Humanitarian Project Finance Facility

The creation of this finance facility is driven by challenges faced by organisations like Vivaldi, a company with over 20 years of experience improving healthcare access across Latin America and the Caribbean. Vivaldi specialises in managing projects that enhance healthcare infrastructure, acting as a bridge between NGOs, governments, and manufacturers to deliver essential equipment and services while ensuring local support.

Despite a strong track record of executing NGO contracts, Vivaldi and similar organisations face significant barriers in securing pre-financing. Banks are reluctant to fund on a project basis, and existing financing options fall short. As a result, in 2024 alone, Vivaldi had to forgo 10 projects worth more than USD 2 million because they lacked the funds to present quotations or execute contracts.

This issue extends globally, with organisations in countries like Egypt, Nicaragua, Colombia, Ghana, and even Germanyfacing similar constraints.

Real-World Examples

• Antishock suits for preventing hemorrhages during childbirth in Nicaragua

• Laboratory equipment to enhance medical capacities in Uzbekistan

• Medical supplies for the Syrian crisis

• Diagnostic tools for Guatemala and El Salvador

• Water filters for vulnerable communities in Colombia

Without suitable pre-financing, operators either decline projects or resort to risky traditional debt. The result? Essential services aren’t delivered, and vulnerable populations suffer.

Compounding Factors

The situation has worsened with the effective shutdown of USAID funding. The U.S. administration’s Executive Order 14169 triggered a 90-day suspension of foreign assistance, causing widespread uncertainty and the collapse of many programs.

In Humanitarian Assistance and Disaster Relief (HADR), the stakes are even higher. INGOs often flood local markets during crisis response with externally sourced goods not designed for local conditions. This:

1. Undermines local providers

2. Weakens community resilience

3. Increases costs

4. Delays aid

5. Reduces competition

Operators from developed countries are usually awarded the majority of contracts — not because they offer better outcomes, but because they can access capital. Local organisations are excluded not on merit, but on financing capacity.

A Global Pattern, A Global Opportunity

This experience isn’t unique to Vivaldi. Red Hat Impact sees it repeated across frontier and emerging markets. Traditional finance doesn’t fit the reality of impact-first enterprises.

What’s needed is innovation in financial tools:

• Aligned with local operators’ realities

• Designed to match cash flow and risk profiles

• Capable of unlocking critical services for underserved populations

• Attractive to commercially focused, impact-aligned investors

The right capital at the right time creates outsize returns: for enterprises, for communities, and for the resilience of entire local economies.

Opportunity

According to Humanitarian Action, “in 2025, humanitarian partners are appealing for over US$47 billion to assist nearly 190 million people facing life-threatening and urgent needs across 72 countries.”

This amount of capital, however, is dwarfed by the economic losses attributed to extreme weather and geophysical hazards, reported to exceed USD $4.2 trillion between 2004 and 2023.

While precise data on the volume of goods and services delivered by SMEs to address these challenges is limited, the United Nations Global Marketplace reports that in 2023:

• UN procurement from Least Developed Countries (LDCs) totalled $5.0 billion, or 20.1% of the UN’s total procurement volume.

• Procurement from suppliers in 32 Landlocked Developing Countries (LLDCs) and 50 Small Island Developing States (SIDS) reached $3.5 billion.

Using this as a rough analogue for market demand in frontier and emerging markets, we estimate that the total value of goods and services delivered by organisations like Vivaldi is at least USD $8 billion annually. This figure is likely significantly higher, considering that many unfulfilled projects—rejected due to lack of pre-financing—remain out of scope in current data.

The vacuum left by retreating multilateral donors only increases the urgency for new financing models. With USAID funding evaporated and other donors reassessing global priorities, mechanisms like FIFF are no longer optional—they are essential for the continuity of humanitarian and health interventions.

Solution

A Finance Innovation Facility for Frontier Markets (FIFF) is proposed: an innovative pre-financing mechanism targeted at pre-vetted operators and projects delivering critical health, sanitation, and humanitarian infrastructure and services in frontier and emerging markets.

Key features:

• Blended finance model drawing on both public and private sector capital, with concessionary and commercial returns as appropriate.

• Funds are deployed by the facility manager to qualified and experienced local operators who already hold contracts from major agencies.

• Repayment occurs upon successful project delivery and payment by contracting agencies.

Early feedback from prospective donors and supporters also highlights the potential to integrate decentralised finance and metacurrencies.

These could enhance transparency, mitigate currency risks, and address operational challenges.

Prospective Portfolio

Vivaldi has a growing pipeline of prospective FIFF-eligible operators and projects in frontier and emerging markets. These include:

1. Colombia (2020–2024)

   • 73 projects in the health sector

   • 108 operators delivering services for government agencies and INGOs

2. Global (2023–2024)

   • 60 UNOPS projects identified

   • 72 operators across multiple regions executing these projects

Vivaldi has validated the need for pre-finance with several of these operators. Excerpts from letters of supportdemonstrate why project finance is critical and how it would enhance effectiveness and impact.

The Frontier Infrastructure Finance Facility delivers positive benefits and outcomes for contracting agencies, operators from emerging and frontier markets, investors, and communities in frontier markets who are delivering critical health, sanitation and humanitarian infrastructure and services. Overall, such a Facility enables a more resilient and prepared sector to respond to disasters and crises in frontier and emerging markets through:

• De-risking of contracts by pre-vetting projects and organisations

• De-risking of operators by securing reliable access to project finance

• Activating local response networks to accelerate actions, mitigate crises, and restore human dignity

• Building local community resilience by supporting local operators with the contextual and cultural understanding necessary to deliver solutions

• Generating returns for investors that can increase the available capital for future investment in this crucial sector