The World Bank Group has launched a $500m insurance fund to combat deadly pandemics in poor countries across the globe.
The Pandemic Emergency Financing Facility (PEF) is a fast-disbursing global financing mechanism, which is claimed to create the first-ever insurance market for pandemic risk.
Japan has agreed to provide $50m in funding for the facility, which was designed jointlyby the World Health Organization and the private sector.
The PEF includes an insurance window, which aggregates funding from the reinsurance markets with the proceeds of World Bank-issued pandemic bonds such as catastrophe or Cat, as well as a complementary cash window.
The insurance window will offer up to $500m for an initial period of three years for outbreaks of infectious diseases that are expected to cause major epidemics.
The funding will be used for diseases caused by new Orthomyxoviruses (influenza pandemic virus A, B and C), Coronavirida (SARS, MERS) and Filoviridae ( Ebola, Marburg).
It will also be used for other zoonotic diseases such as Crimean Congo, Rift Valley and Lassa fever.
All 77 countries eligible for financing from the International Development Association (IDA) can secure coverage from the PEF, which is expected to be operational later this year. The IDA is the World Bank’s fund for the poorest countries.
World Bank Group president Jim Yong Kim said: "Pandemics pose some of the biggest threats in the world to people’s lives and to economies, and for the first time we will have a system that can move funding and teams of experts to the sites of outbreaks before they spin out of control.
Image: The World Bank Group headquarters building in Washington, D.C. Photo: courtesy of Shiny Things.