Innovative financing mechanisms were born out of a need to reach the Millennium Development Goals (MDGs) that 192 United Nations member states and at least 23 international organizations agreed to achieve by the year 2015.
[4] So far, most donor states have failed to meet their 0.7% commitment from the Monterrey Consensus of their Gross National Income (GNI) dedicated to Official Development Assistance.
Complementarity: The role of innovative financing mechanisms is to raise new funds for existing organizations and not to add new actors and complexities to the development landscape.
Finally, innovative financing mechanisms should be designed to comply with the other principles of the 2005 Paris Declaration on Aid Effectiveness and the 2008 Accra Agenda for Action.
UNITAID funds projects through implementing partners across the three diseases based on the market impact criteria (making medication prices affordable for developing countries).
The International Finance Facility for Immunisation (IFFIm) issues bonds in the capital markets, converting long-term government pledges into immediately available cash resources.
Thanks to the mechanism, global companies contribute a share of their profits on goods from sales branded with the Product Red trademark.
Creditors agree to forgo part of the repayment of the money due to them against the commitment of the debtor to invest an agreed-upon amount on Global Fund-approved programs.
De-Tax is a "proposal to earmark a share of VAT Taxes generated by participating businesses for health systems development".
They assist governments to put in place micro-surcharges, taxes and public-private partnerships as mechanisms to raise additional funds and finance development projects.