Pledge Guarantee for Health Overview Addis Ababa - November 2013

1. Bridge Financing for Global Health: Maximizing Donor Aid through Domestic Innovative Financing Pledge Guarantee for Health OverviewAddis Ababa - November 2013

2. F4D’s focus is to leverage innovative financing to bring about funding efficiency in the product and service markets of international development • Bilateral/Multilateral Donors • Foundations • Sovereign/National • Private Sector • Hybrids (SMOs)

3. In a resource constrained world, there is a need to recapture the value we lose due to inefficiencies Procurement Mobilization T.A./Training Advocacy 3

4. PGH uses bridge financing to address cash flow problems in development Donor funds arrive and pays bank 4 Funding source (e.g. Donor) Procurement Mobilization T.A./Training Advocacy Commercial bank 2 Commercial bank supplies Letters of Credit (and payment) on behalf of MoH 1 Guarantees 50% of donor funding MOH uses Letters of Credit to purchase order, manufacturer delivers supplies Ministry of Health / Civil Society (PGH customer) 3 1 Guarantor Manufacturer (e.g. Pharmaceutical company) 4

5. PGH uses bridge financing to address cash flow problems in development Procurement Mobilization T.A./Training Advocacy 5

6. PGH uses bridge financing to address cash flow problems in development A Procurement Mobilization T.A./Training Advocacy Procurements Without Transactions Advisory Transactional Nigeria Comoros Islands Ethiopia B Policy Advancements D Zambia Facilitated Transactions C Senegal Pricing Discounts Ethiopia Philippines 6

7. PGH intends to promote knowledge transfers that will enable sustained interventions Procurement Mobilization T.A./Training Advocacy 7

8. The PGH value proposition isalready starting to see quick wins Leverage private capital to smooth donor funding flows Reduce business risk for suppliers to incentivize investments in increased quality, affordability and access Increase procurements that have greater value for money baked in Increase aid effectiveness Empowered Allow buyers to remove inefficiencies in the procurement process that cause suppliers to price in premiums (e.g. better payment certainty, pooled procurement, etc) Accelerated Ability to rapidly issue bridge funding while waiting for donor disbursement to avoid stock-outs which can have dangerous impacts on both patients and the community Efficient With better control of the procurement timing recipients will be able to avoid emergency production and delivery which are costly and come at the expense of additional beneficiaries 8

9. PGH’s M&E methodology is routed in a theory of change driven on delivering value for money in both Health and Financial systems irrespective of deals Output: Outcomes: Impact Indicators: Advocacy (i.e. Comoros) 1a/b/c: $ saved, extra product procured Health System Value-for-Money 2a/b/c: Health/social impact (deaths averted, CYP) b) Non-Guarantee Deals (i.e. Philippines) 3a/b/c: Supply chain speed (time to delivery, time to disbursement) $ mobilized 4a/b/c: Financial efficiency ($ mobilized per Guarantee $) c) Guarantee Deals (i.e. Zambia, Ethiopia) Financial System Value-for-Money 5a/b/c: Financial scale (Net $ mobilized) 11

10. With the help of our partners we are well on our way 9