The World Bank’s Bid to Aid Ebola Prone Countries has Strict Conditions

Since 2017, the World Bank has been issuing “pandemic bonds,” which use private investment to help developing nations tackle outbreaks of infectious diseases. The particular bond that covers Ebola, among other diseases, pays investors a coupon of 11.1 percent over Libor, funded by donor nations Japan and Germany. Since the first case of Ebola in August last year, almost 1,400 people out of 2,000 infected have died in eastern Congo, a region with rich mineral deposits but one of the poorest countries in the world, according to the UN. But that doesn’t mean they get the aid money. Despite thousands of deaths in Congo, the bonds will only benefit affected nations once they jump international borders and a positive rate of growth of the outbreak is confirmed, according to a person familiar with the bonds. Then and only then would the Washington-headquartered World Bank pay $90 million to help both governments and international aid responders tackle the crisis. Additionally, since their introduction, pandemic bonds have yet to pay out to affected nations. In February, the development bank gave the DRC $80 million in grants to help finance responses for the Ebola outbreak. But the bank’s readiness to allow the death toll to rise, before paying out fully on the insurance element of the facility, is likely to fuel criticism over the deal’s structure. If the bonds mature without paying out, investors get their money back, plus the chunky coupons.SOURCE: OZY

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