SOne for All
An Action Plan for
Financing Global
Vaccination andSustainable Growth
Embargoed until 12:01am ET
Wednesday, December 16, 2020

Foreword
There are moments in history that call for bold and unconventional steps. We are at such a moment right now.
To date, COVID has killed millions and undermined life
for billions. An insufficient and inequitable responseto the pandemic risks dividing the world in two.
Advanced economies, with fiscal and monetary stimulus and early access to vaccines, can hope to movebeyond the worst of the pandemic later this year.
Meanwhile, developing economies, with less fiscal
space and access to vaccines and future treatments,
may be mired in the pandemic for years.
Fortunately, the world has the means and the mechanisms to end this pandemic and assure a broad,equitable, and sustainable global recovery. It is imperative we come together now to take those steps to put
Covid-19 behind us and protect the most vulnerable
and the planet itself. Not doing so endangers us all.
Current vaccination plans and the funding behind them
are simply not enough to protect us all and instead,makes it more likely that unchecked, even more dangerous variants will emerge that know no borders.
With this action plan we focus on the most pressing
need – a financing strategy to stop the pandemic
by the end of 2022 by vaccinating up to 70 percent
of developing countries’ populations. In this paper,
we lay out the details for leveraging a large issuanceand reallocation of International Monetary Fund (IMF)
Special Drawing Rights (SDRs) to make this happen.
It is not enough to fully vaccinate the richest partsof the world. Vaccine nationalism is short sighted
and will ultimately leave everyone worse off. Afterall, vaccine-resistant variants that mutate in one
under-vaccinated country can quickly spread to one
that’s been immunized. Ending the pandemic for all isrequired for a global recovery.
But we cannot stop there. Covid-19 has delivereda once-in-a-century shock to global health, global
economic well-being, and global development. Alongwith the millions killed by the virus, we are seeing hundreds of millions being driven into poverty and further
reversals in the fights against hunger, bad health,gender equality, and more.
Therefore we are calling for something still larger and noless essential for our shared well-being and security –reinvigorated multilateralism that leverages the institutions
we have, foremost among them the IMF, the World Bank
(WB) and the multilateral development banks (MDBs), tofund a green and equitable recovery for the world.
We see this call to action as the right first step in aseries of urgent steps to realize a full global recovery
from the Covid-19 pandemic. In the coming months,
we will follow this document with additional detailedplans on operationalizing a comprehensive vaccination plan, fully realizing the potential of multilateraldevelopment banks, and engaging the private sector,
among other topics.
We are indebted to a wide array of experts and institutions in drafting this report. Their names can befound at the end of this paper. We may differ slightly
on some preferred approaches, but all share the samelevel of commitment and urgency for a shared global
response to this moment.
The world tumbled into the Covid-19 catastrophe
together, we must emerge from it together. As weenter the second year of the pandemic, this call toaction as well as the follow-on plans to come will offer
a roadmap for how we can do so and realize a moresustainable and equitable future for all.
Onward,Dr. Rajiv J. Shah,
President of
The Rockefeller Foundation

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Overview

1

2

ISSUE, REALLOCATE ANDINVEST SDRs TO ENSUREEQUITABLE GLOBAL ACCESSTO VACCINES

The ravages of the Covid-19 pandemic are well known.
Defeating and reversing them will require an immediate burst of revitalized multilateralism and creativity
operationalizing the financing tools and institutions
readily at hand. We must act swiftly to achieve a
global vaccination rate of up to 70 percent by theend of 2022. Delay threatens us all as new variants
emerge which could cause rolling outbreaks resulting in further economic shutdowns. This proposedplan imposes relatively little cost to donor nations inthe short-term, and will deliver significant economic
returns in the long-term.

3

UNLEASH FULLLENDING POWER OF
THE WORLD BANK AND
OTHER MDBs FOR A
CLIMATE-FRIENDLY AND
EQUITABLE RECOVERY

LEVERAGE PRIVATECAPITAL AT SCALE THROUGHNEW INVESTMENT VEHICLESJust as the entire world shared the spread and pain of
Covid-19, we must now share in orchestrating an end
to the pandemic and a transition to a recovery that isjust, equitable, sustainable and lasting. The pandemic
cannot be contained, and the rebuilding fully begun,
until the virus is halted in every country.

