Sightsavers and its partners have unveiled a new way of funding health care in low and middle income countries, with the aim of providing up to 18,000 cataract operations in Cameroon over the next five years.
The Cameroon Cataract Development Impact Loan will bring together public and private investors alongside eye care delivery experts and charities, including Sightsavers.
The loan is a type of Development Impact Bond (DIB), in which investors provide financing for social programmes upfront. Donor organisations then repay investors their principal plus a return based on performance.
These types of social impact bond are already used in countries including UK and the US, but this is one of the first times they have been used in a lower middle income country such as Cameroon.
The loan will provide the funding for a new eye hospital, The Magrabi ICO Cameroon Eye Institute, owned by the African Eye Foundation. As well as providing vital cataract surgery, the hospital will train eye health professionals from across the region, helping to strengthen local health systems and ensure they are self-sustaining.
The loan, coordinated by D Capital Partners, brings together two investors: US government agency the Overseas Private Investment Corporation and the Netri Foundation, a private Spanish charitable organisation, who are providing $1.75 million and $250,000 respectively. After an agreed period of time – in this case five years – the investors are paid back their investment, plus a return based on how well the hospital meets its targets.
Sightsavers, Fred Hollows Foundation and the Conrad Hilton Foundation are the outcome funders, which means together they will provide the funds to repay OPIC and Netri at agreed points during the term of the bond.
This method reduces the financial risk to all the partners involved, and could provide a way to attract more resources for eye health in low and middle income countries.