HSBC has entered into a public-private partnership with the Asian Development Bank (ADB) to support the purchase of Covid-19 vaccines and related equipment, as part of efforts to help supply chains in Asia scale up to deliver vaccines at the volume and pace necessary to put an end to the pandemic.

The partnership extends a US$1.2bn risk-sharing agreement between HSBC and ADB launched in July 2020 to support PPE suppliers, and will see a further US$300mn put into the vaccine ecosystem –from sourcing and manufacturing through to distribution – by the bank.

With this agreement, HSBC becomes the first bank to join the ADB’s trade and supply chain finance programme’s (TSCFP) US$500mn vaccine import facility, which was unveiled in December last year.

The facility sees the ADB provide unfunded support guarantees for private sector purchases of vaccines and vaccine components, covering the risk of non-payment. By leveraging the ADB’s AAA rating, the programme enables the funding provided by HSBC to reach further down the supply chain than would otherwise be possible. This is critical for developing economies for which trade finance shortages can represent a significant barrier to trade.

While vaccination rates are picking up pace in some economies, there remain serious disparities in vaccine roll-out, particularly among developing countries in Asia. According to HSBC research, while Singapore has administered 9.39 doses per 100 people, and India is currently administering around 2.5 million doses per day, the Philippines, Thailand, and Vietnam are effectively still at the start line due to limited supply, and so far have only achieved 0.31, 0.08 and 0.04 doses per 100 people respectively.

“The global fight against Covid will only be won when as many people as possible are vaccinated as quickly as possible,” says Surath Sengupta, global head of financial institutions and portfolio management at HSBC. “This programme’s timely and targeted financing will be a force for good. It will help build robust supply chains that enable a regular flow of vaccines and help ensure developing economies don’t fall behind while delivering health and economic benefits to Asia Pacific and beyond.”

Support granted through the ADB facility is provided dependent on certain criteria, which include that the flows must be vaccine or vaccine-related, and that any purchases must be consistent with a country’s allocation plan. Another requirement is that vaccines purchased under the facility must be approved by either the World Health Organization or a stringent regulatory authority.

Other banks are expected to join the programme in the coming weeks, with Steven Beck, head of trade and supply chain finance at the ADB, telling GTR recently that he expects to see the total amount of the facility leveraged to US$1bn as a result.