Global Health, Development and Business Leaders Announce New Innovative Financing Partnership to Deliver Essential Health Supplies More Quickly and Efficiently

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May 17, 2013 7:30 am ET

A New 5-year Guarantee Has the Potential to Unlock Immense Private Sector Financing, Accelerating Efforts to Achieve MDGs

Today, leading global health and development experts from the public and
private sectors are joining forces at the 2013 GBCHealth Conference to
announce a new partnership that will leverage private sector funding to
speed up delivery and access to life-saving health supplies, such as
contraceptives, bed nets, and medicines to those in need. Through Pledge
Guarantee for Health (PGH), this new financing mechanism will help
increase the impact of each dollar of donor funding and ultimately
improve healthcare access and outcomes for the millions who are helped
by foreign aid.

The traditional sequence and timing of aid disbursement can lead to
delays in supply and commodity procurement. PGH, developed and incubated
by the United Nations Foundation, facilitates innovative financing that
expedites the disbursement of donor funds, making global health supplies
more accessible and more affordable for developing countries.

The United States Agency for International Development (USAID) and the
Swedish International Agency for Development Cooperation (SIDA) are
scaling up PGH with a 5-year partial guarantee to help speed up the
procurement of essential medicines and health supplies by governments
and civil society partners. In collaboration with commercial banking
partners, this partial guarantee enables PGH to access $100 million in
credit that, over 5 years, can mobilize a tremendous value of lending
capacity.

Recognizing the potential for increased access and affordability that
accelerated financing can provide, private sector suppliers such as
Merck & Co., Inc., known as MSD outside the U.S. and Canada, and
Vestergaard Frandsen have stepped up to provide up-front price discounts
to aid recipients who utilize PGH to purchase their life-saving health
supplies.

With the support of leading multilateral donor organizations such as the
Global Fund to Fight AIDS, TB, and Malaria, this cross-sector
collaboration can help boost the impact of donor aid and accelerate
progress towards key health Millennium Development Goals and improve the
lives of mothers, children, and families globally.

A financial tool developed by the United Nations Foundation, PGH works
to streamline the procurement of life-saving health supplies. By
facilitating short-term loans to developing country recipients, this
innovative financing partnership enables recipient countries to access
higher quality and more effective methods of health supplies at no
additional cost. Currently, due to extensive lag time between the donors
and recipients, aid disbursements can take up to 14 months. By providing
funding up front, PGH shaves months off of the
commitment-to-disbursement timeline.

Quotes from key principals

Dr. Raj Shah, Administrator, USAID: “This announcement builds on
our efforts to partner with the private sector to help end preventable
child death within a generation. USAID’s partnership with the Pledge
Guarantee for Health will help make this promise a reality by ensuring
that people around the world—especially mothers and their children—have
access to life-saving vaccines, bed nets, and other supplies that are
delivered more quickly, cheaply, and broadly than ever before.

“The PGH guarantee, facilitated through USAID’s Development Credit
Authority, will guarantee 50 percent of any loan that commercial banks
issue to PGH over the next five years. This will allow commercial
lenders to get comfortable with this unique structure and eventually
continue lending to PGH after the guarantee expires. Through this new
approach, we can cut inefficiency even further and better maximize the
impact and reach of each dollar we invest.”

Dr. Anders Nordström, Ambassador for Global Health, Swedish Ministry
of Foreign Affairs:
“We all have to think creatively and
collaboratively, through partnerships like PGH, to bring stakeholders
together and focus on delivering more donor value for money.”

Dr. Mark Dybul, Executive Director of the Global Fund to Fight
AIDS, Tuberculosis and Malaria
: “The Global Fund has undergone a
number of enhancements in our process and we are joining efforts with
partners like Pledge Guarantee for Health to not only accelerate
delivery of essential health commodities, but also to increase value for
money.”

Ms. Kathy Calvin, President & CEO, United Nations Foundation:
“Pledge Guarantee for Health works because it delivers aid faster,
saving millions of lives. While the financial mechanisms may be complex,
the goal of PGH is simple: to quickly and effectively reduce deaths from
easily preventable diseases.”

Mr. Adam Schechter, President of Global Human Health, Merck & Co.,
Inc.:
“By joining in this partnership with PGH, our company will
help to provide developing countries and local health workers with
improved faster access to our life-saving medicines and vaccines. This
aligns with our overarching goal to partner with governments to develop
sustainable programs and efforts to increase access to health care.”

Mr. Mikkel Vestergaard Frandsen, CEO, Vestergaard Frandsen:
“Through this valuable partnership with PGH, we can help save more lives
and prevent unnecessary illness among people living in developing
countries, who will receive our anti-malaria bed nets quickly and
efficiently.”

