Allocation and Catalytic Investment Access to Funding
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1 Allocation and Catalytic Investment Access to Funding
2 Contents 1 2 Allocation Methodology Catalytic Investments 1 1
3 Overview Global Fund has adopted a refined allocation methodology to Deliver the aims of Strategy: Investing to End Epidemics Increase impact of programs to prevent, treat and care for people affected by HIV, TB and malaria, and build resilient and sustainable systems for health The refined methodology does this by Driving increased proportion of funding to higher burden, lower income countries Specifically accounting for epidemics among key and vulnerable populations, the threat of MDR-TB, and for malaria elimination efforts Providing sustainable and paced reductions where funding is decreasing 2
4 Refinements guided by Key Lessons Learned from Adopting allocation-based funding model enabled Global Fund to actively shape portfolio and align funding to achieve impact in line with Global Partner plans Lessons learned indicated scope for refinement to improve impact: Limited ability to scale-up in higher burden, lower income countries Country Bands limited flexibility to address critical funding shortfalls Needs of key & vulnerable populations, threat of MDR-TB and malaria elimination insufficiently addressed Incentive funding used to fill gaps rather than catalyze toward strategic aims Multiple multi-country approaches, not always focused on key global regional barriers to ending epidemics 3
5 Calculation of Country Allocations Maximizes impact in line with disease burden & country economic capacity All but $800m for robust & predictable allocations Scale-up for high burden, below-formula components Movement of limited funds & flexibility to balance paced-reductions Increased emphasis on MDR in TB allocations, as recommended by Technical Partners Allocation Formula Disease Burden x Country Economic Capacity Initial Calculated Amount $800m moved for scale-up, impact, paced reductions Formuladerived Allocation Max/ min shares, external financing adjustments 4
6 Qualitative adjustment process Aims Refine allocations for epidemiological contexts not addressed through formula Account for country-specific contextual considerations to maximize the impact of Global Fund resources in line with the Strategy Two-stage Process Stage 1: Refining for epidemiological contexts Populations disproportionally affected by HIV Low Endemicity Malaria TB adjustment to be pursued for next allocation period (does not change global disease split) Stage 2: Single, holistic adjustment Potential for impact & potential absorption Supported by contextual considerations incl. coverage gaps, risk, domestic/ external financing trends, program efficiencies, buying power, cost of continuing essential programming Transparent and accountable process, carried out under Strategy Committee oversight
7 Composite disease burden Size of the bubble represents relative size of allocation Outcomes of Allocation Methodology % Global Fund Board approved $11.1bn for allocation : $10.3bn for country allocations & $800m for catalytic investments 14% 12% 10% 8% 6% 4% 2% 0% LI L-LMI U-LMI UMI 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 11,000 12,000 13,000 GNIpc (2015) Refined methodology drives increased funding to higher burden, lower income countries 6
8 Balancing increases and paced reductions through portfolio Refined methodology balances scale up and paced reductions Increases in many countries with higher burden, lower economic capacity on average 15% higher than current and projected spend levels (1-114% across portfolio) Balanced with sustainable paced reductions to many countries with lower burden, higher economic capacity, on average 86% of current and projected spend (50-99% across portfolio, where allocations > $10m) Global Fund s new Sustainability, Transition and Co-financing and Challenging Operating Environment support program sustainability, transition and flexibilities in crises 7
9 Distribution of Allocations Disease Burden HIV TB Malaria $800 $800 $ % 2.1% 2.0% 1.0% 0.2% 0.4% 0.4% 7.6% 7.9% 5.0% 11.5% 12.8% 17.9% 9.6% 36.7% 21.4% 48.3% 29.3% 34.8% 29.1% 36.5% 73.3% 73.0% 19.4% Disbursements 24.3% Spend (Incl. Incentive Funding) Allocation 3.5% 5.6% Disbursements Spend (Incl. Incentive Funding) Allocation 35.8% Disbursements 47.7% Spend (Incl. Incentive Funding) Extreme Severe High Moderate Low Catalytic Investments Allocation Increased funding to extreme and severe disease burden countries 8