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TO THAT END, IN THIS ACTION PLAN WE PUTFORTH THREE MUTUALLY REINFORCING GOALSLEVERAGING THE POWER OF EXISTING
MULTILATERAL FINANCING ARCHITECTURE

Goal 1

Goal 3

IMF SDR

Innovative Finance

Issue, reallocate and leverage SDRs
to ensure equitable global access tovaccines

Leverage private capital at scale throughnew investment vehicles• Ensure that an issuance of $650 billion in Special
Drawing Rights by the IMF receives final approvaland is distributed as swiftly as possible• Encourage countries with unneeded and available
SDRs to reallocate no less than $100 billion of
their “excess” SDRs to the developing world• In addition to immediate relief provided by an SDR
allocation, direct at least $44 billion in reallocated
SDRs to the urgent need of scaling vaccine supply
to vaccinate up to 70 percent of the developingworld's population by the end of 2022

Goal 2
World Bank & Regional
Development Banks
Unleash full lending power of theWorld Bank and other
MDBs for a climate-friendly andequitable recovery• Marshal support within G7/G20 for a comprehen-• Establish and scale investment vehicles to mobi-

lize private capital and work alongside MDBs to set
in motion a broad based sustainable recovery andfinance clean growth and development in emerging markets

In the first installment of this plan, we focus on thesteps needed to mobilize funding to contain andsuppress the virus. An early SDR issuance and reallocation mechanism targeting pandemic response will
generate political momentum for achieving successahead of such gatherings at the G20 ministerial
meetings in July and the U.N. General Assembly in
September. Progress will then pave the way for more
efficient MDB and private sector engagement for a
climate neutral and equitable recovery in time for theWorld Bank meetings in October, the full G20 soonafter, and the U.N. Climate Change Conference of theParties (COP26) in December.
In future installments of this plan, we will expand on
the role we envisage for multilateral developmentbanks and the private sector. We recognize that
financing is one piece of the challenge of ensuring the
pandemic is stopped globally, and are committed toworking with public and private partners to develop acomprehensive implementation plan to complement
the financing solutions proposed herein.

sive package of reforms to unleash the potential
of MDBs, including a review of capital adequacy
ratios, starting with the World Bank—to free up
hundreds of billions of dollars to invest in a clean
and equitable recovery in developing economies
and emerging markets.

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A global recovery timeline

2021 POLITICALCALENDARWorld Bank
Spring Meetings

PROPOSEDACTIONS

April$650 billion
SDR allocationin progress

Biden Climate
Summit$650 billion SDR
allocation agreed
with modalities forreallocation

May

June

G7

Goal 1

Goal 1

Call for independent MDB capital
adequacy review
Goal 2July

G20 Climate &Energy Ministers
G20 Finance
Ministers$100 billion in reallocated SDRs forpandemic response

September

UNGA

OctoberWorld Bank
Fall meetings
G20

Goal 1

AugustCommission
MDB capital
adequacy
review

Goal 2Sign off on newcapital adequacy
approach for MDBs
Goal 2

November

New country
recovery plans

COP26
December

New blended
finance instruments

Goal 3

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Introduction
The pandemic has caused a devastating social andeconomic toll around the world. It has taken an estimated
2.6 million lives and left tens of millions jobless andmany more depleted of savings. The IMF estimates thatthe ongoing crisis will strip an estimated $11 trillion of
output by the end of this year.1 These impacts have hit
developing countries especially hard, because they lack
the resources of richer countries to shield populations
from the worst economic blows.
DEVELOPED
COUNTRIESIn response, the fifty largest economies announced
an estimated $14.6 trillion in fiscal spending in 2020,of which $1.9 trillion was for long-term economic
recovery.2 The U.S. alone has approved $6 trillion in
spending on domestic stimulus and relief. By contrast,
many developing countries have inadequate social
safety nets and limited fiscal space to respond to theimmediate crisis, much less position themselves for
future investment and growth. Sub-Saharan Africa’s
Covid-19-related fiscal support, for example, hasamounted to 3 percent of GDP, compared to about
24% percent of GDP for developed countries. 3

24%

OF GDP
SUB-SAHARAN
AFRICA

3%

OF GDPWe are seeing warnings now of an imminent “great
divergence,” in the words of IMF Managing Director
Kristalina Georgieva, as prospects for recovery
diverge dangerously across countries and regions in
the decade ahead. 4 On our current course, the pain of
the Covid-19 downturn will linger far longer in poorer
regions than they will in areas that are better off.
Reflecting that fear, the Conference of African
Ministers of Finance, Planning and Economic
Development in late March warned of depleted fiscal buffers and a “tidal wave of new coronavirus

