Submission of Evidence to the House of Commons International Development Committee for the Inquiry on Investment for Development: The UK’s Strategy Towards Development Finance Institutions



  1. This submission is based primarily on British International Investment's (BII) activities in the health sector. BII (and its precursor CDC Group) has been prominent amongst development finance institutions in its involvement in overseas health systems, particularly in its provision of financing to support the expansion of private hospitals and clinics. For example, between 2013 and 2019, BII made direct investments of approximately USD 270 million in private hospitals in India.[1] In 2020, it committed USD 100 million to support the expansion of one of Egypt's largest private healthcare providers.[2] In addition, BII has become a stakeholder in a range of other private hospital and clinic chains in South Asia and Africa through investments made indirectly through intermediary funds. BII is also a founding member of the international Investors for Health initiative.[3]


How does the BII’s strategy align with the FCDO’s development agenda?

  1. Over the past decade, successive UK governments have been consistent in stating their support for the development of inclusive health systems.[4] In 2021, a Foreign, Commonwealth and Development Office (FCDO) position paper on Health Systems Strengthening for Global Health Security and Universal Health Coverage continued this line of interest, stating not only that investing in health systems remains 'a key priority' for the FCDO, but also that 'strong, resilient, and inclusive health systems are a critical foundation upon which solutions to the world’s most challenging health issues depend.' [5] The FCDO's position focuses on inclusivity, by 'supporting efforts to deliver a package of the most cost-effective essential health services to save and improve the lives of the poorest, most marginalised and most vulnerable people in the countries with whom we work'. Its emphasis on supporting the poorest, most marginalised and most vulnerable is summed up in the position paper's first guiding principle: 'leaving no one behind'.


  1. Despite its involvement (as an investor) in the health systems of other countries, BII's role within the FCDO's agenda for health systems is unclear. BII (or CDC Group) is not mentioned in the FCDO's 2021 position paper on Health Systems Strengthening for Global Health Security and Universal Health Coverage.[6] There is no mention of BII in relation to the 'One UK Government approach to health' that is claimed in the position paper. It is therefore not obvious from these documents how the FCDO envisages BII's existing and future investments in private healthcare as contributing to the FCDO's health systems work.


  1. Until recently, BII's own strategy was ambiguous regarding the implications for health and inclusivity of its health sector investments. Historically, the focus of BII's work has been to support business expansion, job creation and economic growth. The health sector featured primarily because it was considered labour-intensive and therefore good for job creation. A set of wider impacts relating to health investments were briefly articulated in BII's 2017-21 Strategic Framework, which named private healthcare as one of the seven priority sectors on the basis that private healthcare companies would create jobs, and that investment in the companies could also lead to new treatments, reduce healthcare costs and train healthcare professionals.[7] The stated aim was to invest in 'private healthcare providers that have a positive impact on the overall health care system'.


  1. In its 2022-27 Strategy, BII has been more explicit in acknowledging the risks to inclusivity of its investments in private healthcare.[8] The 2022-27 framework refers to healthcare as one of the 'SMART industries' that BII will invest in and explicitly mentions the need to protect public provision and to make positive contributions on issues of access and affordability:

We will focus on investing in private-healthcare providers that have a positive impact on the overall healthcare system, particularly with regard to access and affordability. Importantly, we will not support activities that undermine public facilities. To that end, we will prioritise investing in the following areas: the manufacturing of medicine, vaccines, devices and equipment; pharmacy and retail logistics; treatment and delivery; early-stage funding for research and development and health-technology companies; and market-shaping interventions combining the public and private sector. Any investment we make in a hospital will ensure the hospital supports a significant proportion of users who are on government payment schemes or on low incomes.


  1. Nonetheless, the relationship between BII's healthcare investments and the FCDO's health systems strengthening work still requires significant elaboration. The mention of healthcare access and affordability in the BII strategy at least acknowledges these as issues associated with its investments and reflects the language of the FCDO's own health systems work. However, BII's apparent intention to continue investing in private hospitals is concerning because of its likely impact on inclusivity (see paragraphs 14-19 below) and because it does not appear to fit with the FCDO's prioritisation of primary healthcare and public health functions. BII's absence from key FCDO strategy documents, particularly on health systems strengthening, raises questions regarding the extent of engagement between BII and FCDO health sector activities, and whether or not BII is included in the FCDO's stated 'One UK Government approach to health'.[9]

How does BII’s strategic outlook compare with that of other comparable overseas institutions?