10 Distribution of Allocations Income & Regions Income (2015) 10.2% 8.1% 45.4% 42.5% Region $800 $ % 10.2% 6.4% 3.9% 3.6% 4.9% 9.8% 11.6% 6.4% 6.4% 26.1% 27.3% 44.4% 49.3% 16.5% 21.1% 17.2% 17.7% Spend Allocation Spend Allocation Disbursements (Incl. Incentive Disbursements (Incl. Incentive Funding) SSA: West & Central Africa Funding) SSA: Southern Africa LI LMI UMI Catalytic Investments SSA: East Africa SS: Middle East & the North Africa South Asia Latin America & the Caribbean Eastern Europe & Central Asia East Asia & the Pacific Catalytic Investments Increased funding to low income countries, and sub-saharan Africa, among others 9
11 Increases to priority countries aligned with Strategy aims Adolescent Girls and Young Women SSA Priority Countries MDR-TB Priority Countries Top 15 Malaria Burden Countries AGYW catalytic investments TB catalytic investments Applicable malaria catalytic investments $55m $190m $189m + $89 million + $54 million +$41 million + $879 million + $375 million +$621 million Disbursements Spend (incl. Incentive Funding) Allocation Disbursements Spend (incl. Incentive Funding) Allocation Disbursements Spend (incl. Incentive Funding) Allocation HIV/AIDS Allocations TB Allocations Malaria Allocations Catalytic Investments Applicable malaria catalytic investments are Elimination in Southern Africa, the Greater Mekong Sub-region, Catalyzing Market Entry of new LLINs and Piloting the Introduction of the RTS,S Vaccine (GF/B36/DP06). 10 NB. Uses 2017 eligibility so does not reflect funding for countries previously eligible in
12 Impact of Refined Allocation Methodology Increased funding above current spend in: Sub-Saharan Africa Highest burden/lower income countries; AGYW epidemics, MDR-TB and top 15 high burden malaria countries; Balances scale-up with sustainable paced reductions Accounts for epidemics among key & vulnerable populations, threat of MRD-TB, and malaria elimination efforts Global Partner Plan Impact Targets 86% - 100% 62% - 80% Lives saved Incidence reduction Together with domestic resources & other external financers, with allocation methodology positioned to achieve aims of Strategy & Global Partner Plans
13 Contents 1 2 Allocation Methodology Catalytic Investments 12 12
14 Aims of Catalytic Investments In order to achieve the aims of the GF Strategy Global Fund Board recommended that USD 800m be retained for catalytic investments to: Incentivize use of country allocations for strategic priorities in line with the Global Fund and partner disease strategies, including for key and vulnerable populations, gender-based programs and contributing to resilient and sustainable systems for health: 1. Matching funds to incentivize programming of country allocations for strategic priorities 2. Multi-country approaches 3. Strategic initiatives 13
15 What are the objectives of modalities for catalytic investments? A portion of overall resources retained for programs, activities, and strategic investments that are unable to be addressed through country allocations alone, yet deemed crucial to ensure Global Fund investments are positioned to deliver against its strategic aims. 1 Matching Funds: to incentivizing the use of country allocations for strategic priorities in line with the Global Fund and partner disease strategies, including for key and vulnerable populations, genderbased programs and contributing to resilient and sustainable systems for health. Purposes of catalytic investments 2 Multi-country approaches: to target key, strategic multi-country priorities deemed as critical to meet the aims of the Strategy and in line with global disease priorities. 3 Strategic initiatives: to continue the funding for critical approaches deemed necessary for the success of country allocations in line with the objectives of the Strategy, but not able to be funded through allocations due to their cross-cutting, innovative or off-allocation cycle nature. 14
16 Overview of Board-approved Catalytic Investments HIV TB Malaria RSSH Broader Strategic $200m $190m $202m $166m $42m Key Populations; Human Rights; Adolescent Girls & Young Women Finding missing TB cases Malaria Elimination, Drug and LLIN Resistance, Piloting first Malaria Vaccine Program Sustainability, Service Delivery & Health Workforce; Supply Chain Strengthening; Data Systems & Use for Program Quality; Community Rights & Gender Prospective Country Evaluations; Emergency Fund Illustrative Modality Total Funding (US$ m) % of Funding Matching Funds % Multi-County Proposals % Strategic Initiatives % Total 800 ~ 80% directly to country programs
