The World Bank’s “pandemic bonds” are designed so investors pay in the event of an outbreak
When the Ebola epidemic broke out in West Africa in 2014, in took several months to get large amounts money (around $100 million) to the countries that needed it, according to the World Bank. In that time, thousands of people died. In an effort to fight the next pandemic faster, the World Bank has turned to global financial markets, issuing $425 million in “pandemic bonds” and related derivatives to pay for emergency relief.
The money raised comprises the bulk of a $500 million Pandemic Emergency Financial Facility that will provide funds for poor countries in case of outbreaks of infectious diseases over the next five years. The bonds are designed to transfer the risk of a health crisis in low-income countries to the global financial markets. World Bank president Jim Yong Kim said this will help move away from “the cycle of panic and neglect” that has characterized recent pandemics.
- Health Care