A World Bank financing mechanism that was intended to help provide rapid funding to fight major disease outbreaks has often been slow in fulfilling that goal, according to news reports.
So-called “pandemic bonds” were created in the wake of the 2014-2016 Ebola outbreak in West Africa. Modeled on “catastrophe bonds” that pay out in response to insurance claims for events like hurricanes, pandemic bonds were designed to yield returns in the wake of infectious disease outbreaks. The World Bank sold $320 million worth of the bonds after the recent Ebola outbreak in the Democratic Republic of Congo, but an August 14, 2019 Bloomberg article noted that funds from bond sales are locked up by an arcane formula that may rarely be satisfied by actual real-world events, and which slows distribution of monies to countries facing outbreaks.
Olga Jonas, a senior fellow at the Harvard Global Health Institute, told Bloomberg that the initial sale of the bonds was surrounded by “a lot of hype” because the World Bank “wanted to announce a new initiative that would impress the world.”
Read the Bloomberg article: Investors Cash In on Ebola Bonds That Haven’t Paid Out