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P 141306Z DEC 09
FM AMEMBASSY ADDIS ABABA
TO RUEHC/SECSTATE WASHDC PRIORITY 7142
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RUEATRS/DEPT OF TREASURY WASHINGTON DC

UNCLAS SECTION 01 OF 03 ADDIS ABABA 002926 
 
 
SIPDIS 
 
DEPARTMENT FOR AF/SPG AND AF/RSA 
LONDON, PARIS, ROME FOR AFRICA WATCHER 
 
E.O. 12958: N/A 
TAGS: KHIV EAID TBIO ET
SUBJECT: REPORT OF 20TH GLOBAL FUND BOARD MEETING NOV 9-11, 2009 
 
SUMMARY 
------- 
 
¶1.   The Global Fund to Fight AIDS, Tuberculosis (TB), and Malaria 
(Global Fund) held its 20th Board meeting on November 9-11, 2009, in 
Addis Ababa, Ethiopia.  The U.S. government (USG) holds a permanent 
seat on the Global Fund Board and works through the Board to make 
funding decisions and provide strategic direction to the Global 
Fund.  With USG support, the Global Fund Board approved $2.38 
billion of new grants to fight AIDS, TB, and malaria; took steps to 
enhance the engagement of implementing countries in Global Fund 
governance; approved changes in the Global Fund grant architecture 
designed to simplify the grant architecture and encourage a more 
holistic, program-based approach at the country level; and agreed to 
explore the possibility of a joint funding platform for health 
systems strengthening (HSS) with the Global Alliance for Vaccines 
and Immunizations (GAVI) and the World Bank.  The U.S. was 
represented by an interagency delegation led by the USG Board Member 
Ambassador Eric Goosby (U.S. Global AIDS Coordinator, Department of 
State), Alternate Board Member John Monahan (Interim Director, 
Office of Global Health Affairs, Department of Health and Human 
Services), and Adm. Tim Ziemer (Coordinator, President's Malaria 
Initiative, USAID).  End summary. 
 
¶2.  Background.  The Global Fund is a public-private financing 
mechanism established to mobilize and distribute resources to combat 
AIDS, TB, and malaria worldwide.  The USG strongly supports the 
Global Fund as an essential component of our overall response to 
these three diseases.  The USG is the largest single donor to the 
Global Fund, having contributed approximately $3.5 billion since 
2002 and pledged an additional contribution of $1 billion in FY 
¶2009.  To date, the Global Fund Board has approved $18.4 billion in 
grants to 144 countries, supporting country-led efforts to provide 
HIV/AIDS treatment for over 2.3 million people, provide TB treatment 
for 5.4 million people, and distribute 88 million bednets for 
malaria prevention. 
 
Board Dynamics 
-------------- 
 
¶3.  The 20th Board meeting was chaired by the Ethiopian Minister of 
Health Tedros Adhanom Ghebreyesus and vice-chaired by Canadian 
International Development Agency (CIDA) Health and Education 
Director-General Ernest Loevinsohn.  Both were elected to these 
positions in mid-2009 for two-year terms; this was their first Board 
 meeting serving as Board Chair and Vice-Chair.  Minister Tedros has 
proved a capable chair in other international settings and, while 
new to the Global Fund Board, has a strong interest in the Global 
Fund's success.  Ethiopia is the largest recipient of Global Fund 
grant resources, with $1.335 billion in approved funding to date. 
 
 
¶4.  The 20th Board meeting ran smoothly, with delegations from both 
the donor and implementing blocs working together constructively on 
key governance and funding decisions.  Nevertheless, there was a 
general sense, particularly among the donor bloc, that the Board did 
not fully address increasingly critical strategic issues around 
resource mobilization, allocation of resources, and grant 
performance and management.  The Board decided to hold a retreat in 
January or February 2010 to address these issues in more depth.  The 
donor bloc also agreed to reinvigorate an informal, intersessional 
donor consultation process.  Mr. Loevinsohn offered to continue 
coordinating the donor consultation process in the near term. 
 
