Social bond developed by responsAbility, Danske Bank and SIDA disburses first loan

Investing in health care after the pandemic: responsAbility mobilizes private capital for hospital in Vietnam

June 20216 min read

Swiss sustainable investment house, responsAbility, delivers the first financing from its recently launched social bond, which was fully subscribed by Swedish institutional investors. The loan has gone to Hanh Phuc General Hospital, a private Vietnamese hospital, and the capital will be used to expand in the areas of preventive care (screening), diagnostic testing and cancer treatment. Further disbursements from the novel social bond are soon to follow, and target businesses not only in the healthcare and WASH (water, sanitation, hygiene) sector, but also businesses that promote financial inclusion, access to clean energy and sustainable food production.

Zürich, 25 June 2021 — Hanh Phuc General Hospital JSC, a privately operated Vietnamese general hospital from An Giang Province, has been awarded the first loan financing from the Social Bond Financing for Healthier Lives. The loan is funded from the capital mobilized by the social bond from private investors. Financing for Healthier Lives pools loans to capital-scarce innovative companies from developing countries that have a measurable positive social impact. The social bond is the first of its kind and has been conceived and launched under the leadership of the sustainable investment house responsAbility and in close cooperation with the Swedish International Development Agency (Sida) and Danske Bank.

“Vietnam has large unmet healthcare demands, especially in rural and semi-urban areas. Resources are scarce. So being on the ground, we are able to discover relevant investment opportunities and to channel private capital into quality affordable healthcare services for the people. With this hospital, we were impressed by the history, management, human resources, and its commitment to making a social impact. We look forward to similar investments in the future.” - Quang Duy Bui, Senior Investment Officer at responsAbility

By financing medical equipment, the loan will allow Hanh Phuc General Hospital to expand its capacity for preventive examinations (screening), diagnostic tests and cancer treatment, which is urgently needed as the number of cancer cases in An Giang has increased over the past decade. This development has prompted Hanh Phuc to vigorously expand its cancer diagnosis and treatment resources in order to provide better medical services to the local population. The hospital's owners remain committed to their founding goals: to provide quality, affordable and accessible health care to people in the province and neighboring regions. Hanh Phuc is part of the Vietnamese public health insurance scheme (Social Health Insurance (SHI)), meaning that patients of Hanh Phuc can be reimbursed for all or part of the health services provided. SHI, in turn, is part of the VSS social insurance system operated by the Vietnamese government.

“We are one of Vietnam’s first three private hospitals and we have an extensive operating track record, always striving to improve the quality of service for our patients. The injection of private capital facilitated by responsAbility enables the purchase of the newest model of cancer diagnostic and treatment machines. This ensures the hospital can provide full-service cancer treatment to patients in our hometown and the surrounding provinces, which is crucial in advancing our mission to give cancer patients good care, comfort, and proximity to their family.” - Lu Bich Nguyen, founder and chairwoman of Hanh Phuc Hospital

Hanh Phuc General Hospital is one of the oldest hospitals in the country, founded in 1997 as a specialty hospital for maternity and pediatrics by a dedicated well-known entrepreneur and a respected physician. Both of them remain active for Hanh Phuc. Hanh Phuc is the first private hospital in the Mekong Delta region, which is predominantly agricultural, although the tourism sector in the region is also growing steadily. In 2010, the hospital transformed into a general hospital by expanding its facilities to provide all major health services. And in April 2021, the hospital inaugurated a new wing that will allow further expansion of its total capacity to 300 beds and the introduction of new healthcare services, namely cancer diagnosis and treatment.

The Social Bond, which has made this financing possible, speaks to the urgency that Covid-19 has created to achieve the United Nations' 17 Sustainable Development Goals (SDGs). Even before the pandemic, both pace and scale were lacking. Underlying the Social Bond is the belief that targeted private investment can significantly advance the SDGs. However, the mobilization of private capital often fails due to the risk aversion and return orientation of private investors. Conceived as a social bond, the initiative makes a measurable contribution to the SDGs and combines this development impact with interest rates in line with the market. In this way, it hints at the potential for promoting sustainable development that the mobilization of private capital can unleash.

The social bond has had an outstanding response from private investors: it has been fully subscribed by Swedish institutional investors with subscriptions amounting to USD 177.5 million, exceeding expectations. The launch builds on responsAbility's expertise in designing impact-oriented investment products with larger volumes, lending to companies in developing countries and managing credit risks. Other the recipients of the loan financing include the microcredit companies Prasac in Cambodia, Bina Artha Ventura in Indonesia, as well as the Kenyan Family Bank.

The social bond mobilizes private capital for the following United Nations Sustainable Development Goals:

responsAbility is a leading impact asset manager who designs investment products that make the world more sustainable. Since our inception in 2003, we have been investing in growth markets, directing capital where it is scarce, and targeting both measurable positive impact and attractive financial returns. Currently, responsAbility manages USD 3.5 billion in assets invested in over 300 ESG-vetted high-impact companies in 76 countries. The newly launched Social Bond follows a USD 175 million securitization of microfinance loans successfully completed in 2019. Since inception, funds managed by responsAbility have provided over USD 11 billion in debt and equity financing to companies active in the areas of climate finance, financial inclusion, and sustainable food whose business models directly contribute to the United Nations Sustainable Development Goals (SDGs).

responsAbility is headquartered in Zurich, Switzerland, with offices in Bangkok, Lima, Mumbai, Nairobi, Oslo, Paris and Tbilisi. The company's shareholders include its own employees as well as various renowned Swiss and international financial institutions. responsAbility is authorized by the Swiss Financial Market Supervisory Authority FINMA.

Media Contact

Stacy Fiehler

stacy.fiehler@responsability.com

+41 44 403 06 86

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This information was produced by responsAbility Investments AG together with its partners to the best of its knowledge and belief. However, responsAbility Investments AG provides no guarantee with regards to its content and completeness and does not accept any liability for losses which might arise from making use of this information. The opinions expressed in this information material are those of responsAbility Investments AG at the time of writing and are subject to change at any time without notice. If nothing is indicated to the contrary, all figures are unaudited. This material is provided for information purposes only. It does not constitute an offer or a recommendation to buy or sell financial instruments or services and does not release the recipient from exercising his/her own judgment. It is expressly not intended for persons who, due to their nationality or place of residence, are not permitted access to such information under local law.

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