Published on 23 August 2019

SUSTAINABLE FINANCE

Ebola Outbreak: the World Bank fails to release funds to fight the epidemic

As the Ebola outbreak spreads through the Democratic Republic of Congo (DRC), questions have been raised concerning the World Bank’s ability to release the emergency funds raised on the bond market that were specifically created to prevent such pandemics.

Epidemie Ebola OMS
An Ebola outbreak is underway in the Democratic Republic of Congo, but funds to combat its spread have not been released.
@WHO

More than 1,800 people have died this year as a result of the Ebola epidemic that hit eastern Democratic Republic of Congo (DRC) and threatens to spread to larger cities. However, the World Bank continues to pay sizable interest to investors subscribed to its "pandemic bonds,'' which are funds dedicated to financing emergency response operations.

The lack of available funds puts limits on the rapid containment of this deadly epidemic. The Pandemic Emergency Financing Facility (PEF), launched by the International Bank for Reconstruction and Development (IBRD) in 2017, was created to address this issue through funding based on "pandemic bonds". These bonds offer a very high return due to the risk of total capital loss in the event of an epidemic involving six deadly viruses, including SARS and Ebola.

A situation that’s not "serious enough"

So far, the PEF has only released $20 million from its liquidity reserve to respond to the situation in the DRC. According to information from the Financial Times, most of the funds remain blocked (approximately $150 million) because primary criteria have not been met. Indeed, there must be at least 20 victims in a second country to engage use of the bulk of "pandemic bonds". The meticulous quarantine work undertaken in the field therefore contributes to difficulties in financing operations.

On July 24th, the World Bank announced $300 million in additional funding dedicated to Ebola emergency response in the DRC. At the same time, according to Foreign Policy magazine, the World Health Organization (WHO) has cut into other programs to fund emergency operations. Money from Ebola Bonds continues to arrive slowly.

Paul Kielwasser


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