Allocation and Catalytic Investment - PowerPoint Presentation

1. Allocation and Catalytic InvestmentAccess to Funding

2. 1Contents1Allocation MethodologyCatalytic Investments12

3. Overview2Global Fund has adopted a refined allocation methodology to Deliver the aims of 2017-2022 Strategy: Investing to End EpidemicsIncrease impact of programs to prevent, treat and care for people affected by HIV, TB and malaria, and build resilient and sustainable systems for health The refined methodology does this byDriving increased proportion of funding to higher burden, lower income countriesSpecifically accounting for epidemics among key and vulnerable populations, the threat of MDR-TB, and for malaria elimination effortsProviding sustainable and paced reductions where funding is decreasing

4. Refinements guided by Key Lessons Learned from 2014-20163Adopting allocation-based funding model enabled Global Fund to actively shape portfolio and align funding to achieve impact in line with Global Partner plansLessons learned indicated scope for refinement to improve impact:Limited ability to scale-up in higher burden, lower income countriesCountry Bands limited flexibility to address critical funding shortfallsNeeds of key & vulnerable populations, threat of MDR-TB and malaria elimination insufficiently addressedIncentive funding used to fill gaps rather than catalyze toward strategic aimsMultiple multi-country approaches, not always focused on key global regional barriers to ending epidemics

5. Calculation of Country Allocations4Disease BurdenCountry Economic CapacityxFormula-derived AllocationAllocation FormulaMaximizes impact in line with disease burden & country economic capacityAll but $800m for robust & predictable allocationsScale-up for high burden, below-formula componentsMovement of limited funds & flexibility to balance paced-reductionsIncreased emphasis on MDR in TB allocations, as recommended by Technical PartnersInitial Calculated Amount$800m moved for scale-up, impact, paced reductionsMax/ min shares, external financing adjustments

6. Transparent and accountable process, carried out under Strategy Committee oversight Qualitative adjustment process 2017-2019AimsRefine allocations for epidemiological contexts not addressed through formulaAccount for country-specific contextual considerations to maximize the impact of Global Fund resources in line with the 2017-2022 Strategy Two-stage Process (does not change global disease split) Stage 1: Refining for epidemiological contextsStage 2: Single, holistic adjustment Potential for impact & potential absorptionPopulations disproportionally affected by HIVLow Endemicity Malaria Supported by contextual considerationsincl. coverage gaps, risk, domestic/ external financing trends, program efficiencies, buying power, cost of continuing essential programmingTB adjustment to be pursued for next allocation period

7. Outcomes of Allocation Methodology 2017-2019616%2,0001,000014%2%0%13,00012%10%8%6%4%7,0006,0005,0004,0003,00012,00011,00010,0009,0008,000GNIpc (2015)Composite disease burdenU-LMIUMILIL-LMIGlobal Fund Board approved $11.1bn for allocation 2017-2019:$10.3bn for country allocations & $800m for catalytic investments Size of the bubble represents relative size of 2017-2019 allocationRefined methodology drives increased funding to higher burden, lower income countries

8. 7Balancing increases and paced reductions through portfolioRefined methodology balances scale up and paced reductionsIncreases in many countries with higher burden, lower economic capacity on average 15% higher than current and projected spend levels (1-114% across portfolio)Balanced with sustainable paced reductions to many countries with lower burden, higher economic capacity, on average 86% of current and projected spend (50-99% across portfolio, where allocations > $10m) Global Fund’s new Sustainability, Transition and Co-financing and Challenging Operating Environment support program sustainability, transition and flexibilities in crises

9. 8Increased funding to extreme and severe disease burden countries Distribution of 2017-2019 Allocations – Disease BurdenHIVTBMalaria$800$800$800

10. Distribution of 2017-2019 Allocations – Income & Regions9Income (2015)Region$800$800Increased funding to low income countries, and sub-Saharan Africa, among others

