14 April 2021
JAKARTA – Germany, Indonesia, and the Global Fund to Fight AIDS, Tuberculosis and Malaria today signed a new agreement that will increase support to tuberculosis programs in Indonesia. That will be achieved by converting €50 million of debt owed by Indonesia to Germany into investments in public health programs supported by the Global Fund in Indonesia.
This agreement is an example of Debt2Health, an innovative financing mechanism that is designed to increase domestic financing in health by converting debt repayments into lifesaving investments in public health programs. Under individually negotiated ‘debt swap’ agreements, a creditor nation foregoes repayment of a loan when the beneficiary nation agrees to invest all or part of the freed-up resources into a Global Fund-supported program.
The funds unlocked through this agreement will complement the Global Fund’s investments in Indonesia’s fight against tuberculosis for the 2021-2023 period, which amount to US$160 million. The debt swap proceeds will support the expansion of tuberculosis response in the country, including services and treatment for multidrug-resistant tuberculosis, community-based case identification and treatment follow-up.
“We thank Germany for its commitment to this form of innovative financing, especially at a time when the world confronts two deadly and airborne pandemics – tuberculosis and COVID-19,” said Peter Sands, Executive Director of the Global Fund. “We encourage other countries to use such financing approaches to generate additional resources to fight infectious diseases and reinforce pandemic preparedness.”
“Debt2Health goes beyond traditional financing for development by encouraging countries to mobilize additional domestic funding for health,” said Luky Alfirman, Director General Budget Financing and Risk Management, Ministry of Finance of the Republic of Indonesia. “We will use this opportunity to invest and focus more in the fight against tuberculosis and to highlight Indonesia’s leadership in global health and development.”
Indonesia has made great strides in the last few years in its fight against tuberculosis, which is currently the fourth-leading cause of death in the country. Between 2015 and 2019, treatment success rates of diagnosed tuberculosis rose from 39% to 67%. Indonesia has set an ambitious target of hitting a 90% treatment success rate for tuberculosis by 2022.
So far, Debt2Health has contributed more than US$152 million to programs against AIDS, tuberculosis and malaria and to support resilient and sustainable systems for health, through debt swap agreements between Australia, Germany and Spain on one side; and Cameroon, Côte d’Ivoire, Democratic Republic of Congo, Egypt, El Salvador, Ethiopia, Indonesia, Jordan and Pakistan on the other side.