The US International Development Finance Corporation (DFC) has partnered with Citi to provide a risk management solution to Gavi, the Vaccine Alliance (Gavi), to enable the funding of Covid-19 vaccine purchases through the Covax facility.

The Covax facility provides access to vaccines to lower-income funded nations, who receive the vaccines as donations, as well as a number of higher-income self-financing countries that have no bilateral deals with manufacturers, who can purchase enough doses to vaccinate 10-50% of their populations directly through the facility.

In order for the self-financing countries to obtain the vaccines, they are required to have political risk insurance cover, and according to Devex, a media platform for the global development community, not all countries have been able to buy this insurance on the private market.

To tackle this, DFC will provide US$383mn in political risk insurance to nine unnamed middle-income countries across Latin and Central America, the Middle East, and Eastern Europe, supporting Gavi’s efforts to pre-purchase up to 2 billion vaccines directly from manufacturers and allocate these vaccines throughout the world.

Citi’s export and agency finance unit acted as the sole financial advisor throughout the stages of establishing the political risk insurance framework for Gavi, while law firm Linklaters provided legal counsel to Gavi on the DFC risk management solution.

This is not the first time Citi, which was appointed by Gavi as its financial advisor for the Covax facility in November last year, has worked on a risk mitigation structure for the programme: in August, the bank joined forces with insurance broker Marsh to help facilitate the shipment of Covid-19 vaccines to 21 countries through the initiative.

“Citi is honoured to work with DFC and Gavi on this very important effort in mobilisation against Covid-19,” says Jay Collins, vice-chairman of banking, capital markets and advisory at Citi. “We are delighted with the opportunity to support our partners at DFC and Gavi to help design and implement a risk management solution to create more capacity and enable greater equitable, fair and timely access to Covid-19 vaccines across the globe, particularly by developing countries.”

DFC’s insurance transactions in support of Gavi and Covax fall under the agency’s Health and Prosperity Initiative, through which DFC aims to catalyse US$5bn of investment in support of global health resilience. The initiative includes a call for proposals from private sector entities seeking DFC support for health-related investments in developing countries, including projects that support the global response to Covid-19.