NEW YORK—The Soros Economic Development Fund is providing a $100 million procurement guarantee as part of a new $250 million risk-sharing initiative that seeks to increase the supply of affordable COVID-19 vaccines to 92 of the world’s lowest-income countries.
SEDF is partnering with MedAccess, a UK-based social finance company, and Gavi, the Vaccine Alliance, to provide procurement guarantees for Gavi’s global COVAX vaccine distribution system.
The COVAX Advanced Market Commitment (AMC) mechanism provides COVID-19 vaccines free of charge for 92 of the world’s lowest-income countries—with more than 1.2 billion doses already shipped to AMC countries. In addition, AMC countries can also use the COVAX Cost-Sharing Mechanism to order more doses using domestic resources or low-cost financing from their multilateral development bank partners, enabling them to protect more people, more quickly.
The new guarantees are aimed at increasing take-up of the Cost-Sharing Mechanism by facilitating the financing of orders. With an initial $100 million from MedAccess and $50 million from Gavi, the initiative will enable COVAX to order more doses from manufacturers on behalf of AMC countries that choose to participate in cost-sharing. By purchasing through COVAX, countries benefit from lower prices per dose negotiated for a range of COVID-19 vaccines.
SEDF’s participation will help COVAX to respond to country requests for additional doses in the event of a future shock or demand spike.
Catherine Cax, acting chief executive officer of SEDF, noted that SEDF had joined the initiative because conventional investors had been unable to resolve an impediment in the procurement process—the impossibility of pinpointing and insuring risk.
“SEDF made this commitment despite the risk uncertainties and moved into an area of business that is new to us—all because of the urgent need to respond to the global COVID pandemic. We would encourage more impact investors to elevate their risk tolerance in pursuit of outsized impact, and to be prepared to be innovative in moving to address most urgent need.”
The COVAX Cost-Sharing Mechanism was launched in partnership between Gavi, the World Bank, and the Asian Development Bank in July 2021. Since then, the European Investment Bank has also joined and committed €300 million in financing for countries wishing to access additional doses through the mechanism. Countries with multilateral development bank–approved vaccination programs can make requests to COVAX for additional vaccine doses. To date, Gavi has already ordered 140 million additional vaccine doses through cost sharing on behalf of 15 AMC countries, at a total value of $800 million.
Countries specify the preferred type of vaccine, number of doses, and their desired delivery window, enabling COVAX to aggregate demand and exercise its options under agreements with vaccine manufacturers. The multilateral development bank provides a payment confirmation, which enables COVAX to confirm its order. Subject to finalization of the legal agreement, MedAccess and Open Society’s support aims to provide a backstop for Gavi during the period from exercising its option to country payment being confirmed; without the guarantees, Gavi would be required to hold donor funds in reserve. This guarantee provides financial independence to Gavi for the benefit of COVAX AMC country partners.
This significant guarantee is just one part of Open Society Foundations commitment to vaccine justice, which has included SEDF investing in the transfer of medical technology to the Global South, and Open Society’s ongoing global advocacy for full funding of the global response, increased manufacturing through patent waivers, and increased global financial support to indebted countries under COVID-related economic stress.