SA’s biggest pharmaceutical manufacturer, Aspen Pharmacare, is to receive a €600m (R10.1bn) long-term debt financing package from a consortium of development financiers led by the World Bank’s International Finance Corporation (IFC) to support the development of vaccine manufacturing capacity in Africa.
It is the first financing deal announced by the partnership, which was launched during French President Emanuel Macron’s visit to SA in May.
The partnership includes the IFC, the French development institution Proparco, German development institution DEG, and the US International Development Finance Corporation (DFC). It is the largest health-care investment led by the IFC to date and includes €200m from the IFC’s own account, €156m from Proparco, €144m to be arranged by DEG and €100m from DFC.
Africa has lagged the rest of the world in rolling out Covid-19 shots, partly due to the lack of vaccine manufacturing capacity on the continent. The continent produces only about 1% of the vaccines it uses, and Aspen is the only pharmaceutical manufacturer in Africa contracted by Johnson & Johnson (J&J) to help compound, fill, finish and package its Covid-19 shots, which it does at its sterile facility in Gqeberha in the Eastern Cape.
“We are actively seeking opportunities to further extend and capacitate Covid-19 vaccine manufacture at this world-class production facility,” said Aspen CEO Stephen Saad. “Aspen is seeking to play a meaningful role in contributing to the objective of delivering the majority of Africa’s needs from production sites located in Africa.”
Aspen said the debt financing package would be structured as an amortising loan, with a two-year grace period and the final instalment due seven years after its effective date. The proceeds will be used to refinance a portion of Aspen’s existing euro-denominated syndicated debt facilities, it said.
In a statement released on Wednesday, the partnership said the investment would support Aspen’s production of vaccines and other therapies in African and emerging markets. The AU and Africa Centres for Disease Control said in April they aimed for Africa to manufacture 60% of its vaccine needs by 2040.
“President Joe Biden has been clear since coming into office that with this pandemic no-one is safe until everyone is safe. The trick is how do we ramp up [vaccine] production around the world. We are looking at sites in Africa and around the world,” said US charge d’affaires to SA Todd Haskell.
The investment in Aspen is expected to lead to production of up to 250-million doses of the J&J vaccine by the end of the year, 30-million of which will be provided to SA and the rest distributed to other African countries, he said.
The first of these vaccines would be available “in the coming weeks”, he said.
Haskell said the US would donate 1-million PfizerBioNTech Covid-19 vaccines to SA, due to arrive in the next few weeks.
The bilateral donation is part of the 500-million doses the US previously said it would buy from Pfizer to donate to other countries, primarily through international vaccine financing agency Covax and the AU.
“SA is one of the few countries we have identified for a bilateral donation.
“Getting as many shots in arms as quickly as possible to save SA lives is a priority. The situation here right now is particularly difficult,” said Haskell.
SA is in the grip of a third wave of Covid-19 infections that has stretched hospital services to their limit in Gauteng.
Infections have surged as the more contagious Delta coronavirus variant rapidly displaces older and less contagious lineages.
The vast majority of SA’s population is unvaccinated due to a series of delays that saw the national rollout only begin in mid-May. The rollout was launched with severely constrained supplies while US regulators assessed the safety of the J&J vaccine, leaving the government with only limited volumes of Pfizer shots on hand.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.