The Global Fund to Fight HIV, TB and Malaria has more than halved the estimated amount of money available in its next round of funding, the disbursement of which has been delayed until 2013, due to the world economic crisis.
The delay in Round 11 funding was announced at the Fund's latest board meeting on 26 September, the second such delay, which has pushed the application deadline back to at least 1 March 2012.
The size of the pot has also shrunk - to US$800 million, less than half of the $1.5 billion projected for the round as of mid-2011, according to Christoph Benn, director of the Fund's external relations and partnerships.
More than 70 percent of antiretroviral drugs in the developing world are funded by the Global Fund and in Africa, it finances about 85 percent of TB programming, according to Stop TB director, Mario Raviglione. Reductions in Global Fund money and international global health funding are likely to reverse recent gains in the fight against TB and increase mortality, he cautioned.
"A postponement of rounds at the Global Fund and decline in international funding will have dramatic consequences in the attempt to respond to the multidrug resistant TB epidemic and that's where the funding gap is greatest," he told IRIN/PlusNews.
In 2009, the Fund's Office of the Inspector General began uncovering fraud among recipients in countries such as Mali, Mauritania and Zambia. As a consequence of this and negative reports by international media, which Benn said exaggerated the extent of fraud, donors, including Germany, Ireland and Sweden, suspended funding to the Fund.
The Global Fund then instituted a panel to review financial oversight. Its findings and recommendations were released in late September 2011. Sweden has subsequently released its 2011 contribution and pledged a further $300 million until 2013. Benn said possible shortcomings in Round 11 were not due to donors backing out of commitments, despite speculation.
"This is not about any donor announcing [cutbacks] but our estimates have to take into account that many budgets, particularly in the Euro zone, Japan and the United States, are under much more stress than before," he told IRIN/PlusNews. "We have to be a bit more careful in projections for the future."
Addressing financial risk
The Global Fund will present a comprehensive response to the high level report at its next board meeting in Accra, Ghana, on 21 November, after which it expects more donors to resume funding, Benn said.
While more details will be known after the meeting, he added that changes were afoot to reduce the Fund's financial risk - the overarching message of the review's recommendations.
"Before, we basically gave every country the benefit of the doubt and treated them equally. In an emergency situation, like the one in which the Fund was created, this was probably an appropriate approach to do what needed to be done to get drugs out as quickly as possible," Benn said. "[The review] told us that while that was very noble, we have to have different criteria, more financial controls in some countries than in others. You have to invest more in controls, you have to change the way you manage risk."
Countries can expect to see longer periods between rounds as the body moves to a review-recommended, two-step application process. Countries will now submit concept papers, which will receive feedback from the Fund, before submitting applications. According to Benn, this may help countries increase their chances of successful submissions.
Civil society programmes
But competition for Global Fund grants will increase as the Fund moves to prioritize interventions that can be shown to be cost-effective - criteria that might disadvantage community-based activities that often lack technical monitoring and evaluation capacity, according to Stop TB Partnership executive director, Lucica Ditiu.
Civil society interventions are particularly at risk and Ditiu called these kind of community-based programmes easy cuts for countries that may be looking to slim down funding requests. The same may also be true for behaviour change communication, for which cost-effectiveness and technical evaluations are often not funded as part of projects.
In Malawi, the Global Fund accounts for two-thirds of the HIV response and the balance comes from donors, including the US, UK and European countries. While the country is assured of Global Fund money until about June 2014, it is already looking at how to ensure the sustainability of national TB and HIV programmes, according to UNAIDS country coordinator Patrick Brenny.
"One would be foolish to expect these donors to substantially increase funding in the current economic climate; we'll be lucky if current levels are sustained." Brenny told IRIN/PlusNews. "Malawi has begun... to look at both the programmatic as well as the financial long-term sustainability of their national response including innovative financing mechanisms."
As part of this, some programme interventions will inevitably be cut in favour of those that have proven to be more effective, he added.
The newly revised estimates for Round 11 also take into account the emergency funding that as many as 10 countries, many in Africa, will need to continue what the Fund terms "life saving" interventions until the Round 11 2013 disbursement, according to Benn.
The Fund's continuation of services policy provides this kind of emergency funding for previous Global Fund recipients to continue providing essential medicines such as HIV and TB treatment for up to two years in the event that countries lose funding due to unsuccessful applications or, more recently, allegations of fraud.