Members of a police sanitation team spraying disinfectant as a preventive measure against the spread of the COVID-19 coronavirus in Bozhou, China.
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  • The World Bank's pandemic bonds triggered on Friday, The Financial Times reported, releasing $133 million (R2.5 billion) in virus relief aid to developing nations clobbered by the outbreak.
  • Exponential growth rates for virus infections in several nations were the final criteria to be met before funds could flow.
  • The bonds allowed investors to reap lofty interest rates at the risk of losing their principal payments should the vehicles trigger.
  • Several criticised the assets, saying they offered too little, too late for poor countries struggling through the pandemic.
  • For mores stories go to

The World Bank's pandemic bonds triggered on Friday, The Financial Times reported, unleashing roughly $133 million (R2.5 billion) in aid to the poorest nations hit by the coronavirus.

The vehicles, which offered investors highly attractive yields at the risk of losing their principal payment, reached their key threshold after the exponential growth rate of coronavirus in payment-eligible nations turned positive. When the triggers were met, the bondholders' payments were transferred to the relief pool.

Nations with coronavirus deaths and membership in the World Bank's International Development Association can now tap most of the $196 million sum created by the bonds' issuance.

Investors who bought the organisation's riskier Class B bonds lost all of their money, while those who purchased Class A bonds will lose 16.7 cents on the dollar, the FT reported.

The bonds were first introduced in 2017 as a response to the Ebola virus, and have since caught flak for using stringent triggers. A health crisis would first need to cause at least 2,500 deaths, with more than 20 outside the country of origin. Funds were also frozen until 12 weeks after the "start of the event," according to the World Bank, leaving coronavirus to spread throughout the globe before the aid could be issued.

The various criteria gummed up the works and kept ailing nations from accessing the aid when it would've helped most, Olga Jonas, senior fellow at the Harvard School of Public Health and former World Bank economist, told Business Insider in February. The amount of aid pales in comparison to what's needed to curb the virus' contagion, she added.

"The advertising was that there would be early, rapid, predictable, transparent financing available for outbreaks so that they don't become pandemics," Jonas said. "In order for that to happen, you have to have early triggers. The triggers in the design are very late."

The World Bank has fired back at the criticism, calling the bonds one of the several tools it's using to issue critical financial help.

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