Update on the Modification of the Global Fund Grant Renewals Policy and Process

01 December 2011

At its 25th Board meeting in Accra, Ghana, the Global Fund Board adopted measures to ensure strategic investments in light of current resource constraints. With respect to grant renewals, these measures include a (1) adapted grant renewals policies and processes; and (2) a revised application and approval process for all grant renewals. These measures will apply to all renewals (Phase 2s, RCC Phase2s and Periodic Reviews) that are due to be reviewed starting in January 2012.

The Board decided that eligibility criteria will be applied to grant renewal applications.  To ensure that a majority of Global Fund investments continue to benefit lower-income countries, the Board further decided that the total funding approved for grant renewals for Low Income Countries (LICs) will be no less than 55% of any annual funding window.  The Secretariat is preparing specific information to address the different scenarios this creates for countries with renewals.  This information, tailored to specific country scenario, will be shared with all affected countries on 12 December 2011. 

The Secretariat will continue to provide additional information and guidance on the modification of the renewals process as they become available. 

Key Implications on Renewals 

  1. Revision of grant  renewals policies:
    1. Starting 1 January 20121, new eligibility criteria based on income level classification (GNI per capita) and latest disease burden classification from the World Health Organization (WHO) will be applied to renewals as follows: 
      • Upper Middle Income Countries (UMICs) belonging to the G20 and having less than an extreme disease burden will no longer be eligible for renewals; G20 UMICs that will no longer be eligible for renewals that were scheduled for review during 2012 will qualify to receive one year of transition funding, in addition to other funding it remains eligible to receive, with a ceiling of one-third of the total reduction resulting from the application of this policy;

      • All other UMICs will still be eligible for renewals, subject to additional criteria described below;

      • The one-year grace period for changes in a country’s income classification is no longer available.

Countries which are eligible for one-year transition funding with a ceiling of one-third of the original renewal amount are not guaranteed the full one-third amount.  All renewals final amounts will continue to be based on performance-based funding principles. 

    1. Starting 1 January 2012,new counterpart financing requirements as per the Eligibility, Counterpart Financing and Prioritization (ECFP)Policy will be applied to countries undergoing review for renewal funding as follows:  
      • Countries applying for renewals are expected to meet the following minimum threshold for counterpart financing2, based on their income level:

Income Classification 

Minimum threshold 

Eligible Upper Middle Income Countries (UMIC)s

60%

Lower Middle Income Countries (LMICs)

Upper LMICs

40%

Lower LMICs

20%

Lower Income Countries (LICs):

5%

      • The Global Fund expects countries applying for renewals to show increasing government contributions to the disease program and health in absolute terms each year to avoid displacement of government spending by external assistance.   

    1. Starting 1 January 2012,“Focus of proposal” requirements of the ECFP Policywill be applied to grant renewals for countries undergoing review for renewal funding as follows: 

      • Eligible UMICs must focus 100% of the renewals budget on special groups and/or interventions3.

      • LMICs (whether Upper-lower or Lower-lower) must focus at least 50% of the renewals budget on special groups and/or interventions.

      • LICs are not subject to this requirement.

    2. Starting 1 January 2012,a large portion of investments made at renewals will be allocated to lower-income countries: 

      • The total funding approved for grant renewals for LICs will be no less than 55% of the total annual renewal funding window. 

    3. Effective immediately, a staggered commitment policy will be applied: 

      • When the Board approves the renewal of an existing grant, the Secretariat is required to commit that approved funding in annual tranches, with an initial commitment for the first year of funding only. Additional one-year funding tranches may subsequently be committed by the Secretariat, conditional upon the availability of funding. This decision applies to all unsigned renewals as of 23 November 2011.

The Secretariat will communicate with all applicants that are in the process of submitting or have already submitted their RCF and are scheduled to be reviewed after 1 January 2012.  This communication will provide detailed information on their situation, including potential need to resubmit their RCF or to provide any additional information reflecting the new changes and any available and relevant guidance from the Secretariat.  In cases of re-submission, applicants may be granted up to a three-month extension to allow the time required to prepare and submit the request.  More information on different scenarios regarding the status of the RCF will be communicated to affected countries by 12 December 2012. 

  1. Revisions to grant renewal processes: 

The following revised grant renewals process will apply:

    • Starting 1 January 2012, and applying to grants which have not yet received an invitation to apply for renewal funding, the new renewals application and approval process will include: (i) strong upfront guidance from the Secretariat, (ii) an iterative request development and review process, (iii) a Country Team pre-assessment meeting prior to sending the invitation to submit an RCF; and (iv) more robust review with better informed decision making.  As an interim measure, for applicants that have already submitted or have been invited to submit an RCF, the Secretariat will send proposals over US$ 100 million per grant (for Phase 2s and RCC Phase 2s) or PR (for Periodic Reviews) to the TRP to discern whether and how the proposal may be updated.  

    • Starting 1 January 2012, the TRP will support the renewals process by providing independent technical expertise to the Secretariat panel making recommendations on grant renewals.  

For specific questions you may contact your Fund Portfolio Manager or send general inquiries to .

Footnotes: 

1) This will apply to grants that are scheduled for review starting in January 2012.

2) The minimum threshold is defined as the minimum level of a government’s contribution to the national disease programs as a share of total government and Global fund financing for that disease. 

3) Special Groups and/or Interventions are underserved and most-at-risk populations‘ and/or highest impact interventions within a defined epidemiological context.  This is further defined in Annex B of the ECFP Policy.  

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