17 1. Matching Funds (1/2) Approach to catalyse delivery against priority Matching funds to reward programming of country allocations in line with catalytic priority Catalytic priorities and associated costs to be pre-defined by Strategy Committee, to ensure countries know upfront whether catalytic funding is applicable to them Secretariat to map specific disease programs and identify applicable countries based on epi contexts Funds for catalytic priority will be divided between applicable country components in proportion to their underlying allocation amounts Provides an amount notionally available to each applicable country component Information to applicants Eligibility for pre-determined investments communicated as part of allocation letters Secretariat to ensure: Timely dissemination of information on catalytic priorities, principles and purpose Interventions likely to be considered catalytic known by applicant prior to application Application process is clearly and consistently communicated to all country stakeholders Relevant preconditions for leveraging funding commitments from countries are highlighted Funding request Funds requested through prioritized and costed above allocation request with programmatic elements covering more than the amount available for matching funds Requirement that country allocation also be programmed towards catalytic priority 16
18 1. Matching Funds (2/2) Review and approval TRP reviews request for technical soundness, strategic focus and potential for impact TRP to evaluate whether the allocation amount has been appropriately programmed towards the catalytic priority before recommending funding for a country component Funds awarded by the GAC, conditional upon assessment of whether approach is considered catalytic, impactful, and whether can instead be funded through efficiencies in grant making Where funds remain unawarded by country, reassigned to other countries within catalytic priority Additional considerations for award of funds Requirement for country to demonstrate sustained domestic financing and political commitments, as appropriate TRP to develop process and methodology for reviewing and prioritizing above allocation requests including catalytic priorities GAC to further articulate conditions around matching funds for different countries, taking into account allocation amounts, strategic portfolio considerations as relevant, country contexts, absorptive capacity and performance, among others * Actual priorities determined by Strategy Committee in consultation with Technical Partners, Communities and Civil Society. 1 GF/B36/DPxx 17
19 Process steps to operationalize catalytic investments - matching funds Step 1: Consultation Step 2: GAC Review & Decision Determine applicable countries for each matching funds catalytic priorities Principles and rationale for the proposed countries Check-in with partners for feedback on proposed countries High level matching requirements GAC deliberations and steer on priority countries for catalytic matching funds, and matching requirements Allocate funds for matching to each applicable countries Principles and approach to allocating matching funds Matching requirements and additional considerations, if any GAC final recommendations on Matching Funds, and Matching Requirements Step 3: Communication Communication to applicants, Allocation letters to include: Matching funds catalytic priority(ies) for which the applicant is eligible Matching requirements to be met by the country; and approach to accessing matching funds Step 4: Application & Review Application and Review - for Matching Funds: Submit application through prioritized above allocation request TRP and GAC Review: Evidence that country allocation has also been programmed towards catalytic priority 18
20 Range of factors and data points considered identifying applicable countries (epi context) and allocating matching funds Focus on Impact, Think Big, Think Bold Potential for Impact Potential for impact of investing in catalytic priority based on incentivizing use and what can be achieved through country allocations Based on initial amounts proportionate to allocation Allocation + Adjustments based on catalytic / strategic burden, minimum/maximum grant size, etc. Absorptive capacity Any other considerations put forth by Functional Teams, Regional Managers / Department Heads and the GAC Feasibility (a) Feasibility of utilizing funds additional to country allocations; (b) If catalytic priority can be achieved with efficiencies; (c) country capacity.