FISCAL SUPPORT GAP

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infections” in the face of sluggish vaccine distribution.
“This is a crisis of the collective, which requires a collective and coordinated response,” the ministers said
in a joint statement. 5
This divergence in fortune has played out within countries, too, where the poor and vulnerable have beendisproportionately affected. In Washington D.C.,Black
Americans represent less than half the population
but nearly 80 percent of the Covid-19 deaths. 6 As of
mid-March, they had received fewer than a third of all
vaccines.7 Similar disparities are being seen all over
the world, for example in Brazil, where afro-descendants are at 150 percent increased risk of mortality
from Covid-19 compared to the population at large. 8
To compound these issues, global investment plansannounced in response to the pandemic thus far havefailed to adequately integrate Paris commitments
on climate action, a missed opportunity to ensure
increased spending facilitates a recovery that reduces
emissions rather than increasing them. The investments needed to support the transition to cleaner
forms of energy can stimulate global recovery, but
only 2.5 percent of total spending announced so
far is expected to enhance sustainability, 9 and CO2
emissions are now rebounding aggressively as some
economies recover.
This is no time for a retrenchment into unilateralism.
We need a new approach, crafted in coming weeks
and months and built around global sustainability, solidarity, equality and respect for the well-being of every
individual. Stimulating a widespread economic recovery will create positive spillovers in terms of reduced
emissions, increased trade and enhanced politicalstability, from which every country will benefit.

Given their scale and reach, the Bretton Woods
Institutions—the IMF and the World Bank—must beat the center of a much more robust international
response to stopping the pandemic and financing a
global recovery, one that will tap new reservoirs of
ingenuity, collaboration and pools of private capital,
and redefine the future of international assistance.
Financing from the World Bank, the IMF and regional
development banks, including mobilized private capital, needs to increase by $400-500 billion per annum,
against an estimated need of $2.5 trillion per annum,
over the recovery period in order to facilitate a broadbased and sustainable recovery in emerging anddeveloping countries. This can be achieved at minimal
cost to national budgets and will unleash massive
global benefits from which every global citizen will
benefit.
In this action plan, we call out the practical steps thatcan be taken by global leaders in the coming months
to galvanize a global recovery. In the first installmentof this plan, we prioritize the steps needed to mobilize
funding to contain and suppress the virus, focusedon a new SDR issuance. We touch upon the role ofthe MDBs and private sector with regards to a global
recovery, but will set out more concrete actions forthese actors in future iterations of this plan.
A new SDR issuance will bring immediate relief andstart to rebuild faith in multilateral cooperation,
setting the stage for a clean and equitable recovery.
Implementation will require much stronger coordination and commitment across the G7 and the G20 andthe development of a coherent plan for how we cantap this year’s calendar of major multilateral gatherings, culminating in the G20 in Rome and the COP26
in Glasgow.

But to turn the tide, we must first defeat the pandemic, not just within our own countries but
everywhere. Failure to do so will mean an increasein the development of variants that could prolong
the pandemic everywhere, squandering the trillions
already spent to buttress developed world economies
and beat back the pandemic at home. Therefore, themost urgent financing priority is to stop the virus in its
tracks everywhere.
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1

Goal 1
Leverage the new SDR
issuance to stop the virus
in its tracks
The surest, easiest and most obvious way to containthe pandemic and jump start a global recovery isthrough a new issuance of Special Drawing Rights by
the IMF. SDRs are an international reserve asset created by the IMF in 1969, which can be exchanged forfreely-usable currencies. The IMF Managing Director
can propose a new allocation of SDRs, which must be
supported by 85 percent of IMF members.
The advantages of doing so are clear:

It can be done swiftly, while thepandemic is still raging

A new allocation is “cost-free” fortreasuries of the world10

Excess or unneeded SDRs can bereallocated to meet pressing needs

As of the publication of this plan, IMF Executive
Directors have conveyed broad support to movetowards a $650 billion allocation of SDRs.11 A formal
proposal will be presented to the IMF Board in June.
This is a critical first step in providing countries withthe fiscal space required to support spending on
pandemic response in addition to strengthening theirbalance sheets. This move has the support of leading
finance ministers, including U.S. Treasury Secretary
Janet Yellen, whose support for an SDR issuancecomes with a requirement for increased transparency
on their deployment and utilization.12 From there,
excess SDRs must be reallocated from wealthy countries to finance pandemic response in the developingworld.

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A new SDR issuance
There is precedent for issuing SDRs in a time of crisis,
as the IMF responded in 2008/2009 with SDR issuances that totaled $260 billion to assist the global
economy. The tepid recovery from the last financial
crisis and the dramatic reduction in economic activity
driven by recent Covid-19 lockdowns, coupled withdebt issues in many countries, demands that the IMF
go bigger this time.