Mr. Aron Betru, Managing Director, PGH: “Building off the success
of PGH’s proof-of-concept transactions in Sub-Saharan Africa with the
help of our guarantor, donor, supplier and banking partners, we are
ready to scale up and move on a number of transactions in
contraceptives, vaccines, anti-retrovirals and malaria bed nets.
Leveraging innovative financing, we hope to help programs achieve more
impact with each deal, helping every donor dollar reach the end-user
faster and with more value.”

About Pledge Guarantee for Health

Pledge Guarantee for Health is an innovative financing partnership
designed to increase the availability and predictability of funding from
international donors for health commodities. Through a 5-year partial
guarantee from the governments of the United States and Sweden, PGH is
able to leverage $100 million in credit from commercial banking partners
which, in turn, extend short term credit to traditional donor aid
recipients. Recipients are empowered to use donor committed funding in
advance of disbursement, resulting in increased buying power, greater
value, accelerated procurement and delivery, and, ultimately, more lives
saved.

About US Agency for International Development

The American people, through the U.S. Agency for International
Development, have provided economic and humanitarian assistance
worldwide for over 50 years.

USAID’s Development Credit Authority works with investors, local
financial institutions, and development organizations to design
strategic risk-sharing agreements, known as credit guarantees, that
unlock financing from banks for entrepreneurs in the developing world.
Through these loan guarantees, DCA has leveraged $2.7 billion in
financing from local lenders for infrastructure projects, small, and
medium sized businesses. These loans have spurred untold economic growth
over the last 13 years in 70 countries. For more information, please
visit www.usaid.gov.

About Swedish SIDA

Sida is a government agency working on behalf of the Swedish parliament
and government, with the mission to reduce poverty in the world. Through
our work and in cooperation with others, we contribute to implementing
Sweden’s Policy for Global Development (PGU). We work in order to
implement the Swedish development policy that will enable poor people to
improve their lives. Another part of our mission is conducting reform
cooperation with Eastern Europe, which is financed through a specific
appropriation. The third part of our assignment is to distribute
humanitarian aid to people in need of assistance. We carry out enhanced
development cooperation with a total of 33 countries in Africa, Asia,
Europe and Latin America. Our selection of cooperation countries are
based on political decisions made by the Swedish government.

About The Global Fund

The Global Fund is an innovative financing institution that provides
funding to countries to support programs that prevent, treat and care
for people with HIV and AIDS, Tuberculosis and Malaria. The Global Fund
to Fight AIDS, Tuberculosis and Malaria was created in 2002 to
dramatically increase resources for the fight against the three
pandemics. It spurs partnerships between government, civil society, the
private sector and communities living with the diseases, the most
effective way to fight these deadly infectious diseases. The Global Fund
does not manage or implement programs on the ground, relying instead on
local experts. It works with partners to ensure that funding serves the
men, women and children affected by these diseases in the most effective
way.

About Merck & Co., Inc.

Today’s Merck & Co., Inc., Whitehouse Station, N.J. USA, known as MSD
outside the United States and Canada, is a global healthcare leader
working to help the world be well. Through our prescription medicines,
vaccines, biologic therapies, and consumer care and animal health
products, we work with customers and operate in more than 140 countries
to deliver innovative health solutions. We also demonstrate our
commitment to increasing access to healthcare through far-reaching
policies, programs and partnerships. For more information, visit www.merck.com.

About Vestergaard Frandsen

Vestergaard Frandsen is a global public health company that innovates
game-changing solutions to improve the lives of disadvantaged people
worldwide. We operate according to a Humanitarian Entrepreneurship
business model and aim to support the United Nations Millennium
Development Goals. Our award-winning LifeStraw® water filters
combat diarrheal diseases, and over a half billion of our best-selling
PermaNet® bed nets have contributed to reducing malaria
deaths by one third since 2000. Other company solutions target neglected
tropical diseases, increasing HIV testing, reducing hunger and
malnutrition, and mitigating climate change.

Merck & Co., Inc.
Lainie Keller, 908-423-4187
or
Pledge Guarantee for Health:
Paige Robson, +1-952-836-5202
probson@unfoundation.org
or
UN Foundation:
Becky Davis, +1-202-862-6305
rdavis@unfoundation.org
or
US Agency for International Development:
usaidpressofficers@usaid.gov, +1-202-712-4320
or
Swedish SIDA:
Roger Garman, +46-70-254-8752
roger.garman@sida.se
or
The Global Fund to Fight AIDS, TB and Malaria:
Seth Faison, +41-79-788-1163
seth.faison@theglobalfund.org,
or
Vestergaard Frandsen:
Meryl Rader, +1-908-528-3826
mer@vestergaard-frandsen.com

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