11. 1010Applicable malaria catalytic investments are Elimination in Southern Africa, the Greater Mekong Sub-region, Catalyzing Market Entry of new LLINs and Piloting the Introduction of the RTS,S Vaccine (GF/B36/DP06).NB. Uses 2017 eligibility so does not reflect funding for countries previously eligible in 2011-2016+ $54 millionAdolescent Girls and Young Women SSA Priority Countries MDR-TB Priority CountriesTop 15 Malaria Burden Countries+$41 millionHIV/AIDS AllocationsTB AllocationsMalaria Allocations+ $89 million$55m$190m$189mCatalytic InvestmentsAGYW catalytic investments TB catalytic investments Applicable malaria catalytic investments+$621 million+ $879 million+ $375 millionIncreases to priority countries aligned with Strategy aims

12. 62% -80%Impact of Refined 2017-2019 Allocation MethodologyTogether with domestic resources & other external financers, with allocation methodology positioned to achieve aims of 2017-2022 Strategy & Global Partner PlansGlobal Partner Plan Impact Targets 86% -100%Lives savedIncidence reductionIncreased funding above current spend in:Sub-Saharan AfricaHighest burden/lower income countries;AGYW epidemics, MDR-TB and top 15 high burden malaria countries;Balances scale-up with sustainable paced reductionsAccounts for epidemics among key & vulnerable populations, threat of MRD-TB, and malaria elimination efforts

13. 12Contents12Allocation MethodologyCatalytic Investments12

14. Aims of Catalytic Investments13In order to achieve the aims of the GF Strategy 2017-2022Global Fund Board recommended that USD 800m be retained for catalytic investments to: Incentivize use of country allocations for strategic priorities in line with the Global Fund and partner disease strategies, including for key and vulnerable populations, gender-based programs and contributing to resilient and sustainable systems for health:”Matching funds – to incentivize programming of country allocations for strategic prioritiesMulti-country approachesStrategic initiatives

15. What are the objectives of modalities for catalytic investments?141Matching Funds: to incentivizing the use of country allocations for strategic priorities in line with the Global Fund and partner disease strategies, including for key and vulnerable populations, gender-based programs and contributing to resilient and sustainable systems for health.2Multi-country approaches: to target key, strategic multi-country priorities deemed as critical to meet the aims of the 2017-2022 Strategy and in line with global disease priorities.3Strategic initiatives: to continue the funding for critical approaches deemed necessary for the success of country allocations in line with the objectives of the 2017-2022 Strategy, but not able to be funded through allocations due to their cross-cutting, innovative or off-allocation cycle nature.A portion of overall resources retained for programs, activities, and strategic investments that are unable to be addressed through country allocations alone, yet deemed crucial to ensure Global Fund investments are positioned to deliver against its strategic aims.Purposes of catalytic investments

16. Overview of Board-approved Catalytic Investments 2017-2019~ 80% directly to country programsIllustrative ModalityTotal Funding (US$ m)% of FundingMatching Funds35644.5%Multi-County Proposals27234.0%Strategic Initiatives17221.5%Total800$200mHIVTBMalariaRSSHBroader Strategic Key Populations; Human Rights; Adolescent Girls & Young WomenFinding missing TB casesMalaria Elimination, Drug and LLIN Resistance, Piloting first Malaria VaccineProgram Sustainability, Service Delivery & Health Workforce; Supply Chain Strengthening; Data Systems & Use for Program Quality; Community Rights & GenderProspective Country Evaluations; Emergency Fund$190m$202m$166m$42m

17. 1. Matching Funds (1/2)Approach to catalyse delivery against priorityInformation to applicantsFunding request16Matching funds to reward programming of country allocations in line with catalytic priority Catalytic priorities and associated costs to be pre-defined by Strategy Committee, to ensure countries know upfront whether catalytic funding is applicable to themSecretariat to map specific disease programs and identify applicable countries based on epi contextsFunds for catalytic priority will be divided between applicable country components in proportion to their underlying allocation amountsProvides an amount notionally available to each applicable country component Funds requested through prioritized and costed above allocation request with programmatic elements covering more than the amount available for matching fundsRequirement that country allocation also be programmed towards catalytic priorityEligibility for pre-determined investments communicated as part of allocation lettersSecretariat to ensure:Timely dissemination of information on catalytic priorities, principles and purposeInterventions likely to be considered catalytic known by applicant prior to applicationApplication process is clearly and consistently communicated to all country stakeholdersRelevant preconditions for leveraging funding commitments from countries are highlighted

