Uncategorized Archives - Health Finance Coalition

Financing the Belém Plan: A Discussion at the 2025 Global Conference on Climate and Health

During the 2025 Global Conference on Climate and Health – hosted by the Government of Brazil, the World Health Organization, and the Pan American Health Organization in Brasília, Brazil – global leaders convened to accelerate action at the intersection of climate change and public health. A central outcome of the conference was to gather inputs for the Belém Health Action Plan, a forward-looking framework designed to build climate-resilient health systems, particularly in countries most vulnerable to climate shocks. The plan outlines urgent priorities while calling for new investments to make health systems more adaptive, equitable, and sustainable.

In support of this agenda, a high-level panel titled “Financing the Belém Health Action Plan: Achieving Climate-Health Resilience through Blended Capital Solutions” featured various experts, including Tamer Rabie (World Bank), Seonmi Choi (The Global Fund), and Dr. Adi Utarini (Universitas Gadjah Mada). Facilitated by Alex Honjiyo, Director of The Health Finance Coalition, the panel explored how blended finance, an approach that combines public, private, and philanthropic capital, can unlock the resources needed to bring the plan to life.

Here is what we heard:

The Stakes Are Rising

As climate threats mount and global budgets tighten, traditional aid alone cannot meet the moment. This is why the Belém Health Action Plan calls for continuous, country-led financing, and why blended finance has emerged as a powerful tool to close the gap.

“Around the world, we are witnessing the real impacts of climate change on public health and facing the sobering reality that traditional aid is shrinking just when we need these resources to grow,” said Alex Honjiyo, Director of the Health Finance Coalition.

Blended Finance Works Best When Aligned to Risk and Stage

Not all money does the same job, which is why catalytic grants are crucial for early-stage R&D, piloting innovations, and de-risking investments.

“We are really seeing at the Global Fund the importance of how we can best leverage catalytic grant financing to really help mobilize and unlock much larger scales of funding… to meet the ever-increasing health finance gap,” said Seonmi Choi, Global Fund Senior Advisor for Climate and Environment.

Break Down Silos Between Climate and Health Funds

Climate and health funding streams are often fragmented, yet a common investment framework can unlock cross-sector solutions and joint investments that neither side could deliver alone.

“We need to be cognizant that this is not just the health funds, but also the climate funds… and that we need to be able to work across them… ensuring they cater for more increased sources of financing,” said Tamer Rabie, World Bank Global Program Lead for Climate and Health, Health, Nutrition & Population. “Together with the Global Fund, the Green Climate Fund, the Rockefeller Foundation, the World Bank and IFC, we’ve been working on trying to set up a common investment framework… to operate across institutional cycles and create concrete co-financing opportunities.”

Government Leadership Makes or Breaks Co-Financing

Ministries of Health and Finance must co-lead from the outset to align investments with national plans and ensure long-term success. Without domestic buy-in, co-financing strategies often stall.

“Access to finance is an ongoing discourse that must happen between line ministries and ministries of finance. Ministries of Health need to make the case for why they need the resources, and how these resources are going to bring about the impacts that they see coming through reforms”, said Tamer Rabie, World Bank Global Program Lead for Climate and Health, Health, Nutrition & Population.

Philanthropy Unlocks Larger Investment

Grants work best when they close early-stage gaps such as product development or regulatory approvals, while also catalyzing larger contributions from governments, multilaterals, and the private sector.

“What we’re hoping with the climate-health catalytic fund is not to create a parallel mechanism or standalone funding mechanism, but actually really enable and trigger deep change,” said Seonmi Choi, Global Fund Senior Advisor for Climate and Environment

Local Context Must Drive Solutions

From slow-onset droughts to sudden disasters, climate-health impacts vary dramatically by place. Effective investment begins with listening to communities, frontline health workers, and national programs.

“We really need to unpack and demystify climate and health solutions in specific local contexts,” said Seonmi Choi, Global Fund Senior Advisor for Climate and Environment. “Nobody really made a real clear link between HIV and climate change… [but] Cyclone Freddy… has had long-lasting, devastating impacts on the whole cascade of HIV services… especially for young women and adolescent girls.”

