1. RHSC Financing Mechanisms Workstream A « Mobilizing Additional Dollars » Phase I Dr. Wolfgang Bichmann, KfW Consultant: Sandra Rolet RHSC Meeting Bonn, October 19-20, 2006

2. SSG focus on “Better $ “ & on “More $” Origin: Den Haag & Seattle meetings - (Gates Foundation Mercer Study / DFID studies) Agreement to support further work Gates Foundation proposed two workstreams, as above – –Gates Foundation pursued “Better $” (McKinsey) – –BMZ/KfW offered to support “More $” (This study / Phase I)

3. Phase I study - Findings The specificity of RH commodities supply Changes on the development finance scene / Possible sources of new finance Extensive review of “innovative development finance” potentially relevant for RHCS What it takes for the RHSC to make progress in raising additional $

4. Specificity of RH Commodity Supplies More at stake than money & … … Absence of a dedicated global RH instrument … Pros & Cons Coalition members express reserves

5. Wide choice of approaches to fit different situations and constraints Raising large amounts √ Working on small scale Requiring political support √ More “ready to go” Fit for one single situation √ For a larger swat of countries Feasible for sophisticated, cohesive group of countries √ Accessible to the poorest Each solution has its logic, development fit, cost- benefit ratio and specific requirements

6. It is a time of opportunity for the RHSC Overall need is there ODA architecture more “dynamic” Innovation “in” (2006: Year of the pilots) New partnership and alliances possible

7. Before an option can be chosen, a few key issues need resolving 1. 1. Where would the RHSC like this to go: What would the $ be for? To fill which gap? Objectives need to be narrowed down into a compelling agenda 2. 2. Where would the additional $ go? – –To the Coalition itself? – –To one or several members? – –To one country or to a group of countries? – –Elsewhere? 3. 3. Championing the cause : Through which channel would the financing option be pursued? Would the Coalition itself champion the effort?

8. Suggestion for next steps… RHSC and SSG to reflect/confirm fundamental strategic choices (Previous slide) Small ad hoc SSG sub-committee (with financial leaning) to interact with consultant on choice of route to fit these choices RHSC to pursue short-term opportunities in the meantime (Ex: Air ticket tax)