18. 17Requirement for country to demonstrate sustained domestic financing and political commitments, as appropriateTRP to develop process and methodology for reviewing and prioritizing above allocation requests including catalytic prioritiesGAC to further articulate conditions around matching funds for different countries, taking into account allocation amounts, strategic portfolio considerations as relevant, country contexts, absorptive capacity and performance, among othersReview and approvalAdditional considerations for award of funds1. Matching Funds (2/2)TRP reviews request for technical soundness, strategic focus and potential for impactTRP to evaluate whether the allocation amount has been appropriately programmed towards the catalytic priority before recommending funding for a country componentFunds awarded by the GAC, conditional upon assessment of whether approach is considered catalytic, impactful, and whether can instead be funded through efficiencies in grant makingWhere funds remain unawarded by country, reassigned to other countries within catalytic priority* Actual priorities determined by Strategy Committee in consultation with Technical Partners, Communities and Civil Society.1 GF/B36/DPxx

19. Process steps to operationalize catalytic investments - matching funds 18Step 2:GAC Review & DecisionStep 1: ConsultationStep 3:CommunicationDetermine applicable countries for each matching funds catalytic prioritiesPrinciples and rationale for the proposed countriesCheck-in with partners for feedback on proposed countriesHigh level matching requirements GAC deliberations and steer on priority countries for catalytic matching funds, and matching requirementsAllocate funds for matching to each applicable countriesPrinciples and approach to allocating matching fundsMatching requirements and additional considerations, if anyGAC final recommendations on Matching Funds, and Matching RequirementsCommunication to applicants, Allocation letters to include:Matching funds catalytic priority(ies) for which the applicant is eligibleMatching requirements to be met by the country; and approach to accessing matching fundsStep 4:Application & ReviewApplication and Review - for Matching Funds:Submit application through prioritized above allocation requestTRP and GAC Review: Evidence that country allocation has also been programmed towards catalytic priority

20. Any other considerations put forth by Functional Teams, Regional Managers / Department Heads and the GACAdjustments based on catalytic / strategic burden, minimum/maximum grant size, etc. Based on initial amounts proportionate to allocationAllocation+Range of factors and data points considered identifying applicable countries (epi context) and allocating matching fundsFocus on Impact, Think Big, Think BoldFeasibilityAbsorptive capacity(a) Feasibility of utilizing funds additional to country allocations; (b) If catalytic priority can be achieved with efficiencies; (c) country capacity.Potential for impact of investing in catalytic priority based on incentivizing use and what can be achieved through country allocations Potential for Impact

21. What is matching?Current discussion with GAC20Overall purposeTo incentivize the programming and use of country allocations and drive impact in strategic priorities critical to achieving the Global Fund Strategy To meet the conditions for matching funds, an applicant must show:An increase in the 2017-2019 allocation amount designated to the relevant catalytic investment priority, compared to the budget levels in Global Fund grants from the 2014-2016 allocation period. This amount should at minimum be a 1:1 match for the amount of available matching fundsA corresponding increase in programmatic targets and coverage anticipated through both the increased use of country allocations and use of matching funds towards the relevant catalytic investment priorityFlexibilities and exceptions are applied as appropriate based on TRP and GAC review on a case by case basis (e.g. for heavily commoditized grants)

