IFC Backs Africa Health Care Fund

IFC is helping to provide health services and save lives in Sub-Saharan Africa by creating a new private equity fund that will invest in Africa’s health sector.

“We are celebrating a significant milestone,” said Lars Thunell, IFC EVP and CEO, who attended the launch in London, June 4. “It is a key component of IFC’s $1 billion Africa health strategy, which includes improving the operating environment for companies in addition to providing financing,” Thunell added.

The closing of the fund was preceded by a health roundtable attended by more than 30 major investors and donors including African health ministers and senior officials from Ghana, Kenya, and Mali. The event was an opportunity for IFC to raise the profile of the overall initiative. Potential new partners expressed a strong interest in coming in as investors while other donors were more focused on policy work.

IFC's Partners

IFC’s partners in the Health in Africa Fund are the African Development Bank, the Bill & Melinda Gates Foundation, and the German development finance institution DEG. The fund will target commitments between $100 to 120 million over two closings. The first closing of $57 million includes investments from:

    • IFC ($20 million)
    • AfDB ($20 million)
    • Gates Foundation ($7 million)
    • DEG ($10 million)

Managed by Aureos Capital, the fund will invest in health SMEs, such as health clinics and diagnostic centers, with the goal of helping low-income Africans gain access to affordable, high-quality health services.

“This fund is unique because it will be measured not only by fiscal performance but also by its ability to cultivate businesses serving the poor, said Guy Ellena, IFC director, health and education.

Wide Range of Companies

The fund will make about 30 long-term equity and quasi-equity investments, ranging from $250,000 to $5 million, in socially responsible and financially sustainable private health companies. It will invest in a wide range of companies that deliver:

    • Health services (clinics, hospitals, diagnostic centers, labs)
    • Risk pooling and financing vehicles (health management organizations, insurance companies)
    • Distribution and retail organizations (eye clinics, pharmaceutical chains, logistics companies)
    • Pharmaceutical and medical-related manufacturing companies
    • Medical education
    • Providers of medical education

$1 Billion in Investment

The Health in Africa Fund is part of the IFC-World Bank Health in Africa Initiative under which IFC intends to mobilize up to $1 billion in investment and advisory services over five years, following publication of its 2007
Business of Health in Africa report, which focused on how to improve people’s lives by partnering with the private sector.

Besides the equity vehicle, IFC is improving access to long-term financing for smaller companies involved in health care through local financial intermediaries. Together with the World Bank and other partners, IFC is also working with governments to help them harness the private sector to achieve national health goals and is producing the first biennial report on Africa’s health care investment climate.

For more information contact:

Ludi Joseph
Communications Practice Group
Health and Education Department
E-mail: ljoseph@ifc.org
Tel: 202-473-7700