46743 - Transform Health Fund

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Summary of Investment Information

Project Number

46743

Company Name

Transform Health Fund LLC

Date SPI Disclosed

Oct 19, 2022

Country

Africa Region

Region

Africa

Projected Board Date

Nov 30, 2022

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Aug 18, 2023

Department

Regional Industry - MAS Africa

Industry

other

Previous Events

Approved : Dec 16, 2022
Signed : May 24, 2023
Invested : Aug 16, 2023

Sector

other

Project Description

The proposed project consists in the establishment of the Transform Health Fund (“THF” or the “Fund”), a high impact healthcare focused debt fund. THF will seek to provide growth financing to and scale innovative care delivery models and supply chain businesses in the healthcare sector in Africa to achieve public health goals and improve resilience of the health infrastructure in the continent

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	15.0

Development Impact

The project will promote access to growth capital for Fund investees in a number of Sub-Saharan African countries. By providing investees with needed financing it will support them to respond to the large gap in the availability of appropriate quality health services and products in these countries. Many of the investees would otherwise face challenges accessing finance. By providing financing to these companies the project will thus expand access to healthcare services and products. Providing support to these companies can be expected to have broader impacts on the markets they operate in and so strengthen these markets competitiveness and resilience.

IFC’s participation in THF is timely and much needed given the challenging fundraising environment in Africa as a result of the economic fallout of the COVID-19 pandemic and suppressed investor sentiment, now somewhat recovering since 2021. The role of IFC will help to promote and facilitate the participation of third-party investors in THF and will enable the team to access the much-needed private sector funding for the scaleup. IFC’s involvement in helping to mobilize financing from international investors and development institutions will be a critical endorsement of the Fund’s credibility. Further IFC has various forms of non-financial additionality. This includes supporting the fund on E&S and corporate governance, as well as providing access to IFC’s global and regional industry knowledge and networks in the target investment sectors.

E&S Category Rationale / Risks and Mitigation

The project entails an investment in preferred/senior shares to establish the Transform Health Fund, a healthcare-focused structured debt and impact fund. The Fund will provide debt and quasi-equity to innovative care models (e.g., clinics, laboratories, specialty offerings), supply chain transformation players (e.g., medtech manufacturing and distribution, tech-enabled pharmaceutical procurement and delivery services), and digital models (e.g., insure-tech, health financing, data management) across the African continent. Typical E&S risks associated with these activities include labor and working conditions, occupational health and safety, and waste and hazardous waste management, among others. The sub-projects to be supported under the project are expected to entail medium E&S risks. The Fund will not invest in any activities on the IFC Exclusion List, coal-related activities and/or higher risk business activities that may include (a) involuntary resettlement, (b) risk of adverse impacts on Indigenous Peoples, (c) significant risks to or impacts on the environment, community health and safety, biodiversity, cultural heritage, or (d) significant occupational health and safety risks. The proposed investment is thus categorized as Category FI-2 according to IFC's Sustainability Policy. The applicable E&S requirements for the project will be the IFC Exclusion List, host country laws and regulations, and the IFC Performance Standards. The main E&S risks and impacts of the project derive from the Fund's capacity to identify, assess, and manage E&S risks and impacts associated with prospective investee and portfolio companies.

The Fund Manager is an existing IFC client and has developed an E&S management system which applies to the Fund's financing activities. The E&S risk assessment and management process includes screening prospective transactions against the Fund's ESG Policy and Exclusion List, identification of E&S risks and initial project E&S categorization, E&S due diligence assessment, development of mitigation measures to manage the E&S risks identified, inclusion of E&S clauses into the investment agreements, and monitoring of investees' E&S performance. The ESMS also includes a set of E&S risk management tools and guidance. The applicable E&S requirements include the Fund's Exclusion List (in line with IFC's Exclusion List), national and local environmental, health, safety, and labor laws and regulations, the IFC Performance Standards, ILO Core Conventions, and the WBG EHS Guidelines. The Fund Manager has developed and implements an external communication mechanism. The E&S management system implementation is led by a core Responsible Investment team, including a dedicated E&S officer and trained staff, and supported by third-party E&S experts. Investment staff undertake regular E&S risk management training. IFC will review the first three ESDDs, ESDDs for all Category A investments, if any, and any other ESDDs deemed necessary to support the ESMS implementation (prior to the Fund's investment). The Fund will additionally be required to disclose externally its Category A and Category B projects on a yearly basis, including their names, sectors and locations.

Contacts

For Inquiries About the Project, Contact

AfricInvest Global Manco
Mr. Skander Oueslati
Senior Partner & Chief Investment Officer for Sub-Saharan Africa
+230 468 7310
skander.oueslati@africinvest.com
5th Floor, Nexsky Building, Ebene, Cybercity, 72201, Mauritius
www.africinvest.com

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