22. What is matching? – Example scenarios21Example 1Situation:A country is eligible for 2,000,000 in key populations (KP) matching funds. In the last funding cycle they invested 500,000 in KP programming.  Conditions for matching funds:Increase investment from 500,000 to a minimum of 2,000,000 of their 2017-2019 allocation in KP programming; andCorresponding increase in their programmatic targets in line with the total 4,000,000 in available funding (total = allocation investment + matching funds).Example 2Situation:A country is eligible for 2,000,000 in KP matching funds. The grants are heavily commoditized and there is no fiscal space in the allocation to increase funding to KP, but the country has good existing KP programming that is funded by domestic or other sources. If countries are not able to increase funding within allocation:Flexibility will be applied to reduce the risk of displacing funding away from essential programs. The TRP will review country’s proposal indicating how the matching funds would catalyze appropriate ambitious plans and interventions even if not directly funded by GF grants.Example 3Situation:A country is eligible for 2,000,000 in KP matching funds. In the last funding cycle they did not invest in key KP.  Conditions for matching funds:Invest 2,000,000 of their 2017-2019 allocation in KP programmingIf countries do not prioritize the designated area of investment/ are not able to meet the condition:The designated amount goes back into the matching funds ‘pot’ for reinvestment in the portfolio of pre-selected countries for that priority area.

23. Budget analysis to understand current spending levels in catalytic priorities, proportionate allocation investments in commodities, etc. Apply flexibilities and exceptions in implementation of matching funds as appropriateMonitor outcomes of Program Split to mitigate inappropriate reallocation to matching prioritiesSimplify application process for accessing matching fundsMoving funding from essential programs to meet matching requirements, e.g. for highly commoditized grants with fiscal constraintsDrawing funds away from other disease programs during program split discussions to meet matching requirementsUsing matching funds to backfill gaps, e.g. in programs with paced reductionsApplicable countries do not apply for catalytic matching funds due to complexity of processes22Risk AnalysisRisks that may potentially undermine matching objectivesPotential RisksMitigation Measures

24. For components eligible for catalytic priority areasAmount awarded may be less than funds requested/availableSources of funding for Prioritized Above Allocation Request (PAAR)23AllocationPrioritized Above Allocation RequestEfficienciesCatalytic Matching FundsPortfolio OptimizationPrivate SectorDebt2HealthNational Strategic PlanGlobal Fund sources:External sources:UQDAll applicants are encouraged to submit an ambitious, evidence-based, costed PAAR

25. Catalytic Request (5.2) – within prioritized above allocation request24Prioritized above allocation request (PAAR): All applicants are encouraged to submit an ambitious PAAR for maximum impact. (5.1)Applicable countries for matching funds: Submit a Catalytic Request (5.2)TRP review: Technically sound interventions will be registered as UQD.2017-2019 period: Opportunities to update PAAR and register UQD during grant-making and grant implementation Framework for prioritization of items for portfolio optimization will be discussed and approved by the Strategy Committee in Q1 2017Catalytic Request/ PAAR Country components (under program continuation) can submit their catalytic request for TRP review during grant-making or implementation.PROSAllows flexibilities for countries to submit Catalytic Requests when ready to maximize impactFits with streamlined approach to program continuation (20 March submission for Window 1 TRP)Does not disadvantage components under program continuation and allows time to align with programming of allocation during grant-making or implementationEnables more rapid operationalization of Board DP on Catalytic Investments, while not delaying accessing allocation for all componentsLimitationsEntails a 2-stage process with funding request and catalytic request/ PAAR submitted for TRP review in 2 different stagesMay cause delays to realizing investments in catalytic priorities if countries do not access in timeAs per GAC discussion

26. 2. Multi-country approaches (1/3)25Multi-country priorities to be pre-shaped or RFP to meet catalytic priorities: HIV - Key populations sustainability and continuity – US$ 50 MTB - multi-country responses – US$ 65 MMalaria: Southern Africa, Mesoamerica, Greater Mekong – US$ 145 M RSSH - PSM Strengthening: developing local resources for countries – US$ 12 MApproach to catalyse delivery against priority3 operational categoriesPre-shaped existing programs within the scope of a catalytic investment priority that should be continued or refocused.  Pre-shaped new multi-country programs within the scope of a catalytic investment priority and where no existing program can be continued.  Limited Call for Proposals within the scope of a catalytic priority, where requirements do not sufficiently position approach to be proactively shaped.

