, they were the cause of six million deaths in 2002. Relative to high-income countries, the burden of these diseases is thirty times greater in developing countries, resulting in tremendous economic loss, social disintegration and political instability. The Fund to Fight AIDS was created in 2002 to respond to this formidable challenge.
What
is the Fund?
The
Fund’s purpose is to attract and disburse additional
resources to prevent and treat AIDS, tuberculosis (TB) and
malaria. As a partnership between governments, civil society,
the private sector and affected communities, the Global
Fund represents a new approach to international health financing.
The Fund works in close collaboration with other bilateral
and multilateral organizations, supporting their work through
substantially increased funding.
The
Fund relies on local ownership and planning to ensure
that new resources are directed to programs on the frontlines
of this global effort. Its results-based approach to grantmaking
– where grant awards are disbursed incrementally,
based on measures of progress – is designed to ensure
that funds are used efficiently to scale up proven interventions.
The
Fund is an independent organization, governed by
an international Board that consists of representatives
of donor and recipient governments, non-governmental organizations
(NGOs), the private sector (including business and philanthropic
foundations) and affected communities. Also participating
in ex-officio capacity are representatives of the World
Health Organization (WHO), UNAIDS, and the World Bank. The
latter also serves as the Fund’s fiduciary
trustee. In January 2003, United States Secretary of Health
and Human Services Tommy Thompson succeeded the Fund’s
first Chair, Dr Chrispus Kiyonga of Uganda. Dr Suwit Wibulpolprasert,
Deputy Permanent Secretary for Thailand’s Ministry
of Public Health, serves as Vice Chair.
The
Fund’s by-laws also call for the formation
of a broad group of stakeholders referred to as the Partnership
Forum. Beginning in 2004, the Partnership Forum will convene
biannually to review progress and provide counsel to the
Fund.
The
staff of the Fund (referred to as the Secretariat)
is based in
, and consists of about seventy
people. The Secretariat aspires to be as lean an operation
as possible: less than 3% of annual commitments is used
for central administration and management of the Global
Fund each year. An additional 2% is used for local oversight
of grants by Local Fund Agents (see box for description
of LFAs). Dr Richard Feachem joined the Fund as Executive
Director in July 2002.
| Key
Fund Structures
Country
Coordinating Mechanisms (CCMs): Country-level
partnerships that develop and submit grant proposals
to the Fund, monitor their implementation,
and coordinate with other donors and domestic programs.
CCMs are intended to be multi-sectoral, involving
broad representation from government agencies, NGOs,
community- and faith-based organizations, private
sector institutions, individuals living with HIV,
TB or malaria, and bilateral and multilateral agencies.
Technical
Review Panel (TRP): An independent panel of
disease-specific and cross-cutting health and development
experts that provides a rigorous review of the technical
merit of applications. The TRP may recommend to the
Board that proposals be funded without condition,
approved conditionally, resubmitted or not approved.
Thus far, the TRP has recommended 40% of the proposals
reviewed for funding.
Principal
Recipient (PR): A local entity nominated by
the CCM and confirmed by the Fund to be legally responsible
for grant proceeds and implementation in a recipient
country. Once the Board approves a proposal, the Secretariat
negotiates a two-year grant agreement in which disbursement
of funds to the PR is based on the achievement of
measurable results. There may be multiple public and/or
private PRs in a country.
Local
Fund Agent (LFA): Independent organizations
hired by the Secretariat to assess the PR’s
capacity to administer funds and provide ongoing oversight
and verification of reported data on financial and
programmatic progress. To date, LFAs include PriceWaterhouseCoopers,
KPMG, United Nations Office for Project Services (UNOPS)
and Crown Agents. A global competitive tender is underway
to select additional LFAs for all of the countries
in which the Fund will operate. |
How does the Fund work?
The
following process used by the Fund to approve and administer
grant awards is designed to maximize the participation of
local stakeholders, ensure accountability and provide transparency
with respect to both decision-making and operations:
- Developing country governments work with civil society
organizations and partners through CCMs to prepare proposals
that fill financing gaps in local HIV, TB and/or malaria
programs.