21 What is matching? Current discussion with GAC Overall purpose To incentivize the programming and use of country allocations and drive impact in strategic priorities critical to achieving the Global Fund Strategy To meet the conditions for matching funds, an applicant must show: An increase in the allocation amount designated to the relevant catalytic investment priority, compared to the budget levels in Global Fund grants from the allocation period. This amount should at minimum be a 1:1 match for the amount of available matching funds A corresponding increase in programmatic targets and coverage anticipated through both the increased use of country allocations and use of matching funds towards the relevant catalytic investment priority Flexibilities and exceptions are applied as appropriate based on TRP and GAC review on a case by case basis (e.g. for heavily commoditized grants) 20
22 What is matching? Example scenarios Example 1 Situation: A country is eligible for 2,000,000 in key populations (KP) matching funds. In the last funding cycle they invested 500,000 in KP programming. Conditions for matching funds: Increase investment from 500,000 to a minimum of 2,000,000 of their allocation in KP programming; and Corresponding increase in their programmatic targets in line with the total 4,000,000 in available funding (total = allocation investment + matching funds). Example 2 Situation: A country is eligible for 2,000,000 in KP matching funds. The grants are heavily commoditized and there is no fiscal space in the allocation to increase funding to KP, but the country has good existing KP programming that is funded by domestic or other sources. If countries are not able to increase funding within allocation: Flexibility will be applied to reduce the risk of displacing funding away from essential programs. The TRP will review country s proposal indicating how the matching funds would catalyze appropriate ambitious plans and interventions even if not directly funded by GF grants. Example 3 Situation: A country is eligible for 2,000,000 in KP matching funds. In the last funding cycle they did not invest in key KP. Conditions for matching funds: Invest 2,000,000 of their allocation in KP programming If countries do not prioritize the designated area of investment/ are not able to meet the condition: The designated amount goes back into the matching funds pot for reinvestment in the portfolio of preselected countries for that priority area. 21
23 Risk Analysis Risks that may potentially undermine matching objectives Potential Risks a) Moving funding from essential programs to meet matching requirements, e.g. for highly commoditized grants with fiscal constraints b) Drawing funds away from other disease programs during program split discussions to meet matching requirements c) Using matching funds to backfill gaps, e.g. in programs with paced reductions d) Applicable countries do not apply for catalytic matching funds due to complexity of processes Mitigation Measures a) Budget analysis to understand current spending levels in catalytic priorities, proportionate allocation investments in commodities, etc. b) Apply flexibilities and exceptions in implementation of matching funds as appropriate c) Monitor outcomes of Program Split to mitigate inappropriate reallocation to matching priorities d) Simplify application process for accessing matching funds 22
24 Sources of funding for Prioritized Above Allocation Request (PAAR) All applicants are encouraged to submit an ambitious, evidence-based, costed PAAR National Strategic Plan Allocation Prioritized Above Allocation Request Global Fund sources: Catalytic Matching Funds For components eligible for catalytic priority areas Amount awarded may be less than funds requested/available Efficiencies Portfolio Optimization UQD External sources: Private Sector Debt2Health 23
25 As per GAC discussion Catalytic Request (5.2) within prioritized above allocation request Prioritized above allocation request (PAAR): All applicants are encouraged to submit an ambitious PAAR for maximum impact. (5.1) Applicable countries for matching funds: Submit a Catalytic Request (5.2) TRP review: Technically sound interventions will be registered as UQD period: Opportunities to update PAAR and register UQD during grant-making and grant implementation Framework for prioritization of items for portfolio optimization will be discussed and approved by the Strategy Committee in Q Catalytic Request/ PAAR Country components (under program continuation) can submit their catalytic request for TRP review during grantmaking or implementation. PROS - Allows flexibilities for countries to submit Catalytic Requests when ready to maximize impact - Fits with streamlined approach to program continuation (20 March submission for Window 1 TRP) - Does not disadvantage components under program continuation and allows time to align with programming of allocation during grant-making or implementation - Enables more rapid operationalization of Board DP on Catalytic Investments, while not delaying accessing allocation for all components Limitations - Entails a 2-stage process with funding request and catalytic request/ PAAR submitted for TRP review in 2 different stages - May cause delays to realizing investments in catalytic 24 priorities if countries do not access in time