27. .2. Multi-country approaches (2/3)26Way forward: existing programsSecretariat to define criteria to inform the process of determining which existing multi-country programs are continued, refocused or discontinued; as well as which new multi-country grants are identified for pre-shaping Criteria will build on TERG recommendations and TRP lessons from the review of existing regional programs during the 2014-2016 allocation period, in consultation with GMD, CRG and other relevant Departments, TRP and Partners. Secretariat to conduct a rapid assessment of existing multi-country portfolio based on defined criteria and present a recommendation for EGMC/GAC approvalCommunication to all existing multi-country programs, on outcome of the review and selection processResponsible transition for existing multi-country approaches not to be continuedWay forward: new grantsSecretariat to develop guidance for new pre-shaped multi-country proposals and Limited Call for Proposals that will include: application process, regional dialogue, grant making, implementation and grant closure.

28. 3. Strategic initiatives27Operational considerationsApproach to awardRationale for optimal approach Secretariat to conduct robust process to determine the final recipients of strategic initiative funding, consulting with partners where appropriateWhere relevant, Secretariat to ensure strong coordination of specific activities with those being undertaken by other partners and donors to ensure they are complementary and build on each otherEach strategic initiative managed by team within the Secretariat, while work may be undertaken either by the Secretariat or selected partner organizationsWhere relevant, oversight undertaken within advisory or other external governance structuresFunds centrally managed by secretariat, subcontracting to other providers, as appropriateAward of funds overseen by Secretariat’s Executive Grant Management CommitteeProspective evaluations to be planned for each initiative, for evaluation of impact and to inform future approachesContracts need to be centrally managed for purposes of efficiency, practicality and to ensure oversight, given their cross-cutting or off-allocation cycle natureOverall management approach worked as envisioned for allocation 2014-2016* Actual priorities determined by Strategy Committee in consultation with Technical Partners, Communities and Civil Society.

29. 28PriorityIllustrative Modality Associated Cost ($m) Aggregate Total ($m)HIV  2001.1 Key Populations Sustainability and ContinuityMulti-Country50 1.2 Key Populations ImpactMatching Funds50 2. Human RightsMatching Funds45 3. Adolescent Girls and Young WomenMatching Funds55 TB  1901.1. Incentivising Programming of Allocations to find missing TB CasesMatching Funds115 1.2. Addressing Specific Barriers to Finding Missing TB cases, Especially in Key Populations and Vulnerable GroupsStrategic Initiative7 1.3 Development of Community and Innovative Approaches to Accelerate Case FindingStrategic Initiative31.4. TB Multi-country ResponsesMulti-Country65 Malaria  2021.1. Malaria Elimination: Cross-cutting Support in 21 Low Burden CountriesStrategic Initiative7 1.2. Malaria Elimination: Southern AfricaMulti-Country20 1.3. Malaria Elimination: MesoamericaMulti-Country6 2. Greater Mekong Sub-regionMulti-Country119 3. Catalysing Market Entry of New LLINsMatching Funds33  Strategic Initiative2 4. Piloting Introduction of the RTS,S Malaria VaccineStrategic Initiative15 RSSH  166Sustainability, Service Delivery and Health Workforce 1.1. Sustainability, Transition and Efficiency Strategic Initiative 15 1.2. Integration of Service Delivery & Health Workforce ImprovementsMatching Funds 18 1.3. Technical Support, South-to-South Collaboration, Peer Review and LearningStrategic Initiative 14 Data   1. Data - Data systems, data generation and use for programmatic action and quality improvement Matching Funds40  Strategic Initiative10 1.1. Data - National Strategic Planning for Data Systems   1.2. Data - District Data Systems for Quality Improvement   1.3. Data - Disaggregated Data Generation, Analysis and Use   1.4. Data - Impact and Epidemiological Measurement, Reviews and Evaluations   PSM   1.1 PSM - Diagnosis and PlanningStrategic Initiative20 1.2 PSM - Innovation Challenge FundStrategic Initiative10 1.3 PSM - Developing Local ResourcesMulti-Country12 1.4 PSM - Pre-qualification of Medicines and IVDsStrategic Initiative12 CRGStrategic Initiative15 Broader Strategic Areas  42Evaluations   TERG Prospective Evaluations*Strategic Initiative22 Emergency FundStrategic Initiative20 Total 800800