Michelmores’ Impact Investment and Banking teams have advised the Soros Economic Development Fund (SEDF) – the social impact investment arm of the Open Society Foundation – on its partnership with MedAccess, a UK-based social finance company, and Gavi, the Vaccine Alliance, to provide procurement guarantees to the COVAX Cost Sharing Mechanism, Gavi’s global COVAX vaccine distribution system.
The COVAX Cost Sharing Mechanism will facilitate the procurement of COVID-19 vaccine doses using a cost-share model to help drive down the unit price. As well as a more cost effective model for ordering vaccinations, the scheme will help COVAX Advance Market Commitment (AMC) countries to procure COVID-19 vaccines via domestic resources or low-cost financing from multilateral development bank partners. The mechanism will help the 92 poorest countries in the world who were allocated COVID-19 vaccinations free of charge via the AMC. It is hoped that the model will help AMC beneficiaries to maintain their vaccination programmes into the future.
Of the deal, Karen Williams said:
‘The COVAX Cost Sharing Mechanism is an innovative and important new scheme that will play a part in the worldwide fight against COVID-19. It has been a pleasure to advise SEDF on its provision of a US$100 million procurement guarantee as part of a new $250 million risk-sharing initiative. This guarantee matches that provided by MedAccess and together the investment will help COVAX to order more COVID-19 vaccinations from manufacturers on behalf of AMC countries.’
Catherine Cax, acting chief executive officer of SEDF, noted that SEDF had joined the initiative because conventional investors had been unable to resolve an impediment in the procurement process—the impossibility of pinpointing and insuring risk.
“SEDF made this commitment despite the risk uncertainties and moved into an area of business that is new to us—all because of the urgent need to respond to the global COVID pandemic. We would encourage more impact investors to elevate their risk tolerance in pursuit of outsized impact, and to be prepared to be innovative in moving to address most urgent need.”
SEDF’s Swiss law advisers were Zurich based commercial firm Blum & Grob.
MedAccess were advised by Clifford Chance.
Gavi were advised by Linklaters.