Funding Decisions 
----------------- 
 
¶5.  The Global Fund operates under a demand-driven model and the 
Board approves grants based on technical merit, as assessed by an 
independent Technical Review Panel (TRP).  To date, the Board has 
approved every technically sound grant recommended for funding by 
the TRP.  However, for the second funding cycle in a row, the Board 
was faced with a significant gap between the TRP-recommended ceiling 
and available resources.  In preparation for the 20th Board meeting, 
the USG worked through a Working Group of the Board to identify ways 
to manage this tension between supply and demand.  The Working Group 
developed a number of cost-savings recommendations, including an 
across-the-board budget cut of 10% for all Round 9 and NSA 
proposals, discontinuation of the Rolling Continuation Funding 
channel, and adoption of two-phase funding decisions for approved 
grants such that the financial impact of the grant approvals is 
spread more evenly across the grant lifecycle.  The Global Fund 
Board approved all of these cost-saving measures, allowing it to 
approve, in principle, all TRP-recommended grant proposals.  The 
Board also endorsed the broad lines of thinking contained in the 
Working Group's report around resource mobilization and managing 
demand over the longer term.  The Board agreed to continue 
 
ADDIS ABAB 00002926  002 OF 003 
 
 
discussions on these topics on an urgent basis, including through a 
Board retreat to be held in early 2011. 
 
¶6.  The Board approved $2.38 billion in new grants under Round 9 and 
two pilot initiatives - the National Strategy Application (NSA) 
funding channel and the Affordable Medicines Facility for malaria 
(AMFm).  The full list of approved and rejected grants is available 
online at  www.theglobalfund.org /en/funding decisions. 
¶7.  The Board approved funding for 90 Round 9 grant proposals in 69 
countries, including two countries that had not previously received 
Global Fund grants (Mexico and Turkmenistan), five NSA proposals, 
and ten AMFm proposals. 
 
¶8.  The Board approved funding for five of seven NSA proposals: 
China (malaria), Madagascar (malaria), Nepal (tuberculosis), and 
Rwanda (HIV/AIDS and tuberculosis).  The NSA funding channel is a 
pilot initiative that allows countries to use their existing 
national disease strategy as the basis of a funding request.  The 
TRP did not recommend, and thus the Board did not approve, the two 
remaining NSA proposals (Kenya and Malawi, both for HIV/AIDS).  Both 
Kenya and Malawi have been afforded the opportunity to appeal the 
TRP recommendation through the usual appeals process, which requires 
applicants to demonstrate the TRP made a "significant and obvious 
error" in its technical review. 
 
¶9.  The Board also approved AMFm proposals in nine African countries 
and Cambodia.  The AMFm funding channel is a pilot initiative aimed 
at expanding access to, and affordability and use of, 
artemisinin-based combination therapies (ACTs).  In approving the 
AMFm proposals, the Board also clarified its intent that the Global 
Fund will only expand beyond a pilot program based on evidence that 
the initiative is likely to achieve its stated goals.  The Board 
requested the AMFm Ad Hoc Committee to make a recommendation, based 
on an independent evaluation of the pilot phase, to the Board at its 
first meeting in 2012 on whether to expand, accelerate, modify, or 
terminate the AMFm business line. 
 
¶10.  The Board also approved, on an exceptional basis, the extension 
of a Global Fund Round 3 grant in Russia focused on HIV/AIDS 
prevention among highly vulnerable groups, including intravenous 
drug users, sex workers, men who have sex with men, street children, 
migrants, and prisoners; the decision approved $24 million over two 
years for this work. The Board stressed the extraordinary nature of 
this decision, noting that while Russia is not currently eligible 
for Global Fund funding under its income eligibility criteria, these 
eligibility criteria are under review and may be revised in 2010 to 
allow the Global Fund to continue support for particularly 
vulnerable populations in countries that might otherwise be 
ineligible for funding based on income levels.  In approving the 
extension of the prevention program, the Global Fund Board urged the 
government of the Russian Federation to expand investment in 
life-saving, evidence-based prevention services for vulnerable 
populations.  (Comment:  The Government of the Russian Federation is 
transitioning from Global Fund recipient to donor and has 
contributed more than $225 million to the Global Fund.  The Russian 
Federation has accepted financial responsibility for most of the 
HIV/AIDS programs previously supported by Global Fund financing, but 
has chosen not to provide continued funding for Round 3 prevention 
program.  The Global Fund Secretariat and international partners 
have tried without success to persuade the Russian government to 
provide financial support for this program.  The key stumbling block 
appears to be lack of political will within the Russian government, 
rather than resource constraints.  At the same time, key bilateral 
donors including the USG are scaling back their HIV/AIDS programs in 
Russia and do not currently have sufficient resources to pick up 
these services in the near term.  End Comment.) 
 
