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Supply Chain Finance Guarantees COVID-19 Vaccine Test - ADB

Supply Chain Finance Guarantees COVID-19 Vaccine Test - ADB

(21 December 2020 – Asia) Setting the benchmark for global supply chain excellence, Asia will be profoundly tested by wide scale COVID-19 vaccine distribution according to the Asian Development Bank (ADB).

The mammoth vaccine distribution logistical challenge will be supported by trade finance and supply chain finance guarantees. COVID-19 vaccines are being developed and approved for use globally in unprecedented global delivery and administration effort. The vaccines must be accessed by populations in locations lacking adequate infrastructure and basic refrigeration noting leading vaccines approved for use in the United Kingdom (UK) and Canada must be kept at minus -70°C.

DHL estimates that global vaccine coverage will take around 200,000 pallet shipments and 15 million deliveries in cooling boxes across 15,000 flights. The vaccine will most likely need to travel by air, since most container ships are unequipped.

Global supply chain pain points must be exposed to enable streamlined distribution as evidenced by personal protection equipment (PPE) issues encountered at the onset of the pandemic. It became clear then that a major source of the difficulties was that supply chains for critical goods were opaque. In response, the ASB Trade and Supply Chain Finance Program developed a supply chain mapping tool as a way for anyone to find out who makes what in the supply chains for 19 products involved in fighting the pandemic.

To make the trade in these critical products run smoother in developing economies, ADB’s Trade and Supply Chain Finance Program has made available a US$500-million Vaccine Import Facility to purchase vaccines and related equipment. The facility provides guarantees to support the purchase of these items, and AAA-guarantees available through the program’s vaccine import facility will mitigate payment risks and facilitate import.

The beauty of supply chain support is that it can compound so easily, making it ideally suited to the current challenge of removing bottlenecks in the supply of life-saving vaccine. Through risk-sharing with partner banks, the US$500 million facility could be leveraged to US$1 billion. 

“If we want mass vaccination, we need supply chains that are up to the task of delivering the vaccines to people who need it most” UNICEF, the United Nation’s Children’s Fund, stated.

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