  1. BII has devoted significant attention and resources to 'impact' and 'impact investing'. As CDC Group, it sought to establish itself as a hub for impact investing in the mid-2010s, through its appointment of a new CEO in 2017 and drastic increases in the size of its impact team.[10] It produced a range of toolkits and instruments to document and examine its investment impacts and was handed control of the UK government’s IMPACT Programme to provide technical assistance to investors for working in this area.[11]


  1. Other national DFIs have placed significant emphasis on pursuing economic benefits for companies from the DFI's country. For example, Sweden's Swedfund and Netherlands' FMO have aimed to use investments to support the international expansion of domestic businesses.[12] This has led to investments made to support the growth of medical technology companies such as Elekta (Sweden) and Philips (Netherlands).[13] In other cases, the domestic economic interests of the DFIs may not be stated so explicitly but are nonetheless evident. For example, France's Proparco and the USA's DFC provided loans totalling USD 100 million and USD 500 million, respectively, to hospital private finance initiatives (PFIs) in Turkey involving infrastructure firms Meridiam (France) and GE (USA).[14]


  1. It is not just DFIs; other types of publicly owned financing institution operate in this way. Japan and South Korea have, as part of wider strategies to boost infrastructure exports, used a combination of aid agencies, national development banks and export credit agencies to finance hospital private finance initiatives that include contracts for leading infrastructure companies Sojitz (Japan) and Samsung (South Korea).[15] One of Singapore's sovereign wealth funds, the Government of Singapore Investment Corporation (GIC), has been tasked with supporting Singapore's financial services sector while making investments in overseas healthcare projects.[16]


  1. The UK Government must ensure that development remains the central basis for BII's investments and that it does not become driven by domestic economic interests. This is a particular risk given the merger of DFID with the FCO and the recasting of CDC Group as BII, as noted by the International Development Committee in its recent Inquiry on Extreme poverty and the Sustainable Development Goals. The suggestion by senior UK government officials that BII might work more closely with City of London indicates a political shift towards greater use of BII investments to pursue economic goals for the UK and its industries.[17] Such an approach is liable to undermine core tenets of effectiveness and impact for UK development financing.

What due diligence does BII undertake prior to making investment decisions and how does this compare with best practice?

  1. The relationship between BII and Dubai-based private equity firm Abraaj merits the attention of the committee. In 2018-2019, senior managers at Abraaj were accused of fund misuse and Abraaj subsequently collapsed, with its CEO facing fraud charges and 291 years of imprisonment in the USA. Up until that time, BII had been a major supporter of Abraaj's work. Investigative journalists Simon Clark and Will Louch (Wall Street Journal) have documented in some detail events leading up to the downfall of Abraaj in their articles and book, The Key Man: How the Global Elite Was Duped By A Capitalist Fairy Tale (Penguin).


  1. BII and Abraaj collaborated frequently over several years leading up to Abraaj's collapse. They appear to have built close ties after the latter’s acquisition of BII spin-off Aureos in 2012.[18] In the subsequent years, BII made investments totalling USD 130 million in three Indian hospital chains as a co-investor alongside Abraaj.[19] In 2015, BII committed USD 50 million to Abraaj’s new Growth Markets Health Fund, which aimed to develop a global chain of private healthcare companies. BII's investment in the Growth Markets Health Fund made it one of the largest investors in the fund, alongside the World Bank's International Finance Corporation, the USA's DFC and the Bill and Melinda Gates Foundation.


  1. BII was by no means alone in working closely with Abraaj, but the significant exposure of BII to Abraaj's collapse raises several questions about its operations. First, what were the nature of relations between BII and Abraaj? Second, to what extent might institutional group-think amongst the wider impact investing community have influenced BII's deepening involvement with Abraaj over several years? Third, what due diligence was undertaken regarding Abraaj prior to BII's multiple co-investments and its investment in the Growth Markets Health Fund? Fourth, how did BII and the UK Government come to learn of allegations of fraud at Abraaj and how were these issues not identified sooner? Fifth, are due diligence processes now adequate to prevent similar incidents occurring in future? The underlying issue here is how BII operates as a publicly funded and development-oriented institution and how it can maintain appropriate boundaries with the private investors it aims to engage in development financing.


