I look forward to moderating the session at the Healthcare World Festival on 4 May when experts from diverse backgrounds will discuss this complex subject from a variety of perspectives. I am not going to pre-empt the ideas and solutions which will emerge from the discussion – I will review those later – but I will raise some questions and share a few thoughts which have emerged from work I have been doing.

Finance must be seen in the context of the projects it supports and we are, of course, considering a wide range of projects in different economies. For the most part, I will not address the question of aid which is a huge subject in itself and will be covered in other sessions during the festival. We should, however, consider many needs and demands. And it is demand- the market and the ability to finance- which will be key.

Most multilateral organisations identify the benefit of harnessing private sector capital and skills in delivering healthcare, including the built environment, and many governments embrace that concept, whether through some ‘partnership’ model or recognising the role of private health provision. Healthcare infrastructure, certainly that designed to meet secondary and tertiary healthcare needs, is expensive, complex and usually financed over the relevant long term.

Against this background, I have some questions:

Which financing approaches are the least and the most problematic: direct corporate lending? Supplier financing, project finance? and so on. What are the key decision factors in the current environments?

To what extent is government participation needed successfully to finance a project beyond licences and permits? When is a sovereign guarantee needed and what are the alternatives? There are many private sector operators. What are the key issues to attract finance and minimise its cost?

Where the state or a ministry is sponsoring a hospital or clinic, what are the most effective financing routes? And what are the impediments?

For major projects or programmes, what is the role, if any, of government to government arrangements (G2G)? What would be the best things to include, or exclude in those arrangements ? ( finance? knowledge transfer?….)

What roles can export credit agencies best play in healthcare infrastructure development and what are the principal advantages ( apart from financing cost) and what are the impediments? Would it be better for ECAs to be involved proactively early in the process? To what extent is that feasible?

We see many proposals for ‘one off’ projects. Is it thought that there will be trend towards programmes of development?

How serious is any concern about political risk and how are those concerns best managed?

Many sponsors identify need and propose solutions but the absence of seed capital to develop feasibility and business cases prevents the ideas being realised. Is this just a fact of life or is there a solution? Where could sponsors go to access early stage finance?

Hospitals and other healthcare facilities are expensive and complicated organs. Solutions which include serviced facilities or equipment ( such as laboratory services) are also complex. Do steps need to be taken to help manage the procurement and management of these contracts. If so, what is the most effective type of capacity building? Is this of concern to financiers?

Is it feasible in the shorter term to develop state or private insurance arrangements which will assist financing through the provision of data and increase the certainty of long term and regular revenues? Apart from the importance of reliable data in healthcare planning, the identification of need and trends is important in assessing the ‘market’

Modern methods of construction (off site construction) are increasingly finding favour for cost, speed and environmental reasons. Is that the case in all or some African countries? And there is emphasis on mobile or moveable/ semi- permanent structures. To what extent are financing requirements such as risk/ ownership transfer and step in affected?

In the planning and design of healthcare facilities, there is growing emphasis on adaptability. That is to build in the ability to respond to changing healthcare needs and the technology and medical science to treat them as well as the need to respond to surges in demand. Long term finance can get nervous about unknown change. To what extent can design address such nervousness? Or is it just a question of financial covenants?

And bringing these and other questions together, what issues differ depend on the type of facility: clinic or other primary or community care building, secondary or tertiary hospital, hub and spoke model, research facility, location (urban, rural, deep rural) or the intended focus on the patient ‘market’? And, more broadly, what things should be done to increase sound investment in healthcare infrastructure in Africa?

I have identified a host of questions and only hinted at some possible answers. There are other matters to consider depending on particular circumstances. I look forward to addressing all of these in my forthcoming article after the webinar session on 4 May.

Please join the session which will start at 09.00 UTC /10.00 BST,WAT/ 12.00 EAT on 4 May.

Contact:

Barry Francis, barry.francis@barryfrancisconsultancy.com