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ensures availability of supply, and puts downward 2. Dedicated Trust for
pressure on pricing. However, the standard operating Pandemic Response
model for both the PRGT and GRA is to provide
loan proceeds directly to a member country. The
IMF should, to the greatest extent possible, ensure
resources go directly to the procuring entity (e.g. IMF PANDEMIC RESPONSE
Global Fund or Gavi). TRUST
(On-lent/donated SDRs from wealthy countries)
This approach also provides benefits from the
perspective of Governments on-lending or donating
their SDRs. When an advanced economy pledges to 92 AMC COUNTRIES
on-lend a portion of the newly allocated SDRs to the OR 133 LMICS
new window via the PRGT, it would:
Option 2 calls for creating a new, dedicated trust
Accrue interest from the on-lent SDR within the IMF for pandemic response. Unlike Option
from the PRGT to match the interest 1, a new trust could build off the design elements of
liability due to IMF the PRGT and GRA, but would entail the establishment
of a new, dedicated entity for pandemic response.
Creating a new trust would enable governance,
underwriting, loan structuring and reporting to be
Experience no reduction in the reserve specifically tailored to the needs of countries to
assets held by the country’s treasury respond to the Covid-19 and future pandemics.
or central bank because it can replace Another key advantage is that the set of countries
the SDR as a reserve asset with the new eligible for concessional finance could be expanded
loan asset beyond the 70 PRGT countries to include a broader
set of countries.
Experience minimal credit risk because The downside is that the creation of a new trust
the PRGT loss reserves provide a buffer would require a higher threshold for approval by IMF
against delinquent payment of loans shareholders and would therefore be politically more
challenging. It would also require the creation of
new architecture for the trust to be operationalized.
For example, in order for the new trust to be able to
The challenge with this option is finding a means of lend on concessional terms to borrowing countries,
making loans under the GRA available at attractive lending, subsidy and reserve accounts would have to
terms to middle-income countries with a vaccine be established akin to the PRGT. While feasible, this
financing shortfall that are not eligible for conces- would require significant additional time to design and
sional PRGT financing. This includes countries such operationalize than Option 1.
as India, Indonesia and Nigeria, for example.
This new trust could also remain in place for future
pandemics as needed, with the downside that ring-
fencing resources in this manner could be considered
inefficient and lead to underutilization over time. It
could be available to all member countries, though
THE ROCKEFELLER FOUNDATION ONE FOR ALL AN UPDATED ACTION PLAN FOR GLOBAL COVID-19 VACCINATION 20