- Eligible proposals submitted to the Fund are reviewed
for technical merit by the TRP; recommended proposals
are considered by the Fund Board and approved based
on available funds.
- The Fund Secretariat appoints an LFA in countries
with approved grants. The LFA assesses the capacity and
systems of the PR that has been nominated by the CCM.
- The Secretariat negotiates a two-year grant agreement
with the PR, after which the PR receives its first disbursement.
The PR in turn makes disbursements to local implementing
organizations.
- The PR periodically requests additional disbursements
from the Secretariat, based on evidence of progress achieved,
verified by the LFA.
- Based on verified disbursement requests, the Secretariat
instructs the World Bank (as trustee) to make disbursements
throughout the two-year period. The flow of funds is linked
to continued progress.
- Two-year program performance is evaluated by the Global
Fund to determine whether to renew grants through to their
full term (typically 5 years).
What is the Fund’s track record?
In two
rounds, the Fund has approved grants to 93 countries,
including those with the greatest present disease burden
and those at risk of future disaster (two more countries
benefit from a multi-country proposal). Two years of initial
financing totaling US $1.5 billion has been committed to
over 150 programs. Sixty percent of this total is for Africa;
60% is for AIDS. Half of the money will be used by governments;
half by NGOs. Half is for the purchase of drugs and commodities,
and half is for infrastructure and training.
In its first year, the Secretariat designed and implemented
the Fund’s new results-based system of grantmaking
to help ensure the most effective use of donor funds. With
this infrastructure now in place, the process of negotiating
and signing grant agreements is well under way and the rate
of signed agreements and disbursements is expected to increase
dramatically. As of June 13, 2003, progress on Rounds 1
and 2 includes signed agreements with over 50 of the 93
countries with approved proposals, valued at roughly US$
600 million. Disbursements – including initial outflows
and the first and second disbursements – have been
made to 28 countries, totaling nearly US $38 million. It
is expected that disbursements will total US$ 100 million
by October. Round 3 approvals, scheduled to occur in October
at a Board Meeting in Thailand, will be based on availability
of funds and the technical review of over 200 proposals
from 85 countries.
What difference will the Fund make in people’s lives?
With Fund resources, local programs approved
in Rounds 1 and 2 will support an unprecedented scale-up
of HIV treatment. Over five years, an estimated 500,000
people will begin receiving antiretroviral treatment,
representing a tripling of current coverage in poor
countries (including over a six-fold increase in Africa).
An expected 500,000 children orphaned by AIDS will receive
support and an estimated two million people with infectious
TB will be treated successfully using DOTS. Over this
same period, the Fund will help to quadruple the coverage
of treatment of multi-drug resistant TB and finance
20 million combination drug treatments for resistant
malaria and 30 million insecticide-treated bed nets
to prevent malaria.
|
Examples of approved programs include a voucher program
in Tanzania where pregnant women can shop among village
vendors for locally-produced malaria bed nets; a TB
grant to Sierra Leone to rebuild 24 (70%) of the country’s
DOTS clinics, which were destroyed during its civil
war; a prevention effort in India, which will expand
mother to child transmission (MTCT) prevention programs,
voluntary counseling and testing, and treatment for
sexually transmitted infections from 125 to 450 health
care centers. Moreover, India will have trained more
than two thousand health care workers.
|
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How Haiti is Currently Using
Fund Resources
A grant awarded to NGOs in Haiti is enabling that country to
strengthen local public health infrastructure and dramatically scale up
efforts to prevent and treat HIV and TB. Since August 2002, the
program has reopened a public health clinic and operating room,
stocked five public clinics with essential drugs, and provided basic
laboratory services in four clinics. More than 600 individuals have
begun antiretroviral treatment, and over 300 new TB cases have
been detected. The recipient NGO also has expanded school-based
prevention, access to voluntary testing and counseling and prenatal
screening, and MTCT prevention five-fold. With systems now in
place, the program is expected to receive additional disbursements to
expand activities rapidly. |
Ghana will use a grant to build 16 voluntary testing
and counseling centers, provide MTCT prevention services
to 600 mothers per year, and begin antiretroviral therapy
for 2,000 people with AIDS. The country’s grant
will allow Ghana to treat an additional 20,000 patients
using DOTS over the next two years. A quarter of these
patients will be treated in private health clinics in
order to strengthen the capacity of the private sector
to work with the public sector to fight TB.
|
How is the Fund accountable?