A Brief History of IMF SDRs

13

BILLION $THE PROPOSEDALLOCATION IS
THE LARGEST INHISTORY

First
Issuance
1972

17

BILLION $SecondIssuance
1981

A substantial IMF issuance will address multiple goals
simultaneously. It will provide an immediate injectionof balance sheet liquidity for the poorest countries,
who have had limited to no ability to provide domestic fiscal support during the worst of the pandemic.
An allocation of $650 billion worth of SDRs would
automatically yield almost $23 billion for the SubSaharan Africa region. That would immediately bolster
their reserves, improve their overall credit worthinessand free up additional funding for critically needed
domestic spending.

260

650

BILLION $BILLION $Third
Issuance
2009

Proposed
Issuance
2021

Notwithstanding the considerable benefits that willaccrue from a new SDR issuance, under the current
system, general allocations of SDRs must be distributed in proportion to IMF members’ quotas, not on thebasis of need. For this reason, the wealthiest countries
will receive around 67 percent of any new SDRs.13 The
UK alone, to take one example, would receive significantly more than the whole of the Sub-Saharan Africa
region. So-called “excess” SDRs will sit on the balance
sheets of wealthier countries and will do nothing for
pandemic response or to spur a global recovery.

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SDR allocation by region
TOTAL SHARE OF $650 BILLIONISSUANCE ($ BILLION)SDR ALLOCATION PER PERSON ($)$235 B$128 B

$313

$348
$42

$191 B
$33 B
$52 B

$25

$81
$11 B

$272

The cost of letting the virus spread
It makes no sense for these SDR allocations to sit on
the balance sheets of wealthier countries while thepandemic continues to rage, and global organizations
struggle to find proper funding for a global vaccine
rollout. Every country and its citizens will continue tobe threatened by Covid-19 until all countries achievea high level of vaccination. If the virus is allowed tospread in some countries with low vaccination rates,
it is likelier to mutate and generate variants, thus
bypassing the inoculation in highly-vaccinated countries. Current estimates say the world is 4 to 6 times
more likely to get a new variant from under-vaccinatednon-OECD countries as we are from fully protectedOECD countries.

The world can quite literally not afford to ignore thequestion of vaccine access in developing nations.
The costs of a such a global relapse would be enormous. A recent study from the National Bureau of
Economic Research shows that the economic cost of
not stamping out the virus globally will not be exclusive to only poor countries. “Up to 49 percent of theeconomic costs of the pandemic in 2021 will be borneby the advanced economies even if they achieve
universal vaccination in their own countries” thereport said.14 This is corroborated by research fromRAND Corporation, which found that the U.S. could
ultimately save $4.8 for each dollar it invests in global
Covid-19 vaccine supply.15

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Bridging the Pandemic Funding Gap
The world is making strides toward a widespread global
vaccination program, but much work remains to bedone to assure we hit the vaccination rates necessary
to protect lives and buttress our wider recovery efforts.
To start, a comprehensive, country-specific plan to end
the pandemic by the end of 2022 must be developed.
This needs to take into account the work of the Accessto Covid-19 Tools Accelerator (ACT-A) in addition toencompassing ongoing efforts by the African Unionand others to procure doses bilaterally.16 Countries
need additional funding to vaccinate populations,which involves costs related to additional community
health workers, training, data collection, and the setting up of vaccination sites able to reach widespread
populations.

Current plans under ACT-Accelerator and COVAX callfor distributing more than two billion vaccine dosesby the end of 2021 to achieve a vaccination rate of just
20 percent, far below what the world needs to reachherd immunity. This goal of 20 percent vaccination,
including all four pillars of the ACT‑Accelerator initiative referenced below, is expected to cost around $34
billion, of which donor nations, philanthropies andmultilateral institutions have so far put forward just
$12 billion, leaving a shortfall of $22.1 billion. MDBs
have also offered their own vaccination allocations,
including $12 billion from the World Bank.
The world needs to aim higher, with a goal of up to 70
percent vaccination in low- and middle-income countries by the end of 2022. The price of achieving 70
percent vaccination among lower- and middle-income
countries is in the region of $44 billion, considering
vaccine cost and distribution.

ACT-A funding gap per pillar$8.73 B
$7.23 B
$3.19 BVACCINES$2.95 B

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Share of $44 billion cost of vaccinations in COVAX eligible andupper middle-income countries
COVAX ELIGIBLE COUNTRIESUPPER MIDDLE-INCOME COUNTRIESThe cost for COVAX eligible countries is $28 billion,
with the remainder required to end the pandemic in
middle income countries.
Considering the vast sums spent so far on domestic
stimulus and pandemic suppression in developed
countries—$1.9 trillion in the most recent U.S. stimulus package alone—the sum needed for morecomprehensive immunization is minimal, especiallywhen weighed against the cost of another infection
surge. Still, this $44 billion is unlikely to come fromadditional commitments from donors, paving the way
for a creative use of SDRs.

