Unleashing the Potential of the Private Sector for the Pandemic Fund

Background & Objectives

Given the urgent need to step up investments to strengthen the capacity of developing countries to prevent, prepare for, and respond to future global health threats, and with broad support from the G20 and beyond, the World Bank Board of Directors approved the establishment of a Financial Intermediary Fund (FIF) for Pandemic Prevention, Preparedness, and Response (PPR) (‘the Pandemic Fund’) on June 30, 2022. 

The Pandemic Fund aims to help low and middle-income countries strengthen PPR and fill existing capacity gaps at country level, as well as at regional and global levels. The fund is expected to bring additional, long-term, dedicated resources for PPR, incentivize countries to increase investments in PPR, and enhance coordination among partners. 

As the design, function, and priorities of the Pandemic Fund are formalized, the perspectives, voice, and expertise of the private sector will be critical to ensure that investments made through the fund maximize the unique capabilities of the private sector. 

The Chamber commissioned this paper to work with private sector enterprises involved in PPR to better understand their perspectives on the private sector’s roles in PPR and how the Pandemic Fund can be designed in a way that optimizes their participation and contribution. Specifically, the paper sets out to: 

• Assess the structure, governance, and operation of the Pandemic Fund to identify opportunities for private sector engagement and participation. 
• Solicit private sector perspectives on the Pandemic Fund, including how the private sector might best be engaged to support the delivery of PPR. 
• Provide specific recommendations to the Governing Board and Secretariat of the Pandemic Fund on how the capabilities and experiences of the private sector might best be engaged by Pandemic Fund investments. 

Recommendations

We propose seven recommendations for the Governing Board and Secretariat of the Pandemic Fund, organized across the three themes of governance, funding priorities, and financing mechanisms. In making these recommendations, we acknowledge the World Bank FIF Management Framework⁴ and Governance Framework for the FIF for PPR³, which give the Governing Board a high degree of autonomy in how the fund operates in support of its objectives, and call attention to the White Paper for a FIF for PPR which supports evolution in FIF governance and operations: ‘Once established, FIFs naturally evolve in response to new opportunities, lessons learned and other changes in the environment.’⁵ 

GOVERNANCE 

To ensure that the private sector can be the best possible partner in delivering on the potential of Pandemic Fund investments, we recommend that the Governing Board and Secretariat: 

Recommendation 1: Allocate seats for private sector representation on the fund’s Technical Advisory Panel (TAP).  

Private sector representation on the fund’s TAP would provide the Governing Board with ready access to private sector expertise and perspectives. Such representation would be in line with the proposals made in the White Paper for a FIF for PPR and would align fund governance with the practices of similar multilateral financing mechanisms like the Global Fund. 

Recommendation 2: Establish a group of Board Observers, including private sector participants. 

Private sector representation in a group of Board Observers would follow established precedents for private sector engagement in FIFs and create further opportunities for the Board to solicit the input and perspectives of the private sector. Representation should reflect the diversity of industry contributions to PPR. As a practical example, the governance structure of the Global Infrastructure Facility (GIF), a FIF for which the World Bank is also trustee, includes a group of Board Observers (‘the Advisory Council’) which has representatives from the private sector including commercial and investment banks, infrastructure finance organizations, and developers. 

Recommendation 3: Explore opportunities for shared country-level funding calls with those of other financing institutions involved in PPR. 

The objectives of the Pandemic Fund align closely with those of the other multilateral response mechanisms for pandemic response, including COVAX, AVAT, the Global Fund C-19RM, and others. Shared funding calls, whereby a single application from a potential beneficiary is used to assess eligibility across multiple funding sources would reduce the administrative burden on country-level beneficiary recipient entities and help reduce the risk of duplication of effort across financing mechanisms.  

FUNDING PRIORITIES 

To unlock the capabilities and expertise of the private sector across the broadest range of critical PPR activities, we recommend that the Governing Board and Secretariat: 

Recommendation 4: Support a mix of longer-term investments to support systems strengthening and shorter-term investments to support rapid response to emerging threats. 

The operating framework for FIFs gives the Governing Board flexibility in how investments are structured, including their duration. In determining how fund contributions are best allocated to deliver on PPR goals, the Board and implementing entities should consider investments that use longer-term financing instruments, necessary to allow for broad-based health system strengthening efforts, as well as shorter-term financing instruments that can be quickly deployed to support beneficiaries to respond to emerging threats. 

Recommendation 5: Ensure that implementing agencies of the Pandemic Fund take a holistic approach to investment, engaging the broadest range of private sector capabilities in PPR. 

A key principle of the fund’s design is that it should fill gaps in the global financing architecture for PPR. Given that successful multilateral financing mechanisms exist to support the delivery of medical countermeasures, for instance – COVAX and AVAT - the Board is urged to ensure that the fund supports PPR functions beyond the clinical and biomedical including, for example, investments in supply chain and logistics, data systems, and information technology. 

Recommendation 6: Support investments that address regulatory barriers to PPR. 

The Governing Board has broad autonomy in setting the strategy and priorities for fund investments. Given the cross-cutting impact of regulation on all aspects of PPR, the Board is urged to consider investments that can help streamline regulatory pathways, including at a regional or global level, and strengthen the capacity of those regulators involved in PPR. 

FINANCING MECHANISMS 

To ensure that investments are structured and financed in a way that maximizes private sector contributions to PPR, we recommend that the Governing Board and Secretariat:  

Recommendation 7: Engage with the private-sector arms of MDBs to explore opportunities for co-design and co-financing of PPR investments in the private sector. 

The private sector arms of MDBs have well-established processes and systems for engaging the private sector and for establishing the additionality and risk of investments in this sector. The use of MDBs to facilitate financial transactions was explored in the White Paper for the FIF for PPR and offers an efficient avenue for low-risk engagement of private sector enterprises in fund investments. Furthermore, MDBs are experienced in the design and facilitation of innovative financing mechanisms which, when combined with the private sector’s capabilities, agility, and risk tolerance, offer tangible pathways to catalyzing improved PPR.