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HIV/AIDS: Global Fund cancels funding

JOHANNESBURG, 24 November 2011 (IRIN) - The Global Fund to Fight HIV, Tuberculosis (TB) and Malaria has cancelled its next round of funding and cut off countries like Russia, China and Brazil after donors failed to deliver US$2.2 billion in previously committed funding. Emergency funding measures will now be put in place for some countries.

The Global Fund board took the difficult decision of cancelling Round 11 at its latest meeting, which concluded on 22 November in Accra,  Ghana. A reduced pool of eligible countries will now be able to apply for new funding only after the Fund's next disbursement in 2014.

A Transitional Funding Mechanism has been established to provide emergency relief to current recipients who will run out of money before 2014. But this will apply only to essential services such as HIV treatment, care and prevention according to a statement issued by the Fund.

However, international medical humanitarian organization Médecins Sans Frontières (MSF) has pointed out that the decision will not allow countries to scale up or improve HIV treatment, and will also limit treatment for drug-resistant forms of TB.

"The bottom line is that there's $2.2 billion in outstanding pledges that haven’t been paid by the donors," said Global Fund board member Shaun Mellors of South Africa's Foundation for Professional Development. "If those pledges had been turned into contributions we'd obviously be in a very different situation, but there just isn't enough money for Round 11, or even Phase II renewals of grants."

Global Fund grants have usually been disbursed in two phases: in Phase I, countries qualified for two years of initial funding; in Phase II they could apply for an additional three years of funding as part of a renewal.

In the developing world, treatment for 70 percent of HIV patients is financed by the Global Fund. Countries like Zimbabwe, Malawi and Mozambique, which rely heavily on Global Fund money to support national HIV programmes, will now be encouraged to use their drafted Round 11 proposals as a basis for funding requests in 2014.

Swaziland's decision to forgo Global Fund money contributed to shortages of antiretroviral (ARV) medication earlier in 2011 after the government was unable to generate enough revenue to fill the gap. Its country coordinating mechanism, which distributes Global Fund money nationally, called Round 11 a "do or die" moment, and had begun work on its Round 11 application.

South Africa's HIV lobby group, the Treatment Action Campaign (TAC), is largely dependent on Global Fund money to sustain its operations. Delays by South Africa's Department of Health in disbursing US$ 760,000 in Global Fund money to TAC led the group to issue a statement on 23 November that without this money, TAC will be forced to close its doors and retrench all its employees at the end of January 2012.

''The bottom line is that there's $2.2 billion in outstanding pledges that haven't been paid by donors. ''
The group, which recently helped formulate South Africa's new national strategic plan on HIV, TB and sexually transmitted infections, urged the Global Fund to make sure that all sub-recipients were paid by the first week of January.

Cuts run deep

Round 11 had been postponed twice due to insufficient funding, partly because lower interest rates were achieved on the Global Fund's World Bank account. According to MSF, countries Kenya, Lesotho and South Africa had also been told that they would not be eligible for Round 11 funding due to financial shortfalls despite the fact that none of these countries had yet reached international universal ARV access targets of 80 percent uptake.

Mellors told IRIN/PlusNews the Fund had also been forced to stop signing Round 10 grants two weeks ago. A funding deficit of up to US$.6 billion meant board members were faced with tough decisions at the meeting, and no one was pleased with having to find what seemed the least painful solutions.

Cutting Round 11 was not enough. To finance the Transitional Funding Mechanism and some Round 10 applications, the board had to cut deeper, cutting  future funding for upper-middle-income countries without large HIV epidemics such as Argentina, Mexico and China.

Countries reclassified as upper-middle-income nations will also no longer be afforded a one-year grace period during which they would still have been eligible for support. China has an emerging HIV epidemic and would have been eligible for about $880 million in grant renewals, according to Aidspan's Global Fund Observer news service.

More stringent funding requirements - part of the Fund's new strategy after a high-level panel to review financial oversight - will now apply to Phase II applications of current grants. Money will be disbursed annually to countries qualifying for Phase II renewals, rather than the multi-year instalments originally envisioned as part of these renewals.

Economic realities

During 2011, several donors - including Sweden, Ireland and Germany - suspended funding to the Global Fund after media reports about grant mismanagement found by the Office of the Inspector General of the Global Fund. Spain made no pledges in 2011 and Italy has not been contributing to the Fund, according to Fund spokesperson, Marcella Rojo.

Nevertheless, Sweden resumed funding the Global Fund in early November 2011 and Germany announced on 23 November that it would pay its 2011 instalment, confirming its full pledge for 2012. Global Fund executive director Michel Kazatchkine noted that the percentage of countries fulfilling their stated commitments has been falling in recent years.

According to the Global Fund Observer, in 2009 almost 15 percent of donor pledges were not fulfilled. Last year, this percentage fell by another 10 percent.

MSF has called on the Fund and donors to immediately raise the resources necessary for emergency funding as well as more sustained financial support.

“Donors are really pulling the rug out from under people living with HIV/AIDS at precisely the time when we need to move full steam ahead and get life-saving treatment to more people," said Dr. Tido von Schoen-Angerer, executive director of MSF’s Access Campaign in a statement.

"All governments must chip in to the effort to curb HIV, but especially those with the capacity to really make a difference must urgently step up and support a new funding opportunity for countries by the Global Fund.”

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Theme (s): Care/Treatment - PlusNews, Economy, Health & Nutrition, HIV/AIDS (PlusNews),

[This report does not necessarily reflect the views of the United Nations]

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