World Bank launches Pandemic Emergency Finance Facility
The World Bank has launched Pandemic Emergency Finance Facility (FEP) to help countries and health agencies fight deadly disease outbreaks.
FEP is a financing mechanism designed to quickly mobilize funds to tackle global disease outbreaks and create a new insurance market for pandemic risk.
It was unveiled at the G-7 Finance Ministers Summit held in Ise-Shima, Japan. Japanese Government has committed to donate $50 million dollars to it, becoming the first donor.
- It was designed and built by World Bank in collaboration with the World Health Organization (WHO) and the private sector reinsurance companies etc.
- PEF is meant to work almost like an insurance policy, but it will be mainly to protect against deadly disease outbreaks by ensuring “surge funding” to response efforts.
- The funding will be disbursed according to a complex trigger mechanism and activation criteria based on four categories of infectious diseases.
- It will provide coverage up to US 500 million dollars for outbreaks of infectious diseases most likely to cause major epidemics for an initial period of 3 years.
- The major epidemics covered under PEF include new influenza pandemic virus A, B and C, MERS, SARS, Ebola, Crimean Congo, Marburg, Rift Valley, Lassa fever, etc.
- The insurance window under it will combine the funding from the reinsurance markets with the proceeds of catastrophe or Cat bonds (World Bank issued pandemic bonds) as well as a complementary cash window.
- It will be for the first time World Bank Cat Bonds will be used to combat infectious diseases.