Don’t Forget the Private Sector

Private capital can accelerate innovation, but it also requires de-risking tools like guarantees and concessional first-loss funding.

“It’s really important that we do not lose sight of the role of the private sector … and we ensure that we’re de-risking private investments in climate and health … we can bring in, for example, guarantees to reduce risks on private investments and push them more towards innovation,” said Tamer Rabie, World Bank Global Program Lead for Climate and Health, Health, Nutrition & Population.

Case Study: Indonesia’s Bold Path: How Local Leadership and Long-Term Investment Are Powering a Climate-Resilient Health Breakthrough

Dr. Adi Utarini, Professor of Public Health, Faculty of Medicine, Universitas Gadjah Mada, in opening remarks ahead of the panel discussion, showcased Indonesia’s Wolbachia success as an example of a community-based model aligning capital to tackle climate-driven health threats.

Dr. Utarani shared how researchers, over the past decade, have tested and refined the Wolbachia method to stop the spread of dengue fever, transforming a Yogyakarta-based study into one of the world’s most promising tools against climate-sensitive diseases. While Utarini said the journey has not been without challenges, she credits the risk-tolerant, venture philanthropy approach of partners like the Tahija Foundation for providing Indonesia the space to innovate, fail forward and try again.

Now, with plans to scale Wolbachia nationally to protect over 100 million people, Utarani stressed that grant funding remains essential, not just to enable innovation, but to crowd in broader investment from governments, development banks, and private partners.

“To build climate-resilience, we must align capital to risk across the full cycle of innovation – from discovery, to delivery, to scale,” said Dr. Adi Utarini, Professor of Public Health, Faculty of Medicine, Universitas Gadjah Mada. “This is what we are working toward in Indonesia: a country-led, community-based financing model that can be adapted and applied across region and diseases impacted by climate change.”

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News / Stories / Uncategorized - 07/31/2025

The Anatomy of a Deal: Be Girl & GCC | Investing in Menstrual Health for Girls

The Health Finance Coalition (HFC) recently worked with Be Girl, an innovative social enterprise changing the way menstrual health is addressed in Africa, to secure a new $500,000 investment from Grand Challenges Canada (“GCC”). Together, Be Girl’s CEO & Founder, Diana Sierra, GCC’s Equity Investments Lead, Brishan Rowjee, and HFC’s Swathi Rao discuss the step-by-step process of the deal’s transaction construction to expand access to Be Girl’s innovative products across Africa.

What health challenge do you aim to solve and how does Be Girl address it?

SIERRA: The health challenge Be Girl aims to address is menstrual health inequality, which encompasses both a lack of access to affordable, high-quality menstrual products and inadequate menstrual health education. These barriers often lead to girls missing school, feeling ashamed of their bodies, or facing long-term health risks. Be Girl addresses this by designing and distributing reusable, dignified menstrual products and by developing educational tools that help girls understand their bodies and make informed choices about their health. We believe that when girls have both the tools and the knowledge, they gain the confidence and opportunity to thrive.

Why was Be Girl interested in seeking more capital?

SIERRA: Be Girl is seeking more capital to scale what we already know works: high-quality menstrual products paired with impactful education. As a social enterprise, we maintain low margins to ensure affordability, but this limits our ability to invest heavily in growth. After testing and learning from a direct-to-consumer model in Mozambique, we pivoted to a business-to-business approach (partnering with governments, UN agencies, and NGOs), which has proven far more sustainable and impactful. To date, we’ve distributed over a million products and reached over 530,000 youth with menstrual health education. But we know that’s not enough. Our goal is to reach 1.2 million youth by 2030, and to do that, we need to scale faster and more efficiently. With additional capital, we can make that leap, transforming education delivery and reaching the next generation with tools that promote dignity, equity, and menstrual health literacy worldwide.

Could you walk us through the transaction construction support you received from HFC?

