International Finance Facility
01 April 2004
In January 2003 HM Treasury and the Department for International Development (DFID) launched a proposal for an International Finance Facility (IFF). The IFF is designed to frontload aid to help meet the Millennium Development Goals.
Estimates suggest that development assistance must be doubled and focused on the poorest countries if the Millennium Development Goals are to be met - an increase of at least $50 billion a year. At the UN's International Conference on Financing in Monterrey in 2002, donors pledged to provide an additional $16 billion a year from 2006. But this means a significant resource gap must be bridged if the Millennium Development Goals are to be reached.
The Millennium Development Goals represent different indicators of the same basic poverty. Investments in different sectors must take place simultaneously to ensure sustainable progress. Education, health, access to water, roads and other infrastructure for growth must be tackled at the same time to ensure a lasting exit from poverty. Funding for debt relief should reinforce, not replace, funding to build a skilled work force and the infrastructure and capacity to trade. The IFF, as a stable financing vehicle, could provide the critical mass of additional and predictable funding needed to make lasting progress in all these areas.
The IFF:
- is a financing mechanism which would provide up to an additional $50 billion a year in
development assistance between now and 2015;
- would leverage in additional money from the international capital markets by issuing
bonds, based on legally-binding long-term donor commitments;
- would be responsible for repaying bondholders using future donor payment streams; and
- would disburse resources through existing multilateral and bilateral mechanisms.
Since the proposal for the IFF was launched, it has received broad interest and support from emerging markets, developing countries, international institutions, faith communities, NGOs and business.
The April 2004 proposal document is designed to facilitate the ongoing process of consultation and is available below to download in Adobe Acrobat Portable Document Format (PDF). Earlier proposal documents and briefing notes are also available below. For alternative ways to read PDF documents and further information on website accessibility visit the HM Treasury accessibility page.
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