Debt2Health Mechanism

Once an agreement is signed the beneficiary country makes a counterpart payment in line with the terms and timing agreed between the parties. After the payment the creditor cancels the corresponding amount (with or without discount, depending on the conditions of the individual agreement). The money will be invested in the beneficiary country using the normal Global Fund system and procedures. For example: Germany, Indonesia and the Global Fund signed the first agreement in September 2007. In June 2008 the first of five instalments was due and Indonesia paid €5 million to the Global Fund. As agreed the German development bank KfW cancelled the corresponding amount of €10 million claims on Indonesia.