Book Chapter
The International Finance Facility Proposal

Proposals for new institutional arrangements for Official Development Assistance (ODA) that exploit techniques for securitisation in the capital market can function as an innovative source for generating the funds necessary for the achievement of Millennium Development Goals (MDGs). This chapter takes as an example of this type of proposal the International Finance Facility (IFF) proposal published in the United Kingdom in January 2003 jointly by HM Treasury and the UK Department for International Development (DFID). It discusses the IFF proposal in detail, describing its main technical details and financial structure, and elaborating on crucially important administration and implementation issues. The proposal is evaluated in terms of both its potential advantages and its shortcomings, as well as suggesting ways to strengthen the proposal further. The key challenges for IFF are summarised in the concluding section.