SIERRA: The Health Finance Coalition played a pivotal role in helping Be Girl become investment-ready to unlock new financing from GCC. While we had a strong track record in product design and implementation, we needed support to present our financials, growth model, and impact metrics in a way that would resonate with investors. HFC provided hands-on coaching in areas such as refining our financial projections, preparing investor materials, and stress-testing our business model. Just as importantly, they brought sector expertise, helping us articulate our value proposition within the broader health and gender equity landscape. This wasn’t just technical assistance: it was transformative. We were one of three companies selected to receive this support, and it positioned us to successfully close the transaction with GCC and prepare for long-term, scalable growth.

What did you learn through the process?

SIERRA: One of the most important lessons we took from this process was the critical role that financial sustainability plays as a business begins to scale. As a founder with a background in industrial design, I had deep expertise in product development and user needs, but less exposure to the financial frameworks needed for investor confidence and long-term growth. Through the Health Finance Coalition’s support, we gained a deeper understanding of our business from an investor’s perspective, asking and answering questions such as: What should our margins look like? What’s our true cost of goods sold? What does our growth model look like at scale? That insight was transformational. HFC’s support wasn’t generic; it was precise and high impact, more like a tailored consultancy than a typical incubator. We didn’t just leave with a pitch deck; we walked away with a stronger, more financially resilient business model. We also recognized the importance of generating more evidence to strengthen the case for investing in menstrual health. With partners like GCC, who are committed to long-term impact, we’re building momentum. But it’s clear that attracting more investors to this space will require continued proof of impact and commercial viability, and we’re now better equipped to deliver both.

What attracted GCC to Be Girl?

ROWJEE: GCC has been a long-standing partner to Be Girl, supporting their mission since 2018 with early grants aimed at launching and expanding operations in Mozambique. This partnership reflects our broader commitment to advancing menstrual health and backing innovative solutions in the sector. Since our initial investment, Be Girl has made impressive strides, scaling its impact well beyond Mozambique with initiatives in Angola, Ghana, and Egypt. Its impact profile remained strong, with over 1 million menstrual products sold, more than 530,000 youth educated, and five impact studies conducted by the time we considered a reinvestment in late 2024. In May 2025, GCC provided a new catalytic equity investment of $450,000, along with an additional $50,000 in technical assistance funding. This capital will support strategic hires across the organization, accelerate advancements on their online education platform, and launch a Zimbabwe pilot. We’re proud of the progress Be Girl has made and excited to continue our journey together, deepening our partnership to help scale their impact and reach even more communities across Africa.

What factors was GCC looking at to consider an investment with Be Girl?

ROWJEE: We begin every investment conversation with impact. Our lens is always: how many lives will this opportunity reach and improve, and which communities will it serve? Be Girl stands out as a menstrual health innovator that is deeply aligned with our strategy, values, and long-standing commitment to improving women’s health. As mentioned, Be Girl has a strong impact profile with significant lives reached and improved. From a business model perspective, Be Girl’s strength lies in its ability to deliver across the entire value chain by shaping national curricula in collaboration with governments, deploying multilingual educational platforms, and ensuring product access in underserved communities. We’ve also been impressed by their ability to pair innovation with adaptability, successfully shifting from a direct-to-consumer approach to a more scalable business-to-business model. Their leadership was another key strength. With a resilient CEO and a strong team supported by strategic governance and mission alignment, Be Girl has built the capacity needed to grow responsibly and sustainably. As they enter this next chapter, they do so with solid fundamentals, diversified revenue streams, and a healthy growth pipeline.

What will GCC be monitoring or looking for moving forward?

ROWJEE: At GCC, we define success by the real-world impact our investments deliver. We’ll be looking closely at how many products are reaching the hands of those who need them, which communities are being served, and how effectively education is being delivered, particularly in schools. It’s not just about reach, but relevance and equity. Together with Be Girl, we co-develop a clear impact plan and continue to track progress year over year. The goal is to ensure that every dollar we invest contributes to meaningful, measurable change in people’s lives.

What was the role of HFC?

