Investing in healthcare companies in developing countries creates opportunities for more people to receive care from these enterprises. At the same time, the right conditions are created for retaining medical expertise in the country and can be passed on to other doctors and medical establishments.
In 2018, Swedfund invested USD 5 million in the TLG Credit Opportunities Fund (TLG). TLG is an experienced fund manager which is working to bring growth capital to the poorest countries on the African continent. The focus of this particular fund is on bridging the funding gap for SMEs in the health and financial sectors.
One of the companies that TLG has long invested in is Snapper Hill Clinic (SHC) in Monrovia, Liberia's capital. Liberia is one of the world's poorest countries, partly because of the civil war which lasted until 2003 and cost the lives of more than 200,000 people. Most of the country's medical establishments were badly damaged or completely destroyed during the war. Liberia's health service was therefore not equipped to deal with the Ebola crisis, which lasted between 2014 and 2016. Life expectancy in Liberia is lower than the global average and one in three children suffers from malnutrition.
Snapper Hill Clinic is an outpatient clinic in Monrovia. The clinic was opened in 1983 and was the only private clinic to remain open during the Civil War and the Ebola crisis. Today, the clinic has 15 employees and is planning to expand further through the addition of more clinics and services, and to increase the number of patients being treated from the current 15,000 per year to 50,000.
“Liberia's health and care system is fragile, and health indicators are poor. By improving the quality and digitalisation of a private clinic like SHC, the development of expertise is passed on within the clinical enterprises and helps to boost the expertise of medical professionals in Liberia,” says Varsay Sirleaf, CEO of SHC.
Liberia is one of the world's most difficult countries to do business with and run a business in, partly because of widespread problems of corruption, poor infrastructure, electricity and skills.
"Swedfund still sees opportunities to support companies in this difficult environment, while acting as a catalyst for other development finance institutions and institutional investors to invest in the country's health and care sector. It also aims to promote higher standards of quality within healthcare. Swedfund was the first institutional investor in TLG,” says Maral Browaldh, Senior Investment Manager at Swedfund.
In 2018, Swedfund awarded funding for Technical Assistance (TA) to enable SHC to establish national standards for qualitative healthcare, and thereby inspire the private sector to become involved in the country's health development. The funding has been used to digitalise patient processes, improve the quality of care and waste management at the clinic and strengthen the hospital's organisational and financial control, so helping to improve access to high-quality primary care across the rest of the country.
At the end of 2019, Swedfund granted additional TA funds to SHC. The aim is to reduce the clinic's environmental and climate impact and boost profitability. The clinic will use the funds to install solar panels and rainwater collection technology. The new technology will replace the existing system, which is based on filling the clinic’s water tank using diesel-powered tanker vehicles and electricity which primarily comes from diesel generators due to the substandard quality of the national grid.
Swedfund's TA funds have been crucial for SHC, particularly as regards projects which do not belong to the clinic’s core business, such as solar energy for use by the clinic. Given the challenges ahead, SHC wanted to move away from expensive diesel-powered generators which are harmful to the planet. The TA funds from Swedfund have helped SHC to maximise the quality of the projects and the impacts, thanks to
Swedfund's support through management, policy development and capacity-building.
“By the end of the civil war, Liberia had lost 95% of all its doctors. Even day, there is a considerable shortage of qualified doctors, medical equipment and healthcare professionals. This investment has given Snapper Hill Clinic a much-needed boost, which will ultimately enable SHC to deliver better quality healthcare to the country's population. Swedfund's TA funds have supported SHC and had a positive impact on a very weak healthcare system,” says Isha Doshi, CFO of TLG.
Swedfund sees the funds that we invest in as a long-term partnership, where the managers we work with have a high level of expertise in both the markets and sectors that we focus on. When we decide to invest in a fund, we carry out a detailed review with a focus on the fund manager, past performance, investment strategy, sustainability issues, and legal and economic structure. An agreement is then drawn up to regulate what is expected of the team, how the capital is to be allocated and the ESG Action Plan established by Swedfund, and identify a number of development areas for the fund. Amongst other things, this has led the company to set up a social and environmental management system, adopt a sustainability policy and improve its due diligence process.
"TLG has always believed that economic returns and social development can and should go hand-in-hand. With Swedfund's support, TLG has also stepped up its efforts to target community development and strengthen the ESG dimension of the investment process. With the help of TA funds, we have also been able to strengthen value creation for the companies in which TLG invests," says Isha Doshi, CFO of TLG.