The Board and Secretariat have incorporated a number of
accountability mechanisms into the Fund’s grant
review, awards and disbursement processes. The first level
of responsibility lies with local CCMs, which should include
in their proposals to the Fund plans for independent
audits of program financial statements. In addition, prior
to the signing of an agreement, the LFA certifies the fiscal
and administrative capacity of the PR. Through a grant agreement
with the Fund, PRs are accountable for the use of
grant funds and program results. Throughout the grant period,
periodic disbursements of funds are linked to progress identified
in programmatic and financial updates submitted by the PR.
The LFA provides an independent verification of these updates.
As the governance body at the country level, the CCM oversees
and monitors progress during implementation.
The
Fund has adopted other decisions to ensure fiscal
prudence and the efficient use of funds. For example, grant
awards are made only on the basis of confirmed donor pledges,
and signed agreements must be based on funds actually received.
The Fund has also adopted an innovative drug procurement
policy, which ensures that recipients secure the lowest
available price for quality pharmaceuticals.
Finally,
one of the Fund’s key operating principles
is transparency. This is perhaps best illustrated by the
broad content of its website. Approved proposals, signed
grant agreements and recipient disbursement requests for
Rounds 1 and 2 are available for review, as are documents
discussed at Board meetings and information about the Fund’s
structure and governance. In the future, the Fund also intends
to make available grantee progress updates as well as more
detailed information on CCMs.
Who are the Fund’s partners?
The
Fund represents one important part of a comprehensive
global response to AIDS, TB and malaria. Multilateral development
partners and bilateral agencies provide complementary support
to countries, including technical assistance for monitoring
& evaluation; support for capacity building, including
human resources as well as product procurement and supply
chain management; dissemination of best practices; and financial
assistance. Local planning by CCMs is designed to coordinate
new activities with those that already exist to ensure that
Fund efforts are additive. As a financing mechanism,
the Global works closely with key international allies,
such as UNAIDS, the World Health Organization (WHO) and
the World Bank, and major partnerships, including Stop TB
and Roll Back Malaria.
The
participation of NGOs and the private sector are key pieces
of the Fund’s operations – on the Board
and TRP and in CCMs and the Secretariat. NGOs offer constructive
scrutiny of the Fund’s activities and ensure
real engagement with civil society. Private sector partners
and foundations provide both direct funding and in-kind
assistance to the Fund. In addition, the Fund is working
with businesses to encourage individual contributions from
employees and customers and to co-finance the expansion
of workplace programs into communities.
What are the Fund’s current resource needs?
To help
establish and sustain the Fund, international donors
– including 39 countries, major foundations and private
donors – have pledged significant new resources to
the fight against the three diseases. Between 2002 and 2004,
contributions to the Fund total US$ 2.6 billion, with an
additional US$ 2.0 billion pledged for 2005 to 2008 or for
an unspecified period. While significant, pledges through
2004 are not enough to finance Rounds 3, 4 and 5, which
are scheduled to occur between October 2003 and October
2004. Given an expected increase in the number of applications
in future rounds, as well as an anticipated approval rate
of 50%, the projected needs of the Fund are US$ 3.0 billion
by the end of 2004. With approximately US$ 700 million in
pledges confirmed for 2004, the near-term resource shortfall
is US$ 2.3 billion. In 2005, the expected need is USD 4.5
billion based on a sixth and seventh round of new proposals
and the renewal of programs approved in Rounds 1 and 2.
Confirmed pledges for 2005 currently total just over US$
600 million. The Fund will revise these estimates as necessary
based on proposals received.
The
magnitude of this outstanding need means that the majority
of funds must be raised from the public sector, including
funding from new donors and additional contributions from
developed countries that have pledged previously. However,
businesses and private foundations also have important roles
to play in the Fund, both as donors and partners.
In addition, increased local financing and leadership among
developing countries must be commensurate with new global
financing. As a global responsibility, the Fund requires
unprecedented commitments from all stakeholders.
Prepared
June 13, 2003.
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