The underfunding of catalytic investments has aroused much debate

Author:

Aidspan

Article Type:

Article Number: 7

Update on Country Funding and Catalytic Investments

Despite being unable to raise enough funds to meet the full target amount of the Seventh Replenishment, the Global Fund maintained the country funding budgets at NFM3 levels for its new grant cycle for the period 2023-2025. However, catalytic investments were reduced. This article is a brief summary of the discussion at the Global Fund's 49th Board meeting on the Update on Country Funding and Catalytic Investments.

Context

At the 49th Board meeting being held in Hanoi the Board was briefed on the Update on Country Funding and Catalytic Investments. The update focused on three important aspects: (i) an overview of funding request (FR) status; (ii) the grant approval process; and (iii) the conversion of national allocations into signed grants.

This article outlines the update provided to the 49th Board meeting and summarizes stakeholders’ views on the Update. It is based on the Board paper of the same title.

Update on Country Funding

After the last Board meeting in November 2022, Allocation Letters were sent to applicants inviting them to submit FRs under the new funding cycle, Grant Cycle 7 (GC7). These Letters specified the total amount for the country and any other issues to be taken into consideration in the FR. The Secretariat and its partners have been actively supporting country dialogue in preparation for GC7. The expectations related to the new Global Fund Strategy 2023-2028 have been embedded in the trainings, webinars, e-learnings and applicant guidance material made available from July 2022 onwards.

The Board thanked the Secretariat for its work in the face of several constraints: in preparing and sending out the Allocation Letters before the end of 2022, despite delays due to waiting for Replenishment Conference pledges to be forthcoming; and in supporting applicants in the development of high-quality FRs. The Board were informed of the organization’s close engagement with technical partners; it appreciated the integration of specific modules for resilient and sustainable systems for health (RSSH) and human rights and gender (HRG) in the capacity building offered by the Fund and such partners, supporting countries to better integrate these topics into Global Fund grants.

The application process is now well underway

The diagram below shows the timeline for the GC7 period which began with the publication of the new materials in July 2022, the development and delivery of training webinars for the Secretariat and then the wider partnership, support for partner-hosted workshops and meetings, and the e-learning portfolio. It shows how country dialogue was launched last year and continues on an ongoing basis throughout this FR-development year, 2023. It also indicates the first two deadlines for Windows 1 and 2, the Windows under which the majority of eligible countries will submit their FRs.

Figure 1. Allocation period 2023-2025 timeline

 Between January and December 2024, the Global Fund will disburse the first tranche of funding to approved countries and CG7 program implementation begins in earnest.

Figure 2. What did applicants think of their experience?

Change coordination efforts

To date, more than 6,800 users have been involved in the process to enable countries to submit their grant applications. The Secretariat calls this “change coordination” since there were several new components and enhanced focus areas in GC7, resulting not only from the new Strategy 2023-2025 but other global guidance and reviews from the Technical Review Panel (TRP) and others on what had and had not worked (for example, see the 2020-2022 TRP Observations Report).

Table 1. Use of grant application capacity building offerings

Funding request registration by TRP Window and amounts allocated

The Global Fund opened four TRP Windows for GC7 for invited countries to submit funding applications to address the three diseases. Once submitted, these are evaluated by the TRP based on a set of criteria, including programmatic impact, financial sustainability, and risk management.

During the 2023-2025 allocation period, approximately 205 applications for funding are expected. 136 funding requests, or approximately 66%, have been registered to date. The majority of FRs for this allocation period will be reviewed by the TRP in the first half of 2023.

 

Figure 3. Funding request application by TRP Window

The amounts allocated by window vary. For this allocation period, the FRs currently registered for consideration in 2023 amount to $11.8 billion, or 90% of the country-communicated allocation of $13.1 billion.

Figure 4. Allocation amount by TRP Window

 Currently, $13.128 billion is available for country allocations, of which $4.9 billion was recommended for grant-making in Window 1. 

 

Figure 5. Allocation now in grant-making by component

 

Applicants have submitted disproportionately high amounts in PAAR in GC7 Window 1, already more than half of the PAAR submitted in NFM3 (GC6). In GC6, 96% of PAAR was approved as Unfunded Quality Demand (UQD); in Window 1 of GC7, only 82% of PAAR was considered UQD.

Figure 6. Substantive increase in size of PAAR submissions