July 27, 2011 - Washington, D.C. - Today, at an American Foundation for AIDS Research (AmFAR) conference, U.S. Agency for International Development (USAID) Administrator Rajiv Shah announced a new initiative that could use USAID's Development Credit Authority (DCA) and the Department of State's Office of the U.S. Global AIDS Coordinator to leverage private sector financing for health facilities in Ethiopia focused on delivering quality services for people living with HIV/AIDS. Currently, HIV/AIDS is a major development challenge for Ethiopia. National projections estimate approximately 1.1 million Ethiopians are living with HIV/AIDS.
"This agreement is a historic initiative and an outstanding example of U.S. Government cooperation that could produce meaningful results in the fight against HIV/AIDS," said USAID Administrator Rajiv Shah. "By validating the strength of borrowers in the health sector, private financial institutions can make smart investments that could ultimately save more lives while sustaining country-led development and innovation" Dr. Shah added.
DCA allows USAID to mobilize local financing through partial credit guarantees. The access to additional financing is expected to enable health care providers to expand services for people living with HIV/AIDS and TB. Under this new initiative, $2.3 million of the Department of State's AIDS funding could be used to support guarantees to local banks, unleashing up to $13.5 million in private capital for AIDS relief in Ethiopia.
Ethiopia's private health sector is small but growing. Very few providers currently offer HIV/AIDS and TB services. In recent years, there have been increased investments in private clinics, hospitals and laboratories but lack of access to land and finance has constrained expansion. This partnership represents an innovative approach to sustainable development by inspiring banking confidence in the health sector.
For more information about USAID's Development Credit Authority, click here . For more information on USAID's Global Health activities, click here (pdf).
The American people, through the U.S. Agency for International Development, have provided economic and humanitarian assistance worldwide for nearly 50 years.
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