RAO: The project initially began with Be Girl aiming to expand into the MENA and West Africa regions but needing extra capital. We started by doing market research to assess the areas where they wanted to grow and look at the feasibility. From there, HFC worked with Be Girl to refine and enhance their investment pitch deck, highlighting the economic and sector dynamics featuring the countries where they aimed to expand. HFC also helped put together the financial plan. But as the project progressed, HFC recognized there were shifts in the competitive landscape, so instead of prioritizing geographic location, HFC helped Be Girl shift its focus to retaining its existing market share and deepening penetration in its current markets. But that shift also required not only operational adjustments but a reassessment of the financial implications. HFC worked with Be Girl to design a new financial strategy and help to attract investor interest. As a result, HFC was able to help Be Girl demonstrate its ability to adapt to market conditions while maintaining a compelling growth narrative, which strengthened its investment appeal to GCC. Today, we are thrilled that Be Girl has successfully secured a new, substantial investment from Grand Challenges Canada to expand access to their innovative products across Africa. This investment from GCC allows Be Girl to enter a new phase of growth – one that will expand access to Be Girl’s innovative products and life-changing education programs across multiple countries in Africa. As Be Girl puts it, their work is about more than just products – it’s about giving girls power, voice and opportunity. We are proud that with continued support from mission-aligned partners like GCC, Be Girl is well on its way to achieving that vision—one girl, one classroom, one country at a time. 

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News / Stories / Uncategorized - 07/25/2025

Statement on Signing Agreement with Asian Development Bank to Partner on the ExCITD Initiative to Scale Innovations for Malaria, Dengue and Tuberculosis

MANILA, PHILIPPINES (8 July 2025) – Today, Malaria No More (MNM) and the Health Finance Coalition (HFC) CEO Martin Edlund issued the following statement upon the signing of a new Memorandum of Understanding (MoU) with the Asian Development Bank (ADB). Signed during the INSPIRE Health Forum’s Partnership Night in Manila, the agreement marks the start of a joint venture between ADB, MNM, and HFC under the Ending Complex and Challenging Infectious and Tropical Diseases (ExCITD) platform. The initiative aims to mobilize financing to help Asia-Pacific countries with the highest burdens of malaria, tuberculosis and dengue scale innovation and accelerate disease elimination.

We are honored to be on this journey with the Asian Development Bank as, together, we work to unlock much-needed catalytic capital financing for climate-sensitive diseases, starting with malaria and dengue. Across Asia and the Pacific, countries are facing a deadly resurgence of these diseases – driven by climate change and disruption to health systems. But the pipeline has never been stronger: Wolbachia, next-gen diagnostics and vaccines for dengue; dual-AI bed nets, malaria vaccines, and real-time surveillance for malaria.

This is more than a fight against disease—it is a chance to position Asia and the Pacific as a global hub for health innovation and manufacturing—closing financing gaps, building capacity, and enabling climate-resilient health systems. Now, countries need to scale what works.

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Uncategorized - 07/08/2025

Investing In Our Future: A Conversation with Cees Rustenhoven, Healthy Entrepreneurs’ Chief Financial Officer

In an interview with the Health Finance Coalition, Cees Rustenhoven, Chief Financial Officer with Healthy Entrepreneurs, discusses the critical role of innovative financing for scaling healthcare solutions.

How and why did Healthy Entrepreneurs start?

RUSTENHOVEN: The founder of Healthy Entrepreneurs, Joost Van Engen, first worked for a wholesale company that distributes medicines and health products in Africa and other developing countries throughout the world. In that time, he realized that if Coca-Cola can get its products just about anywhere Africa, why couldn’t you deliver medications or healthcare products more effectively. So, Engen started thinking about a kind of network or franchise, or even small kiosks, that could sell medicines and various products in more rural or desolate areas of Africa.

He pitched the idea as a business case for the company he was with, but they weren’t interested. So, he thought …what if I quit and start my own company? It was a bold idea but that’s how it started over a decade ago. First, we did a few assignments for a small NGO in the Netherlands. Then we got grants from the Ministry of Foreign Affairs to serve a company in Africa.

And it was in that early start that I joined Healthy Entrepreneurs, because they were wanting to bring onboard someone who could manage the financials. So, we continued that journey, scaling up the company, particularly these last couple of years. Now, we are active in seven different countries.

As a business model, what has been Healthy Entrepreneurs’ evolution? What have you learned through the process?

