The current healthcare sector in Africa is heavily underserved. 11 per cent of the world’s population lives in Sub-Saharan Africa, but while they hold 24 per cent of the global disease burden, they only spend one per cent of the health costs.
A new company, Hospital Holdings Investment, will contribute to increasing investments and improve access to quality treatment in Eastern and Southern Africa. The strategy is to set up new hospitals and health clinics and to acquire existing facilities which can be modernized and expanded.
The company’s first investment is in AAR Health Care an existing company serving more than 700,000 patients annually in Kenya, Uganda and Tanzania. The annual number of patirnets will increase to 1.2m through expansion and modernization.
“To improve living conditions in Africa there is a great need to increase access to health services and improve the quality. We contribute to that through our investment in Hospital Holdings Investment.”
Torben Huss, CEO, IFU.
Insurance schemes are growing
In general, there is a growing demand for healthcare services, which is primarily driven by an increasing middleclass, growth in insurance schemes and improved government expenditure. In Kenya, the National Health Insurance Fund has been reformed, which has resulted in the ability for the insurance scheme to pay reasonable prices for a wide range of procedures in public and private hospitals. Today, the compulsory health insurance in Kenya has more than 7.6 million members and in total covers over 25 million people, which is about half the population.
In the other target countries Uganda, Tanzania and Zambia, national health insurance schmes are also being set up and improved to cover more people across different income groups. Hospital Holdings Investment will align its business with the different insurance schemes and provide an important supplement to public facilities.
In addition to improving the healthcare sector, it is expected that Hospital Holdings Investment will create 1,300 jobs and provide professional staff training.
Contributes to SDG 3
The primary objective of the Danish SDG Investment Fund is to contribute to the fulfilment of the 17 UN Sustainable Development Goals. The focus of Hospital Holdings Investment is SDG 3, which aims at achieving universal health coverage, including access to quality essential health-care services at an affordable price. This especially applies to developing countries, in which, according to SDG 3.c, a substantial increase in health financing and recruitment, development, training and retention of the health workforce must be achieved.
The investment also contributes to SDG 4 and 8 through training of the employees and decent jobs.
DFIs are providing finance
Several Development Finance Institutions are providing the main share of the total investment of DKK 750m. These are IFC, Finnfund, Swedfund, Proparco and the Danish SDG Investment Fund, with the latter investing DKK 60m in share capital.