World Bank 6 Donor Forum – 20/21 May French Development Agency Support to the private sector in health Technical Department Health and Social Protection Division Marie-Odile WATY, head of division

World Bank 6 Donor Forum – 20/21 May AFD / General overview Main characteristics __________________________________________________________ State-owned development bank Complete set of instruments: grants concessionary and subordinated loans (AFD); loans at market condition (Proparco) guarantees (ARIZ : AFD and Proparco) equities (Proparco) For any kind of development stakeholder central governments, local authorities state companies/banks private companies/banks/funds Diversity of clients, instruments and intervention (project, sector-based approach, multi-countries or regional intervention, NGO support…)

World Bank 6 Donor Forum – 20/21 May AFD / General overview Financial commitments: M$ in 2006

World Bank 6 Donor Forum – 20/21 May Central player of France’s official development assistance (Triple A rated) Active on the 5 Continents Actions geared towards reaching the Millennium Development Goals (MDGs): - Economic growth - Poverty reduction - Promotion of Global Public Goods (e.g. : public health, environment) AFD Public and private (non-profit) financing PROPARCO Private Sector (for profit) Financing CEFEB Studies & Training FFEM French Fund for Global Environment AFD Group Affiliated Banks In French Overseas Territories AFD Group

World Bank 6 Donor Forum – 20/21 May AFD / General Overview 60 countries of intervention

World Bank 6 Donor Forum – 20/21 May Private health sector : Context Important role in the provision of care (not- for-profit as well as for-profit sector) Better quality care and patients satisfaction Better incentives in place for good management and staff retention

World Bank 6 Donor Forum – 20/21 May Private health sector : Challenges Sector totally unregulated in terms of quantity and quality (the best coexisting with the worst) Distrust between the public and private sectors The for-profit sector is confined in large cities where high and middle income groups live, and usually targets more lucrative health care business (diagnostic facilities, etc.) The not-for-profit private sector often has poor management capacity and difficulties to expand In low income countries, the sector is largely fragmented, made of very small businesses

World Bank 6 Donor Forum – 20/21 May Private health sector : Challenges In low income countries, the sector has difficulties expanding due to : low payment capacities from the general population and lack of risk pooling arrangements high risk activities difficulties in accessing funds In middle income and emerging countries, the sector has no difficulties accessing funds (credit availability) but difficulties to expand (lack of health insurance)

World Bank 6 Donor Forum – 20/21 May Private health sector : Development perspectives A priority for AFD ( not-for-profit and for-profit sectors) Need to know, at country level, the situation of the sector and its needs and to better understand its willingness and capacity to expand its services to poorer segments of the population  program of sectoral studies (immediate launch in 5 African countries) Part of the institutional dialogue with government authorities, especially ministries of health, and part of project preparation activities

World Bank 6 Donor Forum – 20/21 May Private health sector : Development perspectives Transversal activities : Regulation, accreditation, quality assurance Legal framework and tools, etc. Public-private partnerships, contracting  Through grants and technical assistance

World Bank 6 Donor Forum – 20/21 May Private health sector : Development perspectives Not-for-profit sector or social business (top priority): Expansion and development of existing facilities and services Improvement of management capacities  Through soft loans, grants or guarantees depending on the context  Examples: Cameroun, Lebanon, Eye fund with the Deutsche Bank, etc.

World Bank 6 Donor Forum – 20/21 May For profit: Private sector Initiative for Africa was launched by President Sarkozy at Cape Town last February Objective: to reduce barriers which limit access to capital and to strengthen local capabilities. Impact: to support 1900 entities of different sizes (mainly small and medium) which should create jobs and provide local investors with more than €8Bn of complementary funding Tools: loans, guarantees and equity investments to leverage local resources : – implement a new fund of guarantee (ARIZ 2), – set up an investment fund for Africa with €250 M as initial allocation, – double AFD group activities dedicated to the private sector Private health sector : Development perspectives

World Bank 6 Donor Forum – 20/21 May / ARIZ (risk guarantee) key objectives To share credit risk with commercial banks to support MSMEs and MFIs financing To facilitate access to credit, in particular medium & long term loans, ARIZ 2 (€250 M) enhances the existing ARIZ fund larger panel of beneficiaries: give access to bigger player (maximum guaranteed amount increased to €2M from €750 K) as well as smaller ones (through portfolio guarantees to financial institutions) broader risk participation (rise in the % guaranteed, from final loss to second loss indemnity, possible advance of 100% of the guarantee as the damage occurs…) extended eligible guarantee on equity (from €300 K to €1M), increase duration from 7 to 10 years, open to capital-investment entities Expected to deal with 400 companies/year for €750 M operations Private health sector : Development perspectives

World Bank 6 Donor Forum – 20/21 May / Set up an investment fund for Africa €250 M “fund of African-based funds” dedicated to SMSEs, post-crisis countries, strategic sectors (health, social, food) part of profits generated from the fund will be re-invested to strengthen capacities (management) and support intermediaries for companies services Expected to catalyse €1 Bn investment through 20 funds, 800 SMSEs, jobs Private health sector : Development perspectives

World Bank 6 Donor Forum – 20/21 May Firms : Development of social and environmental responsibilities Support to projects developed by firms in developing countries Creation of foundation to promote corporate social and environmental responsibilities Private health sector : Development perspectives

World Bank 6 Donor Forum – 20/21 May Thank you