World Bank, US, others ink $710m deal to fund COVID-19 Vaccines production in South Africa

*The funding agreement among the partners will support Aspen Pharmacare Holdings Limited, South Africa, in producing 500 million Johnson & Johnson Coronavirus Vaccine doses through 2022

*The company is seeking to play a meaningful role in contributing to the objective of delivering the majority of Africa’s COVID-19 Vaccine needs from production sites located in Africa, says Aspen

Gbenga Kayode | ConsumerConnect

In a landmark deal to support Aspen to produce the Johnson & Johnson (J&J) Coronavirus (COVID-19) Vaccines in the country, the World Bank and a trio of Western government agencies have announced a $710million (600 million-Euro) financing package for production of the vaccine brand in South Africa.

ConsumerConnect reports the funding deal announced Wednesday, June 30, 2021, is part of an effort at scaling global vaccine production and meeting the pressing demand for billions of doses for vaccinations on the African continent.

Aspen Pharmacare Holdings Limited in South Africa

The new funding agreement, aside from the World Bank also involves the United States (US), Germany and France.

It was gathered that the deal would support Aspen Pharmacare Holdings Limited in South Africa in producing 500 million doses of the shots through 2022. Of that amount, 30 million will be produced for use in South Africa in 2021, out of a total of 250 million due by the end of the year.

US officials were quoted to have said that the deal builds on an existing licence between Aspen and J&J, and includes no new intellectual property agreement.

According to the administration officials, the agreement is aimed at ramping up production of COVID-19 Vaccines outside a handful of countries as part of the overall effort to make billions of shots needed to combat the disruptive pandemic.

J&J will provide the drug substance, which is the main ingredient, and Aspen, which is based in the South African port city of Durban, will conduct the fill-finish process, or the last stage in production, Bloomberg report said.

In a statement on the development, J&J said: “Johnson & Johnson is creating a global manufacturing network that will include ten manufacturers to fulfill orders from all its customers for COVID-19 vaccines.”

The drug maker noted that it has worked with Aspen Pharmacare Holdings Limited on the vaccine since November 2020.

“We welcome the World Bank Group’s announcement that it also will support Aspen’s operations, including production capacity for COVID-19 vaccine manufacturing,” the company stated.

The funding for the vaccines production, according to report, comes from the International Finance Corporation (IFC), which is affiliated with the World Bank, and three development agencies: the US International Development Finance Corporation, or DFC, Germany’s DEG and France’s Proparco SA.

It was gathered the United States portion of the funding deal is 100 million Euros, and the money comes from the DFC’s core budget.

President Cyril Ramaphosa of South Africa

IFC also said in a statement, that the financing would help Aspen to “refinance existing debt and strengthen the company’s balance sheet, supporting Aspen’s operations including production of vaccines, and other therapies in African and emerging markets.”

Gayle Smith, who is coordinating the US State Department’s global vaccine strategy, said: “I think this is hugely important.

“In the short term, it means greater availability of vaccine supply, produced in Africa for Africa.

“And I think in the medium-long term, it also means increased capacity for the continent to produce other types of vaccines.”

In a way for Aspen to expand its production capacity, the DFC had previously announced a deal to support the expansion of production at Biological E Limited, an Indian vaccine manufacturer.

Further announcements are in development beyond India and South Africa, an official said.

It is as well noted that the vast majority of the doses for vaccinations against the virus are expected to be provided to the African Vaccine Acquisition Trust and distributed from there, according to the officials.

The AVAT already has a deal with J&J to purchase as many as 400 million doses by the end of 2022, report stated.

Aspen Pharmacare Holdings Limited in a statement has said: “Aspen is actively seeking opportunities to further extend and capacitate COVID vaccine manufacturing,” adding, the company is “seeking to play a meaningful role in contributing to the objective of delivering the majority of Africa’s COVID-vaccine needs from production sites located in Africa.”

Meanwhile, Aspen shares traded 1.5% higher at the close in Johannesburg, South Africa.

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