Long Term Financing Commitments

1
Long Term Financing Commitments

• Christoph Benn
• Director
• External Relations and Partnerships

2
Multi-year pledges

• Prior to First Replenishment (2005), pledging was
  ad-hoc and mainly year-by-year
• Replenishment has promoted multi-year pledges
• In current Replenishment, most pledges cover 3
  years, with others ranging up to 8 years
• Has increased predictability and sustainability
  of support
• Allowed a clearer view of Global Fund ability to
  meet future needs, including renewals

3
Need for long-term, predictable funding

• Second Replenishment
• needs of countries will stretch far beyond the
  current replenishment period
• Donors noted the need to strengthen Global Fund
  capacity to provide such funding

4
Promissory Notes

• Promissory Notes (PN) offer donors a means of
  aligning their contribution with the cash flow
  needs of the GF
• PN must be convertible to cash on demand or in
  accordance with an encashment schedule
• Only two donors so far have contributed by PNs
• PNs can delay payments for donors and can reduce
  the cash balance of the GF

5
Funding Policy

• The Comprehensive Funding Policy was amended in
  2006 closer to policy of other organizations
• Determines amount that Board can approve, based
  on forecast of assets available at time of
  signing grant agreements (i.e. commitment)
• Requires that sufficient assets to cover the full
  financial commitment must be available prior to
  signing a grant agreement (typically, 2 to 3
  years
• Cash and promissory notes count as assets