In addition to establishing itself as a global hub for microfinance investment, the Luxembourg Stock Exchange’s involvement in the International Finance Facility for Immunisation (IFFIm) provides another example of alternative opportunities in the intersection between finance and development.
IFFIm was established in 2006 to accelerate the availability of funds to be used for health and immunisation programmes in 70 of the poorest countries around the world. It works by issuing bonds and using the proceeds to “frontload” aid funding. This innovative funding programme is thus able to increase significantly the flow of aid to ensure reliable and predictable funding flows for immunisation programmes and health system development. An anticipated IFFIm investment of US$4 billion is expected to protect more than 500 million children through immunisation campaigns against measles, tetanus, and yellow fever by 2015.
IFFIm’s US$1 billion inaugural bond issue was admitted to trading on LuxSE in November 2006. The bonds were priced comparably to other sovereign/supranational issuers and were bought by a broad range of investors – both geographically and by investor type – including several central banks, pension funds, fund managers, and insurance companies. This first tranche of the IFFIm programme was a landmark not only in the history of multilateral development aid, but also by the active role played by the international capital markets. A second tranche of IFFIm bonds was admitted to trading on LuxSE in March 2008. This US$223 million-equivalent South African rand denominated issue was structured for Japanese investors.
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