OREANDA-NEWS. On behalf of the Federal Ministry for Economic Cooperation and Development KfW is investing EUR 10 million in the Global Health Investment Fund (GHIF) guaranteed by the Bill & Melinda Gates Foundation. The GHIF, which has a target size of USD 100 million, is an innovative financing instrument in the health sector and is also attractive for private investors.

The GHIF funds the development and launch of new medicines, vaccines, diagnostic instruments and family planning products in developing countries. In the later stages of clinical studies pharmaceutical companies, research institutes and government institutions are able to apply for funding to use these products to fight disease. The focus is on health products which can be used to treat diseases prevalent among poorer sections of the population which pharmaceutical companies do not have an incentive to invest in combatting in the absence of subsidies.

“Thanks to the Fund, more people will have access to improved health care - while at the same time a financial return will be generated for investors. The projects supported by the fund will improve the health status of many people, especially women and children, and will thus contribute to poverty alleviation,”explained Dr Norbert Kloppenburg, Member of the Board of KfW.

The fund is currently worth USD 94 million. Alongside KfW other investors include the International Finance Corporation, Grand Challenges Canada, the Children’s Investment Fund Foundation, GlaxoSmithKline, JP Morgan Chase and other private sector investors. The fund will invest its resources in eight to ten projects worldwide. A minimum of one third of the amount invested will be invested in health projects that benefit children.

The Global Health Investment Fund is the first fund in the health sector to meet the criteria of an impact fund, i.e. it creates a financing mechanism that is attractive for the private sector while also achieving improvements in health (social impact) in developing countries.