HFI Newsletter, issue 23 – July 2021

Newsletter

HFI Newsletter, issue 23 – July 2021

Jump-starting health investments: the role of first-loss capital
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Issue 23 
 

In this issue:

HFI's growing team

HFI is delighted to welcome our new board members and staff!  

Hina Shaikh and Joel O. Carter have joined HFI's Executive Board with extensive experience in a variety of sectors. Hina has 16 years of experience across government, academic, and the nonprofit sectors in areas of law, public health, and women’s empowerment, and Joel has decades of experience in the financial services industry and international development.  

Prabhat Pani has joined HFI’s Senior Advisory Board. Prabhat manages social sector interventions and projects in SPJIMR, a top Management school in India, in addition to his role as Senior Advisor for Partnerships with the premier philanthropic organization in India, Tata Trusts.  

In addition to new board members, HFI is excited to share that our team is growing. Alayna Sublette has joined HFI’s team as a Programs Associate with substantial experience working for a variety of global health nonprofits, such as the Clinton Health Access Initiative (CHAI) through the Global Health Corps, with a focus on expanding access to healthcare.  
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HFI's fall internship opportunities

Would you like to use your skills to make the world a better place? Are you interested in working as part of an innovative, flexible, and dynamic team? If so, there is still time to apply for our fall internships! We are seeking energetic and talented candidates to continue and accelerate the groundbreaking work that HFI embarks on.  
 
Roles we're accepting applications for:  

  • Fall Semester Communications Intern 

  • Fall Semester HR and Operations Intern 

  • Fall Semester Business Development Intern  

  • Fall Semester Innovative Finance Intern 

  • Fall Semester Communications Intern 

All open roles are available at healthfinanceinstitute.org/careers. To apply, please e-mail a CV and cover letter to hr@healthfinanceinstitute.org. 
Read what our current interns have to say about their experience at HFI: 

“Only a few weeks into my internship at HFI and I've already gained a whole new perspective in leveraging innovative financial instruments to address hard societal issues.”
- Akshat Jain, Summer Impact Investing Intern, MBA Student at Northwestern University 

“I was intrigued by the level of dedication and rigor the team members at HFI brought in each and every day. The supportive environment and the amazing team culture made my internship experience not just intellectually stimulating, but also a fun-filled, happy experience.” 
- Shefali Sharma, Summer Business Development Intern, MPA Student at Columbia University 
Blended Finance Digest:
Catalytic First-Loss Capital
 
In the August 2020 newsletter, we discussed the role of blended finance in mobilizing additional (commercial) finance towards sustainable development in developing countries. One such blended finance instrument is Catalytic First-Loss Capital (CFLC). In a CFLC structure, concessionary capital providers take a junior position in an investment vehicle's or project's capital structure in the form of subordinated debt/equity, grants, or guarantees. Consequently, in case the investment is unable to generate the projected returns, the first-loss is borne by concessionary capital providers. For such concessional financiers, CFLC is a creative way to use its impact-seeking capital in lieu of grantmaking. If risks are well-managed, CFLC can even be recycled for future structures and projects, further increasing impact outcomes. For commercial financiers, CFLC reduces the overall investment risk (with favorable returns) and protects their return-seeking capital from future losses. A report by USAID suggests that CFLC can have (on average) a 3-6x multiplier (or "leverage") effect in terms of capital mobilized. 

In healthcare, prominent examples include the Medical Credit Fund (MCF) in sub-Saharan Africa. The MCF shows how CFLC can mobilize capital to improve health services for underserved communities. MCF started with $2.5M in grants in 2009 and grew up to be a $50M fund by 2017 with 15% of this amount as first-loss capital. The recently announced emerging market social bond in Sweden leveraged CFLC, too, with the Swedish International Development Agency (SIDA) absorbing up to 25% potential losses over the bond's life.   

At HFI, we continue to work on such blended finance instruments to address the financing gap in NCDs. To learn more about our work, reach out to us at info@healthfinanceinstitute.org.  
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