Bond to raise $4bn for vaccines

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The Independent Online

An innovative bond to raise up to $4bn (£2.1bn) to save the lives of five million children through vaccinations will be launched next month, funded by the UK and seven other countries.

The scheme, proposed by Gordon Brown, seeks to front-load aid commitments by governments to in effect underwrite the long-term loans to fund immunisations over a decade.

The first tranche of the bonds, which will be managed by the World Bank, will be launched on 12 October and aims to raise $750m to $1bn depending on demand, the Treasury said.

Goldman Sachs and Deutsche Bank are currently marketing the bond. The Treasury had hoped to issue the first tranche in April but the launch was delayed to seek commitments from governments.

Yesterday Mr Brown said seven other countries - France, Italy, Spain, Sweden, Norway, Brazil and South Africa - had pledged also to make payments to fund the repayment.

The Chancellor hopes that should the bond be taken by investors at a reasonable interest rate, it will open the door for other similar projects, known as advance market commitments. He said they would accelerate the development and availability of priority new vaccines against diseases such as malaria, TB, Aids and pneumococcus that kill millions of people in developing countries each year.

In March the Treasury said the UK had pledged an annual average contribution of $130m (£69m) a year for 20 years. France has pledged an annual average of $100m a year over the same period. Italy has pledged an annual average of $30m and Spain $12m a year - both for 20 years. Sweden and Norway have each made a total pledge of $27m and Brazil has made a total pledge of $20m.