Of all the many intractable health problems in Africa, blindness is one that should be relatively easy to address. As in more developed countries, blindness in Africa is often caused by cataracts, which can be removed in a simple, inexpensive surgery. But too many people go without this quick, sight saving surgery. Blindness is twice as common in Africa as it is worldwide and 80% of the cases of blindness in Africa are treatable
While donor organizations and investors often support projects to expand access to healthcare in Africa, sustainable and scalable solutions to public health challenges like widespread blindness require more than just money. First, these projects need to be structured in a way that will ensure they reach the people most in need of support. There should also be some sort of accountability mechanism to track progress against goals set at the outset – including both financial and social targets.
The Overseas Private Investment Corporation (OPIC) recently committed a $2 million loan to the Africa Eye Foundation to support a hospital in Cameroon that aims to prevent blindness in as many as 18,000 people. The project's strong promise is rooted in its innovative structure, which is designed to support accountability and long-term success for the hospital, its patients, as well as investors and donors. OPIC is the U.S. Government's development finance institution and its support for this project in Cameroon builds on a long history of developing and embracing innovative finance tools to help address major world challenges. Some of the innovations in this project include:
• A model that subsidizes poorer patients. The hospital, the Magrabi-ICO Cameroon Eye Institute, uses a cross-subsidization model in which more affluent patients pay more than lower income patients, so that it can serve patients across the economic spectrum. It's a simple but important model that is particularly important in regions where many people cannot afford this important surgery.
• Strong incentives to meet social impact goals. The project is structured as a Development Impact Loan, a results-based contract in which investors, such as OPIC, provide financing up front and are repaid by donor organizations in amounts that will depend upon the project's success meeting not just financial goals but also social goals. OPIC is providing most of the upfront financing and its return will depend in part on how many people in Cameroon receive this sight saving surgery. This project has a diverse coalition of donors, or outcome funders, including the Conrad N. Hilton Foundation, the Fred Hollows Foundation and Sightsavers, an NGO focused on preventing avoidable blindness. OPIC sees Development Impact Loans and Bonds as a powerful tool to increase private sector investment in support of major development challenges.
• Support for promising young projects. In global development, sometimes the best solutions come from new players. OPIC is supporting this project in Cameroon through its Portfolio for Impact, or PI program, which we designed to finance some of the most promising earlier stage enterprises that show a strong promise for making a significant social impact. Today, OPIC's PI program supports a diverse group of small, high impact projects in developing countries from a microfinance institution that lends to rural farmers in Africa, to a Colorado company that manufacturers clean cook stoves to replace cooking on open fire that is a major source of pollution. Through the PI program, we've established that small projects can have an outsize impact and even small amounts of financing can go a long way to making a positive difference in the world.
Our loan to the Africa Eye Foundation is one example of a relatively small loan having the potential to touch thousands of lives. This latest project to support eye care in Cameroon builds upon the early success of the PI program and represents the first time we've supported a Development Impact Loan that provides a financial incentive for making a positive social impact. We're excited to embrace this new financing structure and look forward to supporting further innovations in development finance.
Dia Martin, Director, Social Enterprise Finance, the Overseas Private Investment Corporation