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The Solution: Bridging the funding
gap with SDRs
The solution is for wealthier countries to commit tovoluntarily reallocating 17 no less than $100 billion of
their unneeded SDRs to provide further support to thedeveloping world, starting with immediate pandemic
response.
There are several plausible scenarios compatible
with reaching the $100 billion target depending on
the countries that contribute and the portion of their
allocation they are willing to recycle. $100 billion is anachievable target, but one that could also by surpassed with the support of the developed world.

Reallocation scenarios: Getting to $100 billion
SCENARIO 1

SCENARIO 2

SCENARIO 3

All IMF "Advanced Economies*"
excluding the U.S. commit toreallocating a portion of their
new SDR allocation

All IMF "Advanced Economies*"
including the U.S. commit toreallocating a portion of their
new SDR allocation

All IMF "Advanced Economies*"
including the U.S. and China
commit to reallocating a portionof their new SDR allocation

REALLOCATION REQUIRED TO
GET TO $100 BILLIONREALLOCATION REQUIRED TO
GET TO $100 BILLIONREALLOCATION REQUIRED TO
GET TO $100 BILLION

35%

25%

23%

JAPAN

UK

ITALY CAN ESPUNITED
STATESGERMANY
UNITED
KINGDOMFRANCEKOR

FRANCEUNITED
STATESITALY CAN ESP

UK

FRA
FR

IT

NED AUSITALY CAN ESP KOR
KOR

OTHER
ADVANCED

GER

JAPAN
GERMANYOTHER
NED ADVANCED
AUS

JAPAN
CHINA

NED
AUS

OTHER
ADVANCED*The IMF considers 35 economies to be "Advanced": Australia (AUS), Austria (AUT), Belgium (BEL), Canada (CAN), Cyprus (CYP), Czech
Republic (CZE), Denmark (DNK), Estonia (EST), Finland (FIN), France (FRA), Germany (GER), Greece (GRC), Iceland (ISL), Ireland (IRE), Israel(ISR), Italy (ITA), Japan (JAP), Korea, Rep. (KOR), Latvia (LVA), Lithuania (LTU), Luxembourg (LUX), Malta (MLT), Netherlands (NED), New Zealand(NZ), Norway (NOR), Portugal (PRT), San Marino (SMR), Singapore (SGP), Slovak Republic (SVK), Slovenia (SVN), Spain (ESP), Sweden (SWE),
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But how could recycled SDRs ultimately be directedto pandemic response? We provisionally consider thestrengths and overall viability of four proposals on thefollowing page, which merit further evaluation in themonths ahead by the IMF and other stakeholders. The
most suitable option will depend on the appetite for
institutional innovation amongst IMF shareholders,those who hold excess SDRs, and their willingness toconsider options external to the IMF.
While these options prioritize the use of reallocated
SDRs for pandemic response and specifically vaccine procurement, there are immediate opportunities
to utilize the IMF's Poverty Reduction Growth Trust(PRGT)* to increase its baseline support to low-income countries and the General Resources Accountto do the same for middle-income countries. The IMF
and its shareholders should aim to make use of thesefacilities as swiftly as possible. In all scenarios, appropriate governance structures must be put in place tocomplement existing expertise at the IMF and ensure
resources are ultimately deployed in line with countries pandemic response needs.

*The PRGT is the IMF’s concessional lending window
to support low-income countries.
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LEVERAGING THE PRGT

Leveraging an SDR Reallocation for Vaccine Procurement
INSTITUTIONALLY-ALIGNEDINSTITUTIONAL INNOVATION

Existing Window 18

New Window

Donors pledge a proportion of new SDR allocation to the
PRGT to fund loans from the Rapid Credit Facility (RCF) 19 .
Loan proceeds are then used by recipient countries to fundvaccine procurement through GAVI or a similar vehicle. Useof proceeds for pandemic response/vaccine procurement
potentially built into the risk evaluation of each loan.

Donors pledge proportion of new SDR allocation to a newly
established loan window under the PRGT specific to pandemic response.

