EVHA

EVHA (Equity Vehicle for Health in Africa)

Summary of Proposed Investment

This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only.

Project number	26822
Company name	EVHA Limited
Country	Mauritius
Sector	Health Care
Environmental category	FI
Department	Health and Education
Status	Pending Approval

Date SPI disclosed	January 25, 2008
Projected board date	February 28, 2008

Overview

Sponsor/Cost/Location

Development Impact

Contacts

Attachments

Project description

The Equity Vehicle for Healthcare in Africa (EVHA or the company) is a Mauritius-domiciled investment holding company focused on providing long-term risk capital to Africa’s under-served healthcare market. EVHA will consider viable investments from all parts of Africa, but will initially focus on a smaller number of priority countries, namely, Nigeria, Angola, Ghana, Tanzania, Senegal, Cameroon, Uganda, and Kenya (the Target Regions). EVHA will expand its geographic focus once it is more established and potential investment opportunities in other relevant countries are identified. EVHA’s investments are expected to range between $500,000 and $5 million in:

- health service providers like clinics, private hospitals (existing and greenfield), diagnostic centers and laboratories;
- risk pooling and healthcare financing institutions such as HMO and health insurance companies;
- distribution and retail companies such as eye clinics, pharmaceutical chains etc; and
- for-profit health care education.

The portfolio investment of the company will be managed by an independent investment management team or a fund manager chosen via an open bidding process.

Anticipated development impact of the project

EVHA is expected to have a strong impact for private sector development because of the company’s focus on health care and innovative companies in the sector.

- Provision of health care:

EVHA is a complementing effort to support the gaps in health provision in Africa. Sub-Saharan Africa has about 11% of the world’s people, but it carries 24% of the global disease burden in human and financial costs and commands less than one percent of global health expenditure. The current providers of health-related goods and services in Sub-Saharan Africa – either public institutions, private institutions, NGOs, or the informal sector – do not have access to sufficient capital to efficiently address the demand for health care.

- Economic development:

Health care, like education, is a fundamental backbone to economic development and poverty alleviation. The company is expected to invest in companies aiming to increase access to quality health-related goods and services, which in turn should lead to increased employment rates in the health sector and higher productivity among the general workforce.

- Supporting small and medium enterprises (SMEs):

EVHA’s investments are expected to range between $500,000 and $5 million, which will mostly serve companies that fall within the World Bank Group’s definition of SMEs.

- Private sector development:

This will be evidenced by improving the sustainability of EVHA’s investee companies.

- Environmental practices:

The Investment Manager will adopt international best practices for environmental and social risk assessment and management, and improve transparency and corporate governance, thus transferring knowledge and skills to portfolio companies.

IFC's expected development contribution

IFC role is significant in this project and will begin on initial start-up until implementation, and will include:

- Providing health care sector knowledge and expertise:

IFC’s Health and Education department will be closely involved in providing management and strategic guidance to EVHA. IFC’s deep experience investing in health care opportunities in varied business environments presents a critical and relevant knowledge base for the company.

- Providing institutional support:

IFC has a long history in institution building and support — especially with financial institutions — and this core competency will be deployed throughout the life of the fund in the form of strategic guidance and operational advice, and technical advice, if needed.

- Catalytic role mobilizing domestic and foreign private and institutional capital:

IFC early participation will help the company finalize its incorporation and setup, reach a minimum capitalization to implement its strategy, provide added credibility to an emerging investment manager and increase its chances of raising additional capital from private sources.

- Providing input on fund/investment vehicle structure and terms:

Based on IFC’s experience investing in many investment vehicles and building new institutions in emerging markets, IFC will help the Investment Manager attract private capital in subsequent closings by implementing attractive market-based terms.

- Improving corporate governance:

Through its participation in the company’s governance bodies, IFC will play an active role in assisting the Investment Manager to adopt best practice corporate governance, environmental and social standards at the company and portfolio company level.

Environmental and social issues - Category FI

This project has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure. During appraisal, IFC will analyze the investment vehicle’s expected portfolio and sectors of investment and determine the Applicable Performance Requirements if any, that would include a combination of:

- The IFC FI Exclusion List,
- The applicable National Social and Environmental Laws and regulations,
- and/or The IFC Performance Standards.

IFC will also review, if required, the capacity of the investment vehicle to manage social and environmental risks and to establish and maintain a Social & Environmental Management System (SEMS). IFC may suggest Supplemental Actions to address any gaps in the SEMS if required. The Investment Manager will be required to:

- Develop an, or upgrade, if necessary, any existing SEMS, prior to disbursement to the satisfaction of IFC;
- Identify responsible, qualified persons to manage and implement the SEMS;
- Commit to implement the SEMS to ensure that its investments/activities are in compliance with the Applicable Performance Requirements;
- Submit a periodic report to IFC as per a format to be provided by IFC.

IFC PROJECTS