Nov 11, 2008

World - Fund grants $2.75 billion to fight aids,diseases

Matthias Williams

NEW DELHI (Reuters) - The Global Fund to Fight AIDS, Tuberculosis and Malaria approved 94 new grants worth $2.75 billion over two years, its executive director said on Monday.

Zimbabwe is set to receive $169 million after it returned $7.3 million the fund said had been "confiscated" by Zimbabwe's Reserve Bank in 2007.

The Global Fund, launched by the G8 club of major industrial nations in 2002, says it has prevented 2.5 million people from dying from HIV/AIDS, TB and malaria.

"We have a fantastic message to bring back to the rich nations of the world: programmes to fight these three diseases save lives, reduce disease burdens, and strengthen health systems," executive director Michel Kazatchkine said after a meeting in India's capital.

The grants are the highest amount of new financing the Global Fund has approved, bringing its portfolio to $14.4 billion in 140 countries.

But the U.S.-based Global AIDS alliance advocacy group said last week that U.S. and French officials want drastic cutbacks, preferring to concentrate on bilateral health programmes.

"At this point there is no reason for us to believe that they will cut funding," Nicolas Demey, a spokesman for the Global Fund, told Reuters, adding that both countries "have always been strong supporters" of the Global Fund.

The Global Fund said last week it would be "extremely firm" with Zimbabwe after it was unable to withdraw millions of U.S. dollars from the country's Reserve Bank.

Worried about exchange rate risks, the Global Fund rerouted most of its money out of Zimbabwe in 2007 as the southern African nation went into economic meltdown, but held some back to spend locally.

Zimbabwe has the fourth-highest rate of HIV prevalence in the world, according to 2007 data.

The Reserve Bank of Zimbabwe last week returned the aid money, and promised that the Global Fund would be allowed to distribute future grants in U.S. dollars.

The Global Fund has said the $169 million of new money is conditional on Zimbabwe's future behaviour.

"The Global Fund will not sign any of these new grants with the country until it has agreements on a way of channelling cash that will not enable any interference by the government at all," Demey said.

India -- one of the fund's largest beneficiaries -- had its application for around $128 million turned down, because "the soundness of approach was not as it should have been", Demey said. India previously received $490 million.

The Global Fund's next funding round will be approved in November 2009

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