AfDB invests $10m in Pan-African healthcare fund
The board of directors of the African Development Bank (AfDB) has approved a $10-million equity investment in Razorite Healthcare Africa Fund 1 (RHAF1) to help improve healthcare infrastructure delivery across the continent.
The 10-year investment enables RHAF 1 to address growing demands for affordable and quality healthcare services in several countries of Sub-Saharan Africa (SSA, which faced lack of access to low cost, first-class healthcare.
RHAF1, to be registered in Mauritius, will provide growth capital to operating healthcare infrastructure facilities which show high potential for growth, as well as build new facilities, where identified as necessary. To date, there have been over 9,000 cases of Covid-19 in Africa and over 500 deaths.
AfDB had, last week, unveiled a Covid-19 Response Facility that will mobilise up to $10 billion to assist regional member countries in fighting the pandemic. The facility will be the institution’s primary channel for addressing the crisis.
The advent of Coronavirus has highlighted the need to boost Africa’s healthcare infrastructure system to curb the spread of the pandemic and any future similar crises and build long term resilience. Healthcare-focused private equity funds in Africa with the capability to build equipment and an integrated eco-system across healthcare facilities and service providers are very limited. Target groups include low and middle-income class and vulnerable sectors.
The Fund is expected to increase bed capacity in Africa by over 1,500 and create over 500 jobs over its life span. It will also support the development of local enterprises and private infrastructure in the healthcare infrastructure sector. The Fund targets final capitalisation of $100 million.
AfDB expects its equity investment of $10 million to catalyse financing from other development finance institutions (DFIs) and commercial investors. As an advisory board member, AfDB will ensure that the Fund and its portfolio of projects adhere to social, environmental and corporate governance best practices.