RUSTENHOVEN: We have improved quite a lot. But the changes we’ve made weren’t something that just happened in a day. But over the years, we have evolved and now do things completely differently from when we first started. For one, we came to appreciate that it’s really community health workers who are the heart of any community and are trained and already registered by local governments. They’ve become the basis for our business. We recruit, train and make them community health entrepreneurs. We do that in close collaboration with local health authorities. We essentially sell our products to community health entrepreneurs, and they, in turn, sell the products to the end customer.

For us, it’s not about sales, as much as it’s about engagement, because we know that these entrepreneurs need to be engaged with the community for this to work. It’s not just about asking someone if they are ready to place an order. It’s more. You need to sit next to them, listen to them, coach them, and support them in doing their own business. If we do that, then the sales increase automatically. So that model now determines the people we are recruiting for this type of engagement.

Healthy Entrepreneurs has also used an outcome-style convertible note model? Can you explain more?

RUSTENHOVEN: That’s been an important step in the process. In 2020, we had our first financing round, and our initial investors were willing to invest more than half a million dollars into Healthy Entrepreneurs. Then, we negotiated the interest percentage and how much it would increase year over year. But it’s a loan that’s not part of your equity. Therefore, we also agreed to a certain profit sharing. So, at the end, if we are reaching a certain EBITDA level, meaning “earnings before interest, taxes, depreciation, amortization”, they would get a certain, part of the profit.

On the other hand, if we reached specific impact targets, then that resulted in a lower profit sharing.

So, that model served as a stimulus for us to reach social impact because there’s also a financial benefit for the company.

At the same time, we only want to have investors on board who are interested in the social impact and not only there for financial benefit.

Not many companies are making these types of agreements but it’s truly a win-win model. The loan, profit sharing and the social impact all come in together to achieve more healthcare solutions.

What would you say about the role of innovative or blended financing structures on scaling healthcare solutions?

RUSTENHOVEN: If you look at our business case, we are dealing with community health entrepreneurs who are living in desolate and rural areas of Africa. People there often earn just $1 or $2 a day. So, most orders being made by our community health entrepreneurs are often relatively low.

So, our business case is not the strongest commercial business case. We’re focused on the social business case. But still, there is a business case. Between the combination of public funding and commercial funding, it becomes a more sustainable business case than all the NGOs actively dealing with community health workers.

A couple of months ago, I was in Uganda, and I spoke to someone from an NGO that focuses on community healthcare. And they said, our Healthy Entrepreneurs model has essentially never-ending projects since our model is based on community health workers or entrepreneurs who remain in communities and can making a living from their business. Of course, not all our entrepreneurs reach that level of success, because some are higher performers than others. But still, there are quite a number of entrepreneurs who can make a living from their business and have a sustainable business model opening doors in the most rural areas of sub-Saharan Africa.

So, for us, that combination really makes this model extremely powerful, and opens up opportunities to scale healthcare using this network of community health entrepreneurs.

We can also finance innovations and new approaches, which is something we’ve done for communicable diseases, NCDs. We set up a closed supply chain to pick up orders from chronic patients through our call centers. We now have doctors on the payroll who can write prescriptions, and we can distribute medicines with a simple barcode scanned by a smartphone. We make sure each community health entrepreneur has a smartphone, where he or she can place online orders, and ensures the correct order is distributed to the appropriate patient.

That happens through public funding. But when we scale up, we need working capital. We then add in some commercial funding into our company so that we can continue to scale our business model.

What other innovative healthcare solutions are in the pipeline?

RUSTENHOVEN: We know the smartphone is increasingly being used also to register housing data of people living in the most desolate places. For example, the Electronic Community Health Information System (eCHIS) is digitizing community health information registered on household level. It’s expected that these information systems will play a critical role in measuring the performance of healthcare delivery and generating the necessary data for program monitoring, planning and evaluation. And it’s that kind of system that community health workers will then use to register every single household in each desolated village in Africa.

We are also seeing an increase in health apps with counselling services, videos and different tools for measuring vitals. Ultimately, what we would like to see, is a central database for all this information. Because, when we know the demands or the health needs of customers, then we can, in turn, provide the necessary products and services.

For those who haven’t considered innovative financing structures, what would you say?

