With looming global economic challenges that risk weakening the funding pool for health programs in low- and middle-income countries, the Global Fund to Fight AIDS, Tuberculosis and Malaria has launched a roadmap to refine its Catalytic Investments (CIs) under the current Grant Cycle 7 (GC7). These adjustments, presented at the Fund’s 28th Strategy Committee meeting in Geneva on 7-8 July 2025, represent a proactive and flexible response to currency fluctuations and uncertainties around donor pledge conversions.

The revised CI framework is not merely a cost-cutting exercise, it is a strategic rebalancing aimed at preserving the Fund’s ability to deliver high-impact interventions, maintain private sector confidence, and ensure that countries continue to make progress against the three diseases, even as financial conditions tighten.

What are Catalytic Investments?

Catalytic Investments are distinct from the Global Fund’s core country allocations. While grants to countries are the bedrock of the Fund’s health financing, CIs serve as targeted enablers—used to fill strategic gaps, pilot innovations, promote regional collaboration, and mobilize co-investments, especially from the private sector.

For the 2023–2025 funding cycle, the Board had approved 13 CI priorities totaling US$555 million. These are delivered through three modalities:

• Strategic Initiatives (SI) that support global and regional activities managed centrally.
• Matching Funds (MF) that require countries to co-invest in specific health priorities; and
• Multicountry Approaches (MC) support regional efforts to address cross-border health issues.

Well over US$154 million of this amount is made possible by private sector investment, highlighting again the value of public-private partnerships in the Global Fund’s model.

Adjustments in responding to fiscal pressures

Given the lag in donor pledges and amount converted, the Global Fund has had to reassess how much of the original CI funding approved can be allocated. However, the Secretariat made it clear that this financial recalibration would not be a blunt instrument. Instead, it pursued a “differentiated” response—one that took into account:

• the status of individual investments,
• their relevance in the evolving health context,
• the degree of private sector co-investment, and
• the operational feasibility of reductions.

Importantly, the Fund decided not to slash all CIs equally. Private sector contributions, being tightly earmarked and bound by agreements, are fully protected. The goal has been to avoid disruption to the activities most critical now and into Grant Cycle 8 (GC8).

Strategic Initiatives: Smart reductions

Strategic Initiatives, consisting of US$166 million of the CI portfolio, were reviewed in two stages. First, an 11% across-the-board reduction was taken from unspent balances. A qualitative review then permitted further refinement taking into account performance, momentum toward GC8 goals, and consideration of uncommitted amounts.

This careful review resulted in only minor cuts in high-priority SIs:

• Health Financing, Community Systems and Responses, and the Digital Health Impact Accelerator faced small percentage cuts, all under 10%.
• Programs under Human Rights & Gender, Community Engagement, and NextGen Market Shaping were protected due to strong private sector backing and relevance in the current context.

The final result: only US$9.5 million (11% of SI allocation funding) was cut, and all SIs remain operational and aligned with strategic objectives.

Multicountry approaches: Flexibility within guardrails

The Global Fund manages a portfolio of multicountry (MC) grants that are designed to have a regional and cross-border impact against diseases and to build resilient and sustainable systems for health, with a total value of US$112 million. These grants address challenges that countries working in isolation may find difficult to tackle, like drug resistance, mobile population transmissions and joint laboratory facilities.

Four priority areas within the multicountry grants were reviewed and adjusted based on how far each initiative had progressed and what minimum level of funding they needed to remain viable. These were:

• Efforts to combat drug-resistant malaria across Asia - the Resistance to Artemisinin Initiative (RAI) in East Asia and the Pacific - received a relatively small 8% cut (US$4.4 million from a US$50 million budget). Even with the cut, most of the program’s resources are preserved, a sign of how difficult it is to dismantle something so vital in a region that is in danger of losing ground in controlling the disease.
• Key Populations Sustainability programs, with a presence in areas such as Latin America, the Middle East and Southeast Asia, experienced cuts of up to 15%. No further cuts were made, however, as these programs are key to reaching marginal populations with services for HIV as any reduction could have reversed gains.
• Malaria Elimination in Southern Africa and Lab Systems Strengthening were not reduced at all, representing a strong commitment from the Global Fund to the earlier-stage and high-impact programming. Laboratory systems are the cornerstone of disease detection and surveillance, and with malaria elimination being high on the agenda in the southern part of the continent.

Grants that already were in place were generally protected from cuts, while those in earlier stages of planning were more vulnerable to changes. This approach provided the needed flexibility while protecting the core goals and areas of impact.

Matching Funds: Protecting country-led priorities

At the same time, Matching Funds, valued at US$277 million, were treated with even greater caution. These are distinct from standalone grants, as they match country allocations dollar for dollar per program to address specific strategic-need priorities, such as:

• Prevention of HIV among key populations (men who have sex with men, people who inject drugs, sex workers and transgender individuals).
• Finding and treating missing TB cases — a significant obstacle to ending TB.
• Building community health systems, making services accessible to all, especially in underserved areas.

Due to their strong linkages to country programs, Matching Funds are seen as critical to maintaining country ownership and co-financing. Consequently, the Global fund took a conservative, principled response to any change applying a series of safeguards:

• Changes to Matching Funds would be a last resort and made only after considering all other budget cuts.
• An escalation apparatus was implemented to step in if money would cause undue harm to priority areas such as HIV prevention or community systems.
• Custom tracking mechanisms were set up to ensure that countries continue to invest in important themes such as gender equality and human rights, which are central to achieving health equity and sustainable outcomes.

Even after these adjustments, the emphasis on catalytic priorities that spark broader system change or innovation remains deeply embedded in how grants are structured and implemented.

A Platform for the Future

The revised CI strategy is not just about adapting to GC7 constraints, it is also a platform for the future. By preserving private sector confidence, protecting high-value priorities, and maintaining flexibility at the country level, the Fund hopes to position itself for a strong Eighth Replenishment.

If additional funding becomes available, whether through late-arriving pledges or new private sector investments, the Global Fund has committed to updating the Strategy Committee and redeploying funds as needed. CI performance will be reviewed again at the December 2025 meeting, with learnings from this adaptive process expected to inform broader reforms to the Fund’s financial architecture.

Conclusion: Pragmatism meets purpose

Faced with a constrained fiscal reality, the Global Fund’s adaptive approach to Catalytic Investments in GC7 demonstrates that strategic clarity and flexibility can go hand in hand. While some reductions were inevitable, the Fund has worked diligently to ensure that no CI priority has been rendered ineffective.

By shielding high-impact programs, preserving private sector co-investments, and reinforcing national ownership through matching funds, the Fund is charting a path that balances financial stewardship with life-saving ambition. As global health threats evolve and the demand for resilient health systems grows, this recalibrated CI model may well serve as a template for adaptive, impact-driven financing in future cycles.