Epidemic response was previously included in RCF loan
evaluation criteria (Ebola)
RCF loans are deployed in a single disbursement
RCF loans cannot be conditioned for a specific purpose
Absence of ex post review or enforcement
Need for additional grant funding to cover subsidy
accounts, current subsidy amounts could support
lending in excess of an estimated $5 billion
Lending caps under PRGT apply for all countries
Only 63 PRGT-eligible countries qualify (low income)
Shareholder support/alignment required to ensureswift implementation

LOOKING OUTSIDE OF THE IMF

SDR-Approved Institution
Donors pledge a proportion of new SDR allocation to an
IMF approved institution such as the World Bank. The
approved institution would then use the SDRs to obtain
fiat currency and enter into a loan facility with LIC/MIC
member. Loan proceeds could flow to GAVI or to LIC/MIC
under the condition that proceeds would fund pandemic
response/vaccinations.
16 approved institutions can hold SDRs
(e.g. World Bank IDA, African Development Bank)
Could support LICs and MICs
Repayment terms can be set by approved institution
Interest for these loans could be reduced close to zerowith small subsidy or after blending with resources of
the approved institution
Limited/no interest cost to the SDR lender as it would
continue to hold the right to the SDR
Uncertain timeline for design and approval of new program within the approved institution
Need for additional grant funding to cover subsidy tolower interest rate

New window could be designed around specific COVID
response needs of LICs and need for global vaccine
response
Repayment terms could be crafted to reduce shortterm burden
Design and approval timeline is uncertain
Need for additional grant funding to cover subsidy
accounts
Only 63 PRGT-eligible counties qualify (low income)Unclear what level of proscription would be possible
Shareholder support/alignment required to ensureswift implementation

New Dedicated Vehicle Engaging thePrivate Sector
SDRs could be used as a source of liquidity/repayment
for a dedicated financing vehicle focused on pandemic
response and vaccine procurement. For example, theprivate sector could work with MDBs on a bond issuancebuttressed by donor funding. Grants committed by donors
act as equity from which debt is raised from major financial
institutions ESG allocations. Funds raised via the issuancecould flow to LIC/MIC countries, with GAVI/other institutions as the core implementation partner, on terms similar
to those provided by the World Bank. SDRs, those madeavailable via the initial allocation and those reallocated,
and the balance sheet capacity they provide could then be
used as a source of loan repayment.
Effective at ensuring funding goes directly to vaccinations
Potential to build the right capabilities & leverage themost efficient deployment options
Leveraging the private sector (~4x leverage possible ondonor funding provided)
Terms for these loans could be on par with MDB lending
Uncertain approval timeline given role of private sector
Need for additional grant funding to cover equity backstop in the proposed bond issuance

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2

Goal 2
Encouraging multilateraldevelopment banks
to do more
Achieving a successful SDR issuance and leveraging reallocated SDRs for a comprehensive pandemic
response would reassert the value of global solidarityand generate political momentum for an equitable andclimate-focused recovery. From there, we must seek
to mobilize global investment in a more attractive,
lasting, and equitable form of development geared toconfront the existential threat of climate change.
This will require a globally coordinated program
anchored by more efficient MDB investment andprivate capital mobilization. The World Bank has said
it will offer $160 billion over 15 months to address the
economic downturn,20 but this is a fraction of what
World Bank itself says is needed.
In the immediate term, MDBs including the International
Bank for Reconstruction and Development (IBRD), theInter-American Development Bank (IDB), the European
Bank for Reconstruction and Development (EBRD), and
the Asian Development Bank (ADB) could use the available headroom they have reserved for times of crisis– this is, after all, a crisis without equal in decades. It is
possible to raise a far higher quantum of capital withoutburdening the exchequers of donor countries, primarily
through the reevaluation of the capital adequacy ratios,
including those utilized by the World Bank. Estimates
based on the methodology from one rating agency indicate that doing so could unleash more than $300 billion
in IBRD lending to middle-income countries where thevirus is hitting hardest and the benefits of climate-smart
investment will pack the most punch. This is not tomention the additional billions in IDA funding that could
be mobilized with a less conservative outlook on leverage ratios, all without imperiling the AAA rating of these
institutions.
Already there are discussions between the World Bankand shareholders around bringing forward an IDA replenishment this year. The World Bank is also finalizing a
Climate Change Action Plan for 2021 to 2025, whichaims to integrate climate mitigation more intrinsically intodevelopment strategies. The likely IDA replenishment,
and putative early replenishment of IBRD, needs to becomplemented with a revision of World Bank’s capital
adequacy rules. Doing so will enable donor funds to go
further, driving more impact. From the perspective ofsome donors, recapitalization conversations are also

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intrinsically linked to the need for clearer strategic alignment around Paris Agreement targets.21
The G7 is already contemplating a comprehensive viewof a package of interventions for the MDBs, inclusiveof fresh capital, balance sheet optimization and themobilization of private capital. We believe that as an
immediate step, the G20 Finance Ministers shouldcommission an external review of capital adequacy
rules at the World Bank and other MDBs, demonstrating
the leverage that is being left on the table. This could
set the stage for a G20 agreement on MDB reform in
November, freeing up resources to spur a climate-focused global recovery by the year’s end.
If the existing MDB system cannot implement the necessary reforms to meet the challenges of climate action andpandemic response, calls for financing options outside ofthese institutions will inevitably grow.

