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Difficult choices: What will become of Catalytic Investments?
GFO Issue 422

Difficult choices: What will become of Catalytic Investments?



Article Type:

Article Number: 7

ABSTRACT The Global Fund Board meets next week against the backdrop of an unfinished replenishment campaign. We expect that there will be many tough discussions on how to best leverage the lower-than-expected resources to deliver the Global Fund’s bold new Strategy. In this article, we analyze the implications for Catalytic Investments.

The Global Fund to Fight HIV, Tuberculosis and Malaria Board will meet next week, and it might be one of its most consequential board meetings since the Global Fund was founded. For the first time, it will have to contend with fewer resources than it needs to deliver an ambitious new strategy. This uncertainty is made even worse considering that it is still unknown how much of the $18 billion described as the minimum requirements of the Investment Case is available in reality, as Italy and the United Kingdom are yet to formalize their pledges.

2020 and 2021 were the most crucial years of the Global Fund since its founding. As quickly as the COVID-19 pandemic emerged, the Global Fund had to act swiftly and decisively to understand and respond to counteract the widespread global havoc wreaked by the disease. In this regard, the Global Fund made sweeping operational changes to its way of working and took measures to understand the impact of the COVID-19 pandemic on its programs: for these steps, it must be applauded. It should be congratulated for not revising its targets for 2019 – 2022 despite not knowing the operational and political impact that COVID would have. By steadfastly sticking to its guns, the Global Fund remained bold, and this strategy paid off. Over this time, the Global Fund was able to marshal over $4.2 billion in COVID-19 grants to countries that needed support and, crucially, to protect the integrity of the programs and investments.

Against this backdrop, the Global Fund Board approved a new strategy for 2023-2028 in November 2021. The new design of the 2023-2028 Global Fund Strategy: Combating Pandemics and Building a Healthier and More Equitable World draws heavily from the lessons the institution learned throughout the COVID-19 pandemic. It renews the Fund’s mandate of ending HIV, TB and malaria by centering the needs of the communities who are at the heart of its mission. Indeed, the Strategy’s tagline, ‘communities at the center,’ supports the contributory and evolving objective of building people-centered approaches to get back on track post-COVID by leveraging twenty years of successes and lessons learned in the Fund’s fight against the three diseases.

The new Strategy also proposes fresh approaches that Global Fund and its partners must take to effectively deliver the Strategy’s ambitious goal and targets.  The Board understood this well, and there were a few testy discussions on critical issues such as the Global Disease Split and Catalytic Investments. Indeed, many of the Board’s Constituencies were not convinced by the Secretariat’s proposed overall approach to implementing the new Strategy, which resulted in the Board having to meet again for a retreat in July 2022. One of the key questions the Board wanted a response to was: What will the Secretariat do differently to implement this strategy? Given the current global context, the beginning of the replenishment campaign, an uneven global COVID recovery and, for the first time, a reversal in the gains made fighting HIV, TB and malaria, this perplexing question seemed ominous and inauspicious.

The Global Fund’s answer to this question is in its proven approach which it knows works and can deliver effective support to national disease programs. As laid out in the Investment Case, the Fund knows where to invest and how to make those investments impactful. One way of enhancing the impact of country-level investments has been through the development and implementation of Catalytic Investment mechanisms. These were first introduced in 2016 when the Board approved the development of initiatives that would ‘catalyze’ or ‘galvanize’ the national programming, especially in areas that support the development of resilient and sustainable systems for health (RSSH), which were critical to meeting the goals of the 2017–2022 Strategy.

Catalytic investments are made through three modalities, Matching Funds, Catalytic Multicountry Funds and Strategic Initiatives. The Matching Funds (MF) modality is the provision of funds to selected countries to incentivize the programming of the country allocation towards key strategic priorities in line with the Global Fund Strategy and partner disease strategies. Multicountry (MC) approaches are designed to focus on a limited number of important, pre-defined areas for achieving the Strategy’s goals and are best addressed at the multi-country level, especially for countries and/or regions with common issues (for example, harm reduction in Eastern Europe and Central Asia) or where many countries are transitioning from Global Fund support and may not be eligible for country-level investments. Strategic Initiatives (SIs) are limited funds available for centrally controlled initiatives that, due to their cross-cutting or off-cycle character, cannot be handled entirely by country allocations alone but are critical to ensuring national programs deliver on the Strategy.

The Board members and other key stakeholders such as key population networks were pleased to endorse these modalities which they viewed as long overdue and central to the Global Fund being able to deliver its mandate and mission.

For the 2023–2028 Strategy, funding for Catalytic Investments is driven by two principles: investing to maximize the impact and use of available funds to achieve the aims of the 2023-2028 Strategy; and investing in priorities that cannot be addressed through country allocations alone yet are essential to ensure the Global Fund’s investments are positioned to deliver its aims. Based on these principles, the Strategy Committee developed a prioritization approach, which sets out how the Global Fund should assess the impact and operational considerations of all existing and potential new catalytic priorities for the 2023-2025 allocation period.

Table 1. Catalytic Investments prioritisation criteria 2023-2028

Source: Eligibility and Allocation Review:  Catalytic Investments, Country Economic Capacity, Disease Burden and Other Areas (GF/SC17/13)

This Board-approved framework established a mechanism for flexibly allocating funds under catalytic investments based on the replenishment outcomes and which effectively lays out how these investments will be made in line with the aforementioned principles and the new Strategy’s priorities. The Board also considered the implementation lessons learned so far when considering how to maximize the impact of initiatives under each modality.  Ultimately, this resulted in recommended catalytic priorities under different funding scenarios, as presented in the table below.

Table 2. 2023-2028 Strategy goals, objectives, priority area and funding scenarios

Source: Catalytic Investment for the 2023 – 2025 Board Decision – GF/B47/04_Rev1

Of course, this decision was made with one significant caveat: the total available funds for catalytic investments would be based on the amount of available funds according to the replenishment outcome. Although this was well communicated in advance of the replenishment conference, no one really thought the Global Fund, which had earlier raised over $4 billion between replenishment cycles for the COVID-19 Response Mechanism (C19RM), would fail to meet its replenishment target. And especially given the United States’ (the Fund’s biggest donor) generous offer to match 50 cents to each dollar raised: who would have guessed that despite this, we would now be facing our current predicament? These results have placed catalytic investments, which are considered an essential part of delivering the Strategy, on the chopping block, with their cross-cutting interventions facing the possibility of being completely abandoned.

The tipping point – what’s at stake? And where do we go from here?

We know from constituency feedback that some countries and their beneficiary populations are only able to access services through multicountry grants – for example, the Ukraine comes to mind. As it stands, therefore, the Global Fund cannot afford to abandon its Catalytic Investment mechanisms. These approaches are crucial to delivering the next Strategy and, as a key global health institution, the Global Fund needs to become inventive. Because the Fund faces momentous challenges to ensure that it remains a credible and trusted global health partner and delivers its boldest strategy and bravest effort to date.

In this regard, we offer two mutually reinforcing perspectives. First, regardless of the outcomes, communities and their placement at the center of the organization’s work up to 2030 must be the main effort.  The Global Fund finally has a Strategy that focuses on the people and communities at the heart of the HIV, TB and malaria epidemics. Despite the seventh replenishment’s unsatisfactory outcome, the Fund cannot backslide on this commitment. Second, the Fund needs to elevate and strengthen its work with community partners and civil society so that it learns philosophically and in practical terms how to leverage better these actors to deliver catalyzing gains that will see it achieving the Strategy’s goals in a time of increasing financial hardship. Working with communities and civil society, including its Board constituencies, must become the Fund’s main effort.

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