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UNICEF’s guarantees would speed PPE procurement in low-income countries

ImpactAlpha, May 19UNICEF USA is tapping investors and donors for a $3 million vehicle to give low-income countries a boost in the hyper-competitive global market for personal protective equipment.

Grants and recoverable grants made to UNICEF USA’s Fast Fund will guarantee up-front payments so 90 low-income countries can procure PPE for frontline healthcare workers. Such guarantees, usually provided by banks on behalf of suppliers, have dried up in the COVID crisis, says the organization.

Impact Fund for Children, UNICEF USA’s impact investing arm, will manage the fund. The fund has received an initial investment of $250,000, subject to raising an equal amount of matching funding.

  • Advance payments. Fast Fund will use recoverable grants provided by investors to guarantee UNICEF transactions with PPE suppliers. UNICEF will then lock in orders with advance payments to PPE suppliers. Once suppliers deliver the PPE, Fast Fund guarantees will be released. After 18 months, the Fast Fund will return the grants to investors – if the guarantees have not been drawn down.
  • Impact leverage. UNICEF USA estimates the $3 million fund can facilitate $54 million of UNICEF purchases over one year. Guarantees cover one-third of advance costs; funds can be recycled up to six times each year. A $100,000 recoverable grant made from a donor advised fund, says UNICEF USA, can provide PPE to 12,800 healthcare workers. Fast Fund aims to be fast: UNICEF USA says guarantee requests will be turned around in two days. 

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