Launch of Round 10 
------------------ 
 
¶11.  The decision around the timing and scope of Round 10 was one of 
the most heavily negotiated decisions at the 20th Board meeting. 
Given the large unmet need for services in all three disease areas, 
there was broad support among all delegations for ensuring continued 
access to Global Fund financing through new grant rounds and for 
transitioning to the new grant architecture as quickly as possible. 
However, there were different perspectives on how quickly to move 
forward with launching a new call for proposals given the time 
needed to operationalize the new grant architecture and current 
resource constraints.  Ultimately, the Board agreed to hold a 
retreat in January or early February 2010 to address key strategic 
issues such as prioritization of funding amongst grant proposals, 
the Global Fund's operating model, and implementation of the new 
grant architecture.  The Board further agreed to launch Round 10 on 
or about May 1, 2010, with funding decisions to be made between 
November 2010 and January 2011, with the launch of Round 10 to be 
confirmed at its 21st Board meeting, based primarily on progress in 
 
ADDIS ABAB 00002926  003 OF 003 
 
 
incorporating the new grant architecture. 
 
Support for Implementing Partners 
--------------------------------- 
 
¶12.  In recognition of the critical role of implementing countries 
and partners in the Global Fund governance processes, the Board 
approved two decisions aimed at enhancing their participation.  The 
Board approved financial support of up to $800,000 annually for 
intra-constituency communications, coordination and participation in 
Global Fund meetings.  The Board also approved increased translation 
and interpretation services, limited initially to two languages in 
addition to English. 
 
Grant Architecture Reform 
------------------------- 
 
¶13.  The Board approved changes to its grant architecture designed 
to simplify management of Global Fund financing and encourage 
greater alignment between grant proposals and national disease 
strategies.  The new grant architecture is based on "one stream of 
funding per Principal Recipient per disease" and aims to reduce the 
reporting burden on implementing countries by consolidating grant 
proposals and reporting cycles.  The Board and its committees will 
continue to provide oversight and direction to the Global Fund 
Secretariat as it refines and rolls out the new grant architecture. 
 
 
Health Systems Strengthening (HSS) 
---------------------------------- 
 
¶14.  The Board approved a decision point requesting the Secretariat 
to explore the operational, financial, and policy implications of a 
potential joint HSS funding and programming platform with GAVI and 
the World Bank.  The Board emphasized the importance of close 
consultation with the Board's Policy and Strategy Committee and 
requested the Secretariat to present a proposal to this committee on 
how a joint HSS platform could be operationalized and funded, for 
consideration and recommendation to the Board at its 21st Meeting in 
early 2010. 
 
Other Decisions 
--------------- 
 
¶15.  The Board adopted a number of additional decisions on issues 
such as the 2010 Operating Expenses budget, quality assurance for 
pharmaceutical products, the Global Fund's partnership strategy, 
risk management framework, and support for the Office of the 
Inspector General.  The full text of all decisions taken at the 20th 
Board meeting is available online at www.theglobalfund.org 
/documents/board/20 /GF-BM20-DecisionPoints_en.pdf.  A report 
containing USG positions on each Board decision will be posted on 
www.pepfar.gov. 
 
Next Meeting 
------------ 
 
¶16.  The Global Fund Board will hold a retreat in early 2010 to 
discuss key strategic issues.  Global Fund Board retreats are 
typically restricted to Board Members and Alternates in order to 
facilitate open, frank discussions.  The Board will hold its 21st 
regular meeting in April/May 2010 in Geneva.  The Governments of 
Brazil and Yemen both offered to host the 22nd Board meeting in 
November 2011. 
MUSHINGI