RUSTENHOVEN: We thought that we were only making the margin, on the sale of products. But through the sale of our products, we are also making an impact.

Now, when an NGO comes to us and wants to try out a health intervention, we already have a network for scaling up. So, this network has a certain value. It’s not just about selling products and earning margin. It’s more about this network of community health entrepreneurs which can be used for health interventions.

For example, we distributed a product that is an injectable contraception. In Africa, if a woman gives birth four or five times, many times the sixth can be fatal. In order to prevent that, they get this injection and are protected for several months. So, we have partnered with an NGO that now pays us to distribute this injection and train our community health entrepreneurs to give this kind of an injection to women. That’s a good example of how we can use this network to scale a healthcare solution and achieve more social impact.

It is still quite cheap to distribute, but now we’re seeing more governments getting involved and wanting to use this type of network.

But this all stems from a combination of public and private funding – combining commercial funding for the working capital and public funding for startup and innovations. This way, you get a combination, which makes it more powerful and sustainable. The result is a larger network that is maintained and supported by community health entrepreneurs in the most remote areas of Africa.

After more than a decade of doing this work, I think we’ve developed a very stable business model with community entrepreneurs who will be with us for decades to come.

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News / Uncategorized - 11/25/2024

ASTMH 2024: A Discussion on Financing Private Sector Innovations in the Era of Antimalarial Resistance

Last week in New Orleans, the Health Finance Coalition was invited by Maisha Meds, a digital health organization, and Jhpiego, a global health non-profit organization, for a side event on the sidelines of the American Society of Tropical Medicine and Hygiene (ASTMH) annual meeting.

In a discussion facilitated by the Gates Foundation’s Abigail Pratt, panelists – including HFC’s Alex Honjiyo – explored how innovative financing methods can effectively engage the private sector to catalyze the scale of innovations to fight antimalarial resistance.

Malaria financing has become increasingly challenging
Panelists discussed how over the past five years external financing for malaria has plateaued and, in some cases, decreased. This stagnation in donor support and ongoing gaps in malaria funding highlight the urgent need to develop new and innovative mechanisms of financing implemented at the global, regional, and country levels.

“Financing solutions are very important because they are a way for sustainable financing to provide quality malaria services to the most vulnerable,” said Dr. Samwel Lazaro, Head of Tanzania’s National Malaria Control Programme.

This was echoed by Dr. Maria Dieci, Emory Rollins School of Public Health, who highlighted that “the current ways, where funding is coming from, are going to continue to be constrained and will continue to pose challenges going forward.”

Leveraging the private sector offers a path to more sustainable financing
Panelists also discussed how countries and development partners are increasingly looking at market-based approaches and investments from the private sector to help bridge gaps in both malaria resources and expertise to sustain results and accelerate progress.

National, public sector malaria programs recognize this need. During the panel discussion, Dr. Lazaro underscored this challenge, stating that “we need to bring the private sector onboard, so they become part of the solution making. Under the current financing mechanisms, we are not able to engage the private sector appropriately,” said Dr. Lazaro. “We need to rethink how we get the funding solutions that would be sustainable to the private sector but are also complementary to working with governments. We have to make our policies friendly to the private sector.”

“We will need to be more creative in how we think funding and financing for the malaria fight as we continue to seek elimination” said Alex Honjiyo, Deputy Director of the Health Finance Coalition. “At the Health Finance Coalition, when we think about engaging the private sector, we are constantly looking to engage a wider range of investors and implementors to achieve the world’s global health goals,” said Honjiyo. “Often as we look to de-risk investment, we are thinking about what kinds of financing and funding mixes could make the global health sector or malaria interventions more attractive for private sector investors. At HFC we call this a capital stack approach. Similarly, public-private partnerships can extend the impact of public sector anti-malaria programs while creating space for return-seeking investment.”

Outcome-based financing models offer solutions for financing malaria programs
Outcome-based financing models, or performance-based, can be used to improve malaria programs by aligning financial incentives with public health goals, panelists agreed. “It’s basically procurement reform at a very basic level,” said Honjiyo, “governments engaging in a public-private partnership, contracting a service from a non-profit or company.”

