OUR WORK

Innovative finance

We use innovative finance tools to secure lower prices and sustainable supply of medical products for people in underserved communities.

Stacked coins and a graph

What is innovative finance for development?

For more than 50 years, funding for official development assistance has mostly come from donors. Put simply, this usually means countries or philanthropic organisations giving money for programmes and projects that benefit people living in resource-limited countries.

In recent years, new approaches to financing development have emerged. These approaches realise the potential to go beyond straightforward grant-making by using targeted financial tools to accelerate and increase impact.

Innovative finance tools include pooled funding, demand aggregation, advance purchase agreements, volume guarantees, and leveraging balance sheets. They make smart use of financial resources, making development more effective, scalable and sustainable, by reducing the risks involved with investments in lower income countries.

Innovative finance tools for global health complement traditional donor funding sources to increase access and availability of medical healthcare products in underserved communities.

How does it work?

Innovative finance tools are deployed when the requirements of countries, funders and suppliers are aligned. The most appropriate tool is selected on the basis of the specific need and desired outcome. For example, an advance purchase commitment may be used to incentivise a supplier to increase production of a new product at a lower price for people living in underserved communities.

Innovative finance also helps to shape markets  for healthcare products by increasing transparency and building relationships. Suppliers have greater market visibility and confidence in demand while countries and funders receive a lower price and commitments to supply.

Our innovative finance tools

Our existing guarantees deploy two types of innovative finance tools – volume guarantees and procurement guarantees. We have a range of other tools available for use in the appropriate circumstances.

A warehouse full of mosquito nets showing volume guarantees in action
Innovative finance

Volume guarantees

Discover more about our volume guarantees and how they work.

Innovative finance

Procurement guarantees

Discover more about our procurement guarantees and how they work.