26 2. Multi-country approaches (1/3) Approach to catalyse delivery against priority Multi-country priorities to be pre-shaped or RFP to meet catalytic priorities: 1. HIV - Key populations sustainability and continuity US$ 50 M 2. TB - multi-country responses US$ 65 M 3. Malaria: Southern Africa, Mesoamerica, Greater Mekong US$ 145 M 4. RSSH - PSM Strengthening: developing local resources for countries US$ 12 M Pre-shaped existing programs within the scope of a catalytic investment priority that should be continued or refocused. 3 operational categories Pre-shaped new multi-country programs within the scope of a catalytic investment priority and where no existing program can be continued. Limited Call for Proposals within the scope of a catalytic priority, where requirements do not sufficiently position approach to be proactively shaped. 25
27 2. Multi-country approaches (2/3) Way forward: existing programs Secretariat to define criteria to inform the process of determining which existing multicountry programs are continued, refocused or discontinued; as well as which new multicountry grants are identified for pre-shaping Criteria will build on TERG recommendations and TRP lessons from the review of existing regional programs during the allocation period, in consultation with GMD, CRG and other relevant Departments, TRP and Partners. Secretariat to conduct a rapid assessment of existing multi-country portfolio based on defined criteria and present a recommendation for EGMC/GAC approval Communication to all existing multi-country programs, on outcome of the review and selection process Responsible transition for existing multi-country approaches not to be continued Way forward: new grants Secretariat to develop guidance for new pre-shaped multi-country proposals and Limited Call for Proposals that will include: application process, regional dialogue, grant making, implementation and grant closure.. 26
28 3. Strategic initiatives Operational considerations Secretariat to conduct robust process to determine the final recipients of strategic initiative funding, consulting with partners where appropriate Where relevant, Secretariat to ensure strong coordination of specific activities with those being undertaken by other partners and donors to ensure they are complementary and build on each other Each strategic initiative managed by team within the Secretariat, while work may be undertaken either by the Secretariat or selected partner organizations Where relevant, oversight undertaken within advisory or other external governance structures Approach to award Funds centrally managed by secretariat, subcontracting to other providers, as appropriate Award of funds overseen by Secretariat s Executive Grant Management Committee Prospective evaluations to be planned for each initiative, for evaluation of impact and to inform future approaches Rationale for optimal approach Contracts need to be centrally managed for purposes of efficiency, practicality and to ensure oversight, given their cross-cutting or off-allocation cycle nature Overall management approach worked as envisioned for allocation * Actual priorities determined by Strategy Committee in consultation with Technical Partners, Communities and Civil Society. 27
29 Priority Illustrative Modality Associated Cost ($m) Aggregate Total ($m) HIV Key Populations Sustainability and Continuity Multi-Country Key Populations Impact Matching Funds Human Rights Matching Funds Adolescent Girls and Young Women Matching Funds 55 TB Incentivising Programming of Allocations to find missing TB Cases Matching Funds Addressing Specific Barriers to Finding Missing TB cases, Especially in Key Populations and Vulnerable Groups Strategic Initiative Development of Community and Innovative Approaches to Accelerate Case Finding Strategic Initiative TB Multi-country Responses Multi-Country 65 Malaria Malaria Elimination: Cross-cutting Support in 21 Low Burden Countries Strategic Initiative Malaria Elimination: Southern Africa Multi-Country Malaria Elimination: Mesoamerica Multi-Country 6 2. Greater Mekong Sub-region Multi-Country Catalysing Market Entry of New LLINs Matching Funds 33 Strategic Initiative 2 4. Piloting Introduction of the RTS,S Malaria Vaccine Strategic Initiative 15 RSSH 166 Sustainability, Service Delivery and Health Workforce 1.1. Sustainability, Transition and Efficiency Strategic Initiative Integration of Service Delivery & Health Workforce Improvements Matching Funds Technical Support, South-to-South Collaboration, Peer Review and Learning Strategic Initiative 14 Data 1. Data - Data systems, data generation and use for programmatic action and quality improvement Matching Funds 40 Strategic Initiative Data - National Strategic Planning for Data Systems 1.2. Data - District Data Systems for Quality Improvement 1.3. Data - Disaggregated Data Generation, Analysis and Use 1.4. Data - Impact and Epidemiological Measurement, Reviews and Evaluations PSM 1.1 PSM - Diagnosis and Planning Strategic Initiative PSM - Innovation Challenge Fund Strategic Initiative PSM - Developing Local Resources Multi-Country PSM - Pre-qualification of Medicines and IVDs Strategic Initiative 12 CRG Strategic Initiative 15 Broader Strategic Areas 4228 Evaluations
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