Apr 24, 2006
BACKGROUND INFORMATION ON THE REPLENISHMENT PROCESS AND THE NEED FOR PREDICTABILITY AND SUSTAINABILITY
To date, the Global Fund has received close to US$ 9 billion in pledges from governments, the private sector, private foundations, and individuals. Nearly US$ 5 billion has been committed to over 359 programs in 131 countries. However, it is estimated that approximately US$ 3 billion is necessary in 2006 to fund the Phase 2 renewals of current grants as well as to launch a new round of funding.
The Global Fund’s ability to mobilize resources in a sustainable and predictable manner is of particular importance not only to its beneficiaries in recipient countries, but also to national and international partners and planners both within and outside the health sector.
The Global Fund Replenishment
Background
Since the establishment of the Global Fund to Fight AIDS, Tuberculosis and Malaria in 2002 more than 45 countries, private foundations, corporations and individuals have contributed significant resources to support its work. However, the system of ad hoc contributions makes it difficult to plan the work of the Global Fund and to provide sustained and predictable support for the many programs that are now getting underway in a growing number of countries. At the same time, many current and potential donors expressed a need for a system and a forum through which they could exchange views on the operations and the effectiveness of the Fund when considering their future contributions.
The Board of the Global Fund therefore decided to reform the ad hoc system and to introduce a funding model based on periodic replenishments. The Global Fund believes that a periodic voluntary replenishment will enable the Global Fund to reach out to donors more effectively and to forecast more accurately its available resources for future years.
Purpose and Scope of a Voluntary Replenishment Mechanism
Based on models of existing replenishment mechanisms, the primary purpose of the voluntary replenishment process is to increase the predictability of the Global Fund’s resource mobilization efforts. Greater confidence that the majority of future funding is assured at any given time will have secondary benefits as well. Liquidity management will be more efficient to the extent that the Fund, based on synchronized replenishment pledges, will be able to back its commitments with instruments other than cash and thereby reduce to a minimum idle cash balances. At the same time, the complementary availability of ad hoc resource mobilization channels, especially from non-government donors, will allow the Global Fund to seek further support for additional programs, to tap new constituencies and to respond promptly to unplanned contingencies in between structured replenishment processes.
The replenishment will in addition provide processes through which donors can exchange views on the operations and effectiveness of the Fund as they consider its funding needs.
Organization
The chair of the replenishment process is UN Secretary General Mr Kofi Annan, with the assistance of Mr. Sven Sandström as the vice-chair.
Time frame
The first replenishment cycle aimed to address funding needs for calendar years 2006 and 2007 and additionally looked at the anticipated resource shortfalls for 2005.
Meetings
The first replenishment meeting was hosted in March 2005 by the Swedish government; an interim meeting was hosted by the Italian government in June 2005; and a final meeting for the last cycle of the replenishment was hosted by the government of the United Kingdom in London on 5 - 6 September 2005.
Please click on the link below to return to and answer this week's question:
How can the Global Fund further improve the replenishment process to secure a more predictable and sustainable flow of resources? What are the most appropriate resource mobilization efforts to complement the replenishment process?
Please click here to reply: http://forum.theglobalfund.org/en/viewtopic.php?t=110