Transition from the Third to the Fourth Replenishment Period
The Board notes its prior decision to approve the Amended and Restated Comprehensive Funding Policy (GF/B31/DP05) (the “CFP”) as a standard financial management framework, and acknowledges unique measures are required to facilitate the 2014 allocation of resources to Country Bands, the first under the allocation-based funding model, to manage the transition from the rounds-based system.
Accordingly, based on the joint recommendation of the Finance and Operational Performance Committee (the “FOPC”) and the Strategy, Investment and Impact Committee (the “SIIC”), the Board adopts the following transition framework:
The total amount that will be allocated to Country Bands (the “Total Allocation”) using the allocation methodology will be comprised of the following amounts:
The Initial Allocation, in the amount of USD 10.22 billion, as approved under decision point GF/B31/DP08, which will determine the amount of incentive funding; and
The amount of Sources of Funds, as defined in the CFP, originating from the Third Replenishment Period (2011 – 2013), or earlier, which have not been disbursed as at 31 December 2013 (the “Existing Funds”), in the amount of USD 5.55 billion, as recommended by the FOPC.
While each grant applicant’s portion of the Total Allocation must be requested by the applicant and approved by the Board prior to 31 December 2016, it may be utilized beyond such date in accordance with the terms of the relevant grant agreement;
The Total Allocation will address the remaining pipeline of grant funding due to Board-approved proposals or other Board decisions originating from the Third Replenishment Period, or earlier, as at 31 December 2013, (the “Existing Grants Pipeline”) while taking a comprehensive approach such that performance and strategic impact are reflected in the investment of the entirety of funds;
While each disease component’s portion of the Total Allocation will typically cover a period of four years starting from 1 January 2014, the Secretariat, working together with countries and/or regions, has the operational flexibility to structure longer or shorter grant implementation periods while applying the principles of the allocation model (GF/B28/DP4) to guide funding levels towards the amounts derived from the allocation formula;
Accordingly, a 25-percent target minimum reduction compared to the most recent available four-year disbursement levels (the “Graduated Reduction”) will be applied across the portfolio of disease components that have funding levels above their notional shares under the allocation methodology; and
If a disease component’s Existing Grants Pipeline exceeds the amount that would result from applying the Graduated Reduction described in paragraph 2.e. above, then instead of applying the Graduated Reduction, the disease component’s Existing Grants Pipeline will serve as a basis to determine its total allocation starting from 1 January 2014.
The Board notes the transition framework established under this decision represents measures tailored to address the unique circumstances and challenges of transitioning from the rounds-based system to the allocation-based funding model and shall not apply to subsequent allocations and Replenishment Periods.