While often complex, panelists agreed that outcome-based financing models are an effective tool for yielding both effective health outcomes as well as potentially new funders for the malaria fight. “These outcomes funding methods open the door for impact investors to get involved, expanding the pie for potential investors in this space” Honjiyo said.

A benefit of outcomes funding models is that they are inherently driven by the achievement of impact metrics. “Financing should be driven by the outcomes that we want to do,” said Dr. Maria Dieci, Emory Rollins School of Public Health. “Ultimately, we need to be nimble to adapt to changes and outcomes funding can be the guide… An important pillar of any financing proposition that we think about has to include targeted interventions that are driven by an incentive to change the behavior of last mile providers patient and or improving diagnostics. Outcomes funding models are a great way to achieve this.”

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Uncategorized - 11/20/2024

Investing In Our Future: A Conversation with Noorin Mawani, Co-lead of the Transform Health Fund

In an interview with the Health Finance Coalition, Noorin Mawani, co-lead of the pan-African recently- closed Transform Health Fund (THF), discusses the fund’s innovative blended-finance structure, which aims to bolster healthcare systems in Africa by scaling proven and innovative healthcare models. Earlier this month, AfricInvest and The Health Finance Coalition (HFC) announced the Transform Health Fund exceeded its initial target in its final close, raising $111 million, through commercial, public, and private donor investments.

What makes the Transform Health Fund unique?

MAWANI: What makes the THF unique is its investment strategy that focuses on reaching low to middle income patient populations in Africa which today lack accessible and affordable healthcare

Too often, healthcare investments target companies serving middle- to high-income patients. That’s been for a few reasons: First, investors with high target returns tend to focus on patient populations with a dependable ability to pay. Unfortunately, in many African countries, less than 10% of the population has private health insurance. And while public healthcare systems dominate, many people rely on out-of-pocket payments for medical expenses, and yet to not have the means to cover them. The second reason healthcare investors target companies with higher income patients is geographical. These companies are typically located in large cities and so they are better known.

THF’s focus on low-income patient populations is made possible by a blended capital structure at the Fund level, that allows us to focus on companies expecting moderate returns.

Can you describe how blended financing is used?

MAWANI: With blended financing, different types of capital (with different return requirements) are combined into one fund structure. In more traditional funds, there is just one type of share class for all investors who all receive the same terms.

By combining investors with different risk and return expectations, it is possible to “grow the pie,” or catalyze investors who may not have otherwise had the risk appetite to invest, and providing the opportunity for Africa to see a greater share of international capital flows.

Where does the Transform Health Fund fit into the health financing ecosystem?

MAWANI: The health financing ecosystem is extremely wide, spanning donors who give philanthropic grants to larger institutional players like UNICEF, the US government, PMI Healthcare and many others.

I think about the providers of finance on a continuum of returns. On one extreme, there are those who do not expect even the return of their principal, providing grants and donations. Many are motivated by the belief that the provision of adequate healthcare is a basic human right, and grant financing is sometimes required to help ensure this

In the middle, there are those interested in supporting health in emerging markets given their development impact agenda, who still require a rate of return, but perhaps not a fully market adjusted rate of return. Think of a development finance institution – e.g., BII or IFC. They use limited taxpayer money to drive development in the least developed nations across the world but require a return to sustain their ability to invest.

Moving across the spectrum, the financing available becomes increasingly commercial in nature. Market returns are expected and while impact is an important outcome, it is not necessarily the primary intention of the investment.

This continuum is a necessary feature of the healthcare finance ecosystem. There are some parts of the market, some subsectors, some geographies, where pure commercial investments are unavailable, and philanthropic capital has a critical role to play.

In my view, there is a place for all types of capital – across geographies and across different subsectors. However, it is critical that the right capital is being used for the right kinds of projects. Commercial money should not be used for something that should have been funded by grants, potentially leaving commercial investors disappointed. At the same time, using grant or donor money for a commercial investment is not an efficient use of precious grant dollars.

That’s the challenge for us all making sure we’re matching our capital and the requirements of our capital to the type of risk and expected return of the projects.

What does it mean to be impact focused? And where do you see the most healthcare impact?

