Glossary

(under construction)

BLENDED FINANCE

The strategic use of public funds to attract additional investment by the private sector. It has been part of a wider search for innovative finance. The creation of blended finance instruments in global health is driven by development banks, private foundations, public-private partnerships, and business-friendly policy-makers.

Global health has long been a testing ground for blended finance instruments. Here, some of the first development bonds were brought to market in 2006, with the creation of the International Finance Facility for Immunisation (IFFIm). Another form of blended finance mechanism is ‘matching funds’, in which private sector donations are matched by contributions from public donors. Lastly, subsidies known as advanced market commitments – donor pledges to buy future commodities with public finance – were first implemented in global health and have been used to finance vaccine development.

PUBLIC-PRIVATE PARTNERSHIPS (PPPs)

Agreements that divide costs, risks and decision-making power between public and private actors to provide a public service. They have recently become a dominant institutional form in the financing and implementation of large-scale infrastructure projects, including the construction and running of public hospitals.

PPPs typically involve governments providing guarantees to private investors to cover risks associated with revenue shortfalls, demand fluctuations, or regulatory change. Private investors provide loans, while a suite of private construction and service companies are engaged to build and maintain the infrastructure. In the past decades, PPPs have also become a dominant mode of multilateral health governance, following the creation of Gavi, the Global Fund and CEPI.