Germany and Mongolia convert €29 million in debt into public health investments with support from the Global Fund – press releases

Germany and Mongolia convert €29 million in debt into public health investments with support from the Global Fund

December 9, 2024

– The Federal Republic of Germany, through the KfW Development Bank, and the Government of Mongolia, through the Ministry of Finance, today signed a landmark agreement to convert Mongolia’s €29 million debt into public health investments. With the brand new funding, Mongolia will improve access to TB care, improve case detection and treatment, and expand HIV services to key and vulnerable populations. The country will even use this investment to transition to a more integrated and efficient healthcare system.

The agreement was signed as a part of the Debt2Health Global Fund initiative [ download in English | Español | Français ] an progressive financing mechanism designed to encourage national health financing by transforming debt repayments into life-saving investments in public health programs. Under individually negotiated debt swap agreements, the creditor country waives repayment of the loan when the beneficiary country agrees to speculate all or a part of the released resources in a program supported by the Global Fund.

Germany – the second-largest European donor to the Global Fund and the fourth-largest public donor overall – has been a serious supporter of the Debt2Health Global Fund mechanism, each when piloting the concept in 2007 and supporting this system as a creditor in lots of subsequent transactions.

The G20 Joint Task Force on Finance and Health actively supports such debt-for-healthcare arrangements as a part of a broader technique to strengthen health financing in low- and middle-income countries, address debt burdens, and improve preparedness for pandemics and widespread health care.

Javkhlan Bold, Minister of Finance of Mongolia, said: “This debt swap agreement exemplifies Mongolia’s commitment to strengthening health systems and achieving sustainable health outcomes. With the support of Germany and the Global Fund, we can meet the critical health needs of our communities and increase the resilience of our health sector.”

Helmut Kulitz, Ambassador of the Federal Republic of Germany to Mongolia, said: “This debt conversion is a new and innovative element of our cooperation with Mongolia. By redirecting resources to Mongolia’s health priorities, we enable sustainable development and strengthen national resilience. This is a significant contribution to the nationwide improvement of Mongolia’s healthcare system.”

Frank Bohnet, director of the KfW Development Bank, said: “The signing of the debt swap agreement is a significant step in our long-term and trust-based financial cooperation with Mongolia. This project reflects our commitment to supporting Mongolia in improving health care services and ensuring those affected by the disease receive the necessary treatment and support.”

Peter Sands, executive director of the Global Fund, said: “Debt2Health is a transformative mechanism that strengthens healthcare financing and improves access to care. We commend Germany and Mongolia for their leadership in securing innovative financing to combat infectious diseases such as tuberculosis and HIV, while enhancing pandemic preparedness. We hope this will inspire other countries to explore similar approaches to improving global health.”

Since its inception in 2007, Debt2Health has generated nearly $330 million in healthcare funding. Numerous countries participated within the debt swap agreements, including Australia, Germany and Spain on the one hand; and Cameroon, Côte d’Ivoire, Democratic Republic of the Congo, Egypt, El Salvador, Ethiopia, Indonesia, Jordan, Mongolia, Pakistan and Sri Lanka on the opposite side.

The Global Fund is committed to further developing and implementing practical, progressive financial mechanisms to extend the impact on these three diseases. These solutions complement government spending and strengthen national healthcare financing.