MAWANI: For me, being impact focused is basically identifying the kind of impact you’re trying to achieve, and then aligning your internal processes, your fund governance, and your incentives to achieve that objective.

For example, we consider ourselves impactful, because we’ve stated what our impact policy is, and we have a way to govern that. We have an investment committee process that considers impact votes on whether a project is sufficiently impactful.

We also have incentives tied to impact. For our investors and for ourselves, it is not enough to just deliver financial returns and so it is only fair that our incentives are ties to impact.

What challenges exist for scaling healthcare innovations in Africa and deploying capital?

MAWANI: One of the challenges we face, like other sectors in Africa, is the ability to pay. To increase access to healthcare services, either the services must become more affordable or the patient’s ability to pay must improve.

The challenge in Africa is that both of those are difficult. It’s hard to bring down the cost of healthcare, especially since he primary input into the cost of healthcare is labor. There are just not enough trained medical staff on the continent. And even those trained in the medical profession on the continent are tempted to leave for other markets where there’s more financial opportunity.

The other big challenge is the cost of drugs and pharma. Africa doesn’t manufacture adequate supplies of pharmaceutical products for its population and while there are efforts to encourage local production, many barriers still exist: The cost of energy is high, financing isn’t always available, and prices of products from other emerging markets are extremely competitive.

On the other hand, helping to improve a patient’s ability to pay is typically driven by two things: First, increasing income, a variable that it not in the control of healthcare investors. Secondly, increasing the availability of health insurance. While improvements in this regard are underway in some markets, it is a long road, and often requires government intervention and regulatory support.

Despite these important challenges, they are part of what makes African healthcare investing so exciting and such a big opportunity.

That’s where the innovation comes from, particularly companies targeting decreases in the customer cost of care.

With this final close, would it be fair to say you’re optimistic?

MAWANI: Definitely. I think we’re very optimistic because of achieving this final close of THF for an amount surpassing our target. As you can see, the is a great deal of interest and drive from investors to finance companies providing innovative solutions to some of Africa’s most pressing healthcare challenges.

And from the investments we’ve made so far, we’ve found incredible opportunities to solve for affordability. Still, this is by no means an easy sector. But we’ve found really strong entrepreneurs who are finding ways to drive innovation.

Finally, we are inspired by our investors, because at the end of the day, we’re a conduit for their money. It’s still their money and they’re still taking the risk.

So, our optimism is driven by both investors, as well as the hard work being done by the entrepreneurs themselves. While we are pleased with the success of the Transform Health Fund, investors and entrepreneurs are really the ones that are going to solve Africa’s healthcare problem.

Financing is just one piece of the puzzle that we try to unlock for them.

Q: Can you talk about Health Finance Coalition’s Transaction construction role in the fund? How does HFC’s support enhance THF’s investment process?

MAWANI: The Health Finance Coalition (HFC) plays a crucial role in structuring transactions that drive the development and execution of investment opportunities, strengthening THF’s pipeline, value proposition to companies, impact, and overall fund performance. HFC provides healthcare companies with strategic, financial, impact, and transaction structuring support, offering customized solutions that enhance their readiness to attract investment from partners like THF.

A recent example of this work is HFC’s collaboration with THF’s investee – Lapaire, an optical retailer operating across Africa. HFC assisted Lapaire in assessing strategic, high-impact opportunities designed to generate sustainable financial and social outcomes. By aligning management on the optimal strategic growth path, HFC helped Lapaire maximize impact while safeguarding THF’s investment value.

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News / Stories / Uncategorized - 10/21/2024

Investing In Our Future: A Conversation with Rowena Luk, Founder of Africa Health Ventures

In an interview with the Health Finance Coalition, Rowena Luk, founder of Africa Heath Ventures and host of “The Africa Health Ventures Podcast”, discusses investing in early-stage health ventures in Africa.

News / Stories / Uncategorized - 08/27/2024

Director, Deal Construction

The Health Finance Coalition is seeking an exceptional, entrepreneurial leader to help build and scale its vision of transforming the landscape of health investments across Africa.

Uncategorized - 07/18/2022

Uncategorized

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