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3

Goal 3
The role of innovative
finance and the private sector
The public sector cannot do it alone and needs todouble down on its efforts to engage private capital,
specifically in the context of a global recovery. The roleof the private sector is often referred to as a potential
panacea when it comes to solving the world’s development challenges. A reference to the “SDGs” and the“SDG financing gap” is now a requirement of sorts inthe pitch books of impact and non-impact funds alike.
This represents tremendous progress, but the sector
longs for more action to back up the talk.
With investors searching for yield in the current low
interest rate environment and interest in ESG and
impact from investors of all stripes at an all-time high,the conditions are especially ripe to leverage ourpublic development finance engines to crowd in theprivate sector.

In our view, we need interventions that:

Address the immediate needs ofpandemic response and a recovery
that is equitable and climate focused

Are scalable and sustainable

Are in the market or can be brought
to market in 2021

This simple set of criteria can act as a guide as weseek to cut through the proliferating landscape of
blended finance funds and structures, providing aclear signal to diplomatic leaders on concrete ways tomove the needle on private capital mobilization overthe course of the year.
In the context of this action plan, we will prioritize
the role that MDBs, development finance institutions
and other public sector financing entities must playin facilitating the scaled participation of the private
sector in pandemic response and recovery. For
example, could the $8+ billion already committed
for vaccine finance have been leveraged with private
sector investment to solve the full $44 billion vaccination finance gap? Are there project preparation andde-risking structures that can pave the way for sustainable and resilience infrastructure investment thatenable us to meet the goals of the Paris Agreement
while increasing economic opportunity in developing
nations? The answer to both is yes, and with diplomatic leadership we can move past the rhetoric andfind creative new ways to solve these massive development challenges by mobilizing the funding required
to do so.

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The Path Ahead
A new SDR issuance will bring immediate relief andstart to rebuild faith in multilateral cooperation. A
swift SDR issuance and reallocation mechanism will
generate political momentum for achieving successand pave the way for more efficient MDB and private
sector engagement.

An independent external review of capital adequacy
rules should be called for by the G7 and commissioned by the G20 Finance Minister meeting in
July. Concrete options that have been stress-tested
against credit rating methodologies must then be
fed into the G20 International Financial Architecture
Working Group and be presented to the G20 leadersin October in Rome. Along with an ambitious WorldBank Climate Change Action Plan, an accelerated
IDA replenishment, the use of guarantees and othermechanisms to crowd in private finance at scale, thereis every reason to believe a climate-focused recovery could be set in motion by the end of the year.
New finance that could be directed to country-level
decarbonization plans and green recovery blueprints,
announced at COP26.

An SDR allocation is likely to be agreed to at the IMF
June Board meeting, following a period of consultation where the modalities of a reallocation can beconsidered in tandem. By mid-summer – possibly by
the Venice Climate IFI Summit July 11 – it is feasiblethat new capital could be unleashed for pandemic
response. These timelines should be accelerated inevery way possible.

A global recovery timeline

2021 POLITICALCALENDARWorld Bank
Spring Meetings

G7
G20 Climate &Energy Ministers
G20 Finance
Ministers

Biden Climate
SummitPROPOSEDACTIONS

April$650 billion SDR
allocation inprogress
GOAL 1

May

UNGA

June

July

AugustWorld Bank
Fall meetings

September$650 billion SDR$100 billion
allocation agreed in reallocatedwith modalities
SDRs for panfor reallocation demic response
GOAL 1
GOAL 1
Call for independent MDB capital
adequacy review
GOAL 2

G20

Commission MDB
capital adequacy
review
GOAL 2October

COP26

November

DecemberSign off on newcapital adequacy
approach for MDBs
GOAL 2
New country
recovery plans
New blended
finance instruments
GOAL 3

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Contributors

The Rockefeller Foundation is
grateful to the following people
who have contributed to this plan.
Some may differ with aspects ofit, or have stressed other mattersof primary focus. All have contributed with the greatest senseof shared purpose at this time ofglobal need.

