The World Bank Group has launched a Pandemic Emergency Financing Facility (PEF), Saturday.

The facility which is designed to protect the world against deadly pandemics will help create the first-ever insurance market for pandemic risk.

Speaking at the ceremony held in Sendai, Japan ahead of the G7 meeting, President of the World Bank Group, Jim Yong Kim expressed confidence in the facility.

According to him, the facility will seek to address what the world failed to do when some countries in West Africa were down with Ebola.

“The Ebola crisis in Guinea, Liberia and Sierra Leone taught all of us that we must be much be much more vigilant to outbreaks and respond immediately to save lives and also to protect economic growth.”

“Pandemics pose some of the biggest threats in the world to people’s lives and to economies, and for the first time, we will have a system that can move funding and teams of experts to the sites of outbreaks before they spin out of control,” he added.

Deputy Prime Minister and Minister of Finance of Japan, Taro Aso disclosed his country is proud to be associated with the facility.

He revealed, “Innovative financing for crisis responses by the PEF, together with financing for preparedness and prevention in peacetime including through IDA, are important to mitigate human and social losses and to help quickly recover in the event of a crisis.”

Director-General of the World Health Organization, Margaret Chan did not mince words when she disclosed that the facility is relevant in the current times.

“Recent years have seen a dramatic resurgence of the threat from emerging and re-emerging infectious diseases,” she said.

She said the WHO fully “supports the Pandemic Emergency Financing Facility as a critical contribution to global health security and a crucial line of defence against high-threat pathogens.”

Japan, which holds the G7 Presidency, committed the first $50 million in funding toward the new initiative.

The facility includes an insurance window, which combines funding from the reinsurance markets with the proceeds of World Bank-issued pandemic (catastrophe, or Cat) bonds, as well as a complementary cash window.

This will be the first time World Bank Cat Bonds have been used to combat infectious diseases. In the event of an outbreak, the PEF will release funds quickly to countries and qualified international responding agencies.