A cross-sector partnership between Deutsche Bank, the International Agency for the Prevention of Blindness (IAPB) and Ashoka is developing Eye Fund 1, which will provide loans and guarantees to support the development of affordable, sustainable and accessible eye care for the world’s poor. The $20 million debt fund will finance the scaling up of eye-care hospitals in developing countries. Originally announced at the Clinton Global Initiative meeting, the partners hope that Eye Fund 1 will be launched by the end of this year.

There are an estimated 37 million blind people worldwide, 90 per cent of whom live in the poorest countries. Each year, that number increases by 1 to 2 million, yet it is estimated that 75 per cent of these cases are treatable and/or preventable. Eye-care hospitals in developing countries often have the means of treating these cases, but they are limited by reliance on donor funds. Access to debt financing can therefore help to scale up their treatment model and significantly increase outreach to the poorest patients.

The role of the partners

The initiative will operate at the lowest interest rates possible without deterring investors. To this end Deutsche Bank has developed a risk-sharing financial structure to provide eye-care hospitals with investment capital at a near-market interest rate close to 6 per cent. This will be achieved partly by having foundations accepting return of money only. Deutsche Bank has structured similar funds to help scale up the microfinance sector, aggregating philanthropic capital with investors seeking a commercial return. The Bank and its partners have already approached social investors, who have demonstrated great interest in the fund and are considering significant subordinated investments in the forthcoming months, as well as commercial investors.

A complementary grant fund will also be established to provide the technical assistance, business planning and training that eye-care facilities need to be effective.

A key role for IAPB has been raising interest on the demand side through its extensive network of eye-care hospitals. As a result, Eye Fund 1 has already evidenced strong demand. As at 15 March, ten self-sustainable eye-care programmes have shown interest and four have completed applications: Operation Eyesight, a Canadian organization focusing on eye health in the developing world; Sankara Nethralaya in India; Fundación Visión in Paraguay; and the Eye Foundation Hospital in Nigeria.

Ashoka, meanwhile, has supported IAPB with its marketing, acted as a liaison between the financial and social sectors, and provided advice on the structure of the Eye Fund.

The initiative is also something of a testing ground for Ashoka in particular, which hopes that the techniques that are developed for Eye Fund 1 and follow-on funds that will serve this sector will increase the ability of the social sector to ‘package’ investments in sufficient volume to look interesting to the financial markets.

For more information
Visit the Eye Fund website at http://synapse.comatindia.com

Contact Gary Hattem, Managing Director, Deutsche Bank Community Development Finance Group at gary.hattem@db.com