The Rt. Hon. Gordon Brown
UN Special Envoy for
Global Education
Amar Bhattacharya
Senior Fellow
Brookings Institution
Sundaa Bridgett-JonesManaging Director,
Policy & Coalition
The Rockefeller Foundation
Dr. Rick BrightSenior Vice President, Pandemic
Prevention and Response
The Rockefeller Foundation
Dr. Joe Curtin
Director, Power & Climate
The Rockefeller Foundation
John Delaney
Executive Chairman
Alliance Partners
Jamie Drummond
Co-Founder, ONE Campaign
Global Strategist,
Sharing Strategies
Vishal Gujadhur
Deputy Director,
Development Policy and FinanceBill & Melinda Gates Foundation
Mike Hugman
Director, Climate FinanceChildren’s Investment FundFoundation
Claire Healy
Director
E3G

Neil King
Writer, Former Global
Economics Editor
The Wall Street JournalDavid McNair
Executive Director, Global Policy
ONE Campaign
Mike Muldoon
Managing Director, Innovative Finance
The Rockefeller Foundation
Ronin Palmer
Associate Director
E3GMark Plant
Senior Policy Fellow
Center for Global Development
Professor Jeffrey Sachs
Chair, Lancet COVID-19 Commission
President, U.N. Sustainable
Development Solutions Network
Dr. Rajiv J. Shah
President
The Rockefeller Foundation
Lord Nicholas Stern
Professor
London School of Economics
Margie SullivanCEO
Sullivan Strategies
Sylvia Warren
Associate Partner
Dalberg Advisors
Kiran Willmot
Senior Project Manager
Dalberg Advisors
Design: AHOY Studios

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Sources1

https://www.imf.org/en/News/Articles/2020/10/15/
sp101520-a-new-bretton-woods-moment2

https://www.unep.org/resources/publication/are-we-buildingback-better-evidence-2020-and-pathways-inclusive-green

3

https://blogs.imf.org/2020/10/22/
sub-saharan-africas-difficult-road-to-recovery/

4

https://blogs.imf.org/2021/02/24/the-great-divergence-a-forkin-the-road-for-the-global-economy/

5

https://www.uneca.org/stories/african-finance-ministers%E2%80%99-meeting-opens-with-focus-on-special-drawing-rights%2C

6

https://coronavirus.dc.gov/data/vaccination

7

https://www.kff.org/coronavirus-covid-19/issue-brief/
latest-data-on-covid-19-vaccinations-race-ethnicity/

8

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7878714/

9https://wedocs.unep.org/bitstream/handle/20.500.11822/35281/AWBBB.pdf

18 The PRGT is the IMF’s concessional lending window to support
low-income countries. Financial support under PRGT facilities isprovided on concessional terms, with interest rates currently atzero percent. Resources are secured through lending agreements at market interest rates between member countries andthe Poverty Reduction and Growth Trust (PRGT) that are subsequently on-lent to eligible LICs under the various concessional
windows. The subsidies needed to provide zero interest rates
come from the PRGT, which is administered by the IMF andoperates on a self-sustaining basis.
19 The RCF, one of four windows under the PRGT, provides rapid
concessional financial assistance with limited conditionality
to low-income countries (LICs) facing an urgent balance of
payments need.
20 https://www.worldbank.org/en/news/
press-release/2020/04/02/world-bank-group-launches-first-operations-for-covid-19-coronavirus-emergency-health-support-strengthening-developing-country-responses
21 https://www.reuters.com/article/
us-world-bank-climate-exclusive-idUSKBN2AQ32P

10 The allocation of SDRs is 'cost free' for all members because
charges and interest net out to zero if the countries do not use
their SDR allocations. The use of SDRs is not ‘cost free’. The
use of SDRs occurs when a country reduces its SDR holdingsvis-à-vis its cumulative SDR allocation: https://www.imf.org/en/
About/FAQ/special-drawing-right#Q6.%20Is%20an%20SDR%20
allocation%20cost-free?
11 https://www.imf.org/en/News/Articles/2021/03/23/
pr2177-imf-execdir-discuss-new-sdr-allocation-us-650b-boostreserves-help-global-recovery-covid19
12 https://finance.yahoo.com/news/1-yellen-supports-allocation-imfs-143104284.html
13 https://www.cgdev.org/publication/making-imfs-special-drawing-rights-work-covid-19-economic-relief
14 https://www.nber.org/system/files/working_papers/w28395/
w28395.pdf
15 https://www.reuters.com/article/
uk-health-coronavirus-j-j-vaccine-idUSKBN2BL1V4
16 https://www.reuters.com/article/
uk-health-coronavirus-j-j-vaccine-idUSKBN2BL1V4
17 As permitted under current decisions of the IMF Executive Board:
https://www.imf.org/en/About/FAQ/special-drawing-right#Q6.%20
Is%20an%20SDR%20allocation%20cost-free?

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S

rockefellerfoundation.org
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