When it comes to health in the developing world, timing is everything. A few scant hours can make the difference between a child being successfully treated for malaria and becoming a statistic. According to the World Health Organization, a child dies every minute from the mosquito-borne disease. It's with this fact in mind that innovative approaches from the private sector -- particularly the realm of finance -- are now being applied to global health in an effort to speed the delivery of life-saving prevention and treatment to Africa.
One such project is called "NetGuarantee." The "Net" in question is a long-lasting insecticidal mosquito net, the kind being distributed by the tens of millions across Africa to prevent malaria. Mosquito nets are one of the principal drivers of the dramatic 33 percent decline in malaria deaths on the African continent since 2004. The challenge is getting them to families before the rainy seasons that inevitably bring stagnant water, mosquitoes, and the malaria that they transmit. That's where the "Guarantee" in NetGuarantee comes in. Drawing from the playbook of finance, NetGuarantee is accelerating the delivery of mosquito nets to beat the rains and protect families up to six months faster than is otherwise possible. But to understand how this works, you have to know a little bit about the way funds flow in global health.
Large-scale distributions of mosquito nets (and other health commodities) in developing countries are made possible by funding from organizations like the World Bank and the Global Fund to Fight AIDS, Tuberculosis and Malaria, which have provided billions of dollars in loans and grants over the past decade to empower developing countries to take responsibility for their public health programs. And they've saved millions of lives in the process. But grants from these institutions are awarded based on performance, which means that countries must demonstrate results against defined targets in order to receive funding. While this accountability ensures that funds are disbursed where they can be most effective, it makes applying for these grants a time-intensive process. The proposal process to finance disease-fighting tools like mosquito nets can take more than a year, and only after funds are disbursed can a country typically start ordering the nets and having them manufactured, shipped and delivered. In all, 18 months or more can pass from application to net distribution.
Challenges like this are common in private sector manufacturing -- but so are solutions. In the private sector, a manufacturer can buy a type of insurance that guarantees payment so that production can start earlier. NetGuarantee uses collateral from forward-thinking foundations and private sector partners to apply this same bit of Wall Street wizardry to global health. Take the example of Mozambique, where NetGuarantee executed its inaugural transaction. In November 2009, the Global Fund gave preliminary approval to a grant proposal from Mozambique, which included funding for nearly 2 million mosquito nets.
NetGuarantee worked with insurance company Zurich Financial Services to offer mosquito net manufacturers a policy guaranteeing payment for 250,000 of the mosquito nets to be covered by the Global Fund's expected grant. Goldman Sachs Gives, the Betsy and Jesse Fink Foundation, and others provided collateral to mitigate the insurer's losses in the event that the grant was reduced or delayed, and the Bill and Melinda Gates Foundation and ExxonMobil supported the entire program with operational funds.
The net effect? In Mozambique, mosquito net production began a full seven months before the funds were disbursed, and the nets were ready and waiting to be shipped the day the funds were available to the country. NetGuarantee-supported nets reached Mozambique in November 2011, and were quickly distributed to areas of the country hardest hit by malaria, just in time for the peak malaria transmission period. NetGuarantee estimates that over 54,000 malaria cases were averted and up to 227 lives were saved as a result of this one deal. And these benefits came at no additional cost to Mozambique -- the mosquito net manufacturer was responsible for paying 100 percent of the policy premium.
NetGuarantee isn't alone. The United Nations Foundation's Pledge Guarantee for Health (PGH) recently partnered with a donor and public and private institutions to ensure that 800,000 mosquito nets arrived in Zambia months ahead of schedule. While these numbers are still relatively modest in the scheme of a massive global disease like malaria, they point to the enormous potential of this innovative approach. What is now being done for mosquito nets can also be done for medicines, diagnostic tests... you name it. And as private sector institutions become more experienced at assessing the risks of these types of deals, they'll be able to do them faster and more cheaply. Ultimately, private sector institutions should be able to step in and take the lead, making organizations like NetGuarantee obsolete. And that's when we'll know we've succeeded.
Malaria No More is the parent company of NetGuarantee LLC. Malaria No More is determined to end malaria deaths, for more information, visit www.MalariaNoMore.org.