Prescription for investment
Good healthcare ideas often have trouble raising money to go beyond the early research. From malaria to coronavirus, EIB investment takes aim at this problem
When a major epidemic, like Covid-19 strikes, everyone’s attention turns to the complicated business of developing vaccines.
In response to the Covid-19 epidemic, the European Investment Bank intends to use existing financial instruments that it shares with the European Commission, primarily the InnovFin Infectious Disease Finance Facility, to back projects that aim to control, cure or prevent coronavirus.
“We will build on what we already do for the health sector,” said Werner Hoyer, President of the European Investment Bank. “We are already in contact with companies and organisations seeking to fund the search for Covid-19 vaccines and medication. The EIB Group will work without pause to ensure the EU bank contributes to the rapid resolution of this terrible crisis.”
But it’s not only eye-catching viruses like Covid-19 that require an urgent response. Major world issues such as climate change play a role in the spread of disease. Just as it will take massive investment to halt climate change, so major financing is required for the prevention and cure of the diseases it promotes.
Climate change can exacerbate the problems NGOs and scientists face trying to tackle major diseases. Take malaria. Warmer temperatures are increasing mosquito populations, so biotechnology companies are investing in new tools to prevent and treat malaria in Africa.
Each day in Africa, around 700 children die from malaria, one of the most lethal infectious diseases on the continent. Research and development in malaria is hampered by a € 1.8 billion to €2.7 billion deficit in funding, mainly for scaling up products. This shortage is made worse by increased resistance to insecticides used on bed nets and to some of the most effective drug treatments.
“Extreme heat is directly related to several diseases, including cardiovascular and respiratory diseases and asthma,” says Felicitas Riedl, the EIB’s head of life sciences. “The rise in temperature is a consequence of climate change and the impact on the health of societies will increase. Concretely, climate change affects the social and environmental determinants of health – clean air, safe drinking water, sufficient food and secure shelter. Our projects try to address the impact of climate change.”
There are many promising projects from biotechnology and pharmaceutical companies researching vaccines and other biological approaches to the prevention of malaria. These early-stage projects often struggle to find financing. But they have received support from the EU Malaria Fund, a €240 million investment instrument involving the European Union, international organisations, corporations and civic society. The fund was created in 2014 by the KENUP Foundation, a global organisation promoting innovation in Europe.
The European Investment Bank signed in 2019 to invest €111 million in the EU Malaria Fund. “We want to fill a market gap and accelerate new solutions that are critically needed to fight malaria and protect global public health,” says Anna Lynch, an EIB healthcare expert.
What does climate change have to do with hospitals? More than you might think. On the one hand, hospitals treat patients with illnesses caused by climate change. Conversely, they contribute to climate change.
The climate crisis affects public health, as well as the way we deliver care. Hospitals need to withstand service disruptions and temporary evacuations caused by heat waves, wildfires, drought and floods. All over the world, doctors and nurses have to anticipate and treat new illnesses.
Most healthcare facilities are not climate-friendly. They produce large quantities of medical waste and use up a lot of energy for ventilation, heating, cooling, lighting and machinery. Some hospitals are taking steps to reduce their climate footprint.
The clinical centre in Rijeka, a major hospital in Croatia, is scattered among 60 old buildings in three locations across the town, causing unnecessary ambulance trips through heavy congestion. The hospital serves 600 000 residents around Rijeka and hundreds of thousands of people on holiday.
In 2019, the hospital broke ground on a new, modern building that will bring all its activities together in a single location. The project will upgrade and build up-to-date service facilities, including a thermal power block, a kitchen and parking areas. The new building is expected to reduce electricity use by 40% and gas by 50%, and save 30% of water. Newborn babies will no longer be transferred between hospital services that are nine kilometres apart. Instead, they’ll move comfortably from one room to the next. The hospital received a €50 million EIB loan and advice from the European Investment Advisory Hub in 2019.
To improve our health, we usually think of balanced diets, new medicines and drugs. The quality of the world around us may not immediately spring to mind. Eiffel Essentiel, an investment fund in France, is helping businesses in renewable energy, sustainable agriculture – and healthcare.
With a lifespan of up to 15 years, the fund will provide long-term growth capital to innovative firms. Fabrice Dumonteil, Eiffel Investment Group’s managing director, says that innovative companies pursuing ambitious industrial investment projects need time to grow and develop. The fund plans to support 20 firms. The first potential investments include an agrifood company that specialises in treatments for specific illnesses.
Eiffel Essentiel is raising €200 million to €250 million in an initial investment round, but the fund’s target size is €400 million. The European Investment Bank is contributing €80 million under the European Fund for Strategic Investments.