What criteria does BII use to determine investment decisions and how are financial returns balanced with achieving impact? How does BII evaluate the impact?

  1. In the past 10 years, BII has taken steps to improve how it understands the developmental impact of its investments, including in relation to its health sector investments. It commissioned a series of studies on the impacts of its investments, including one by the Institute of Global Health Innovation (IGHI) at Imperial College London.[20] The IGHI report highlights the importance of considering health sector investments within the wider health 'ecosystem' and the need to ensure positive impacts for the system as a whole. This appears to be the basis for reference in recent BII strategic documents to achieving positive benefits for health systems (see paragraphs 4-5 above). The report also set out a framework through which providers could be assessed according to four broad areas: quality of care, access to care, workforce and stewardship. Each area is divided into sub-components, with access to care comprising access and affordability. This then appears to be the basis for reference to issues of access and affordability in recent BII strategic documents.
  2. Access and inclusivity are acute issues when it comes to DFI investments in private healthcare. The World Health Organization and World Bank have calculated that each year 500 million people globally are pushed or further pushed into extreme poverty by the costs of healthcare.[21] The kind of corporate healthcare providers receiving investment from DFIs are typically too expensive to be considered affordable for many people and have limited, if any, mechanisms to protect users from catastrophic health expenditure.[22] Some fees may be waived by chains that provide ‘free’ services to low-income households, cross-subsidised by fees paid by the less poor, but such packages are often limited to particular services, with limited follow-up, and are made at the discretion of the administering hospital. The expansion of these providers in health systems is liable to exacerbate catastrophic health expenditures and to drive further segmentation and inequality. These problems are increasingly well-documented in India, where BII has invested heavily in the expansion of corporate healthcare provision, and where I and others have documented the system-wide distortions fuelled by financial motivations.[23]


  1. Only one evaluation of a BII investment using IGHI's framework is available in the public domain, and it shows worrying findings with regards to inclusivity. The IGHI group that developed the framework applied it to a private hospital chain in India that had received investment from BII. Their findings were broadly supportive of the provider's work in terms of quality, workforce and stewardship, but raised concerns in relation to access. They noted that '[the provider] does not appear to have given much thought to cultural accessibility, or how to overcome the inherent biases and difficulties that are faced by marginalised communities.' On the issue of affordability, the authors of the evaluation noted:

There seems to be cross-subsidisation from the richer patients to the poorer, although the extent of it is unclear. It is commendable that [the provider] makes efforts to treat all those who come in through their doors, regardless of their ability to pay. However, there is little evidence available to understand the real impact of this, and whether patients are avoiding catastrophic medical expenses.


  1. It is unclear to what extent the IGHI framework has been systematically applied to prospective or retrospective decision-making for BII investments in the health sector. There is mention by BII employees in the press media that IGHI's framework has been applied to other investments,[24] however the findings do not appear to be available publicly. The details of investments on the BII website show that for several healthcare investments made since 2017 there was no health rationale, and that the intended impacts were for job creation and economic growth. These include: Al Tayseer Healthcare Group, Akdital, Dr Agarwal's Healthcare, Disha Medical Services and MetaMed. Investments made through an Evercare Fund reportedly aim to 'improve access to good quality healthcare for people living in underserved areas' through 'accessible, affordable and high-quality treatment',[25] but provide no further information on how low-income communities will be catered for and catastrophic expenditure avoided. The webpage for BII's investment in private healthcare group Alfa goes furthest, but only insofar as vaguely gesturing towards the possibility that an expansion of government health financing might one day protect the users of Alfa's services against catastrophic expenditures: 'Universal health coverage roll-out could further improve affordability'.[26]


  1. BII's Impact Score system incorporates a score for inclusivity, alongside productivity and sustainability, but this risks being applied narrowly and missing problems with affordability of social sector services such as healthcare. Investments are to be scored from 1 to 4 on inclusivity, judged by the extent to which they will reach low-income populations (or if such data are not available then a country-level proxy score is used). [27] However, BII's methodology for the inclusivity scoring indicates that scores will only take into account the intended impacts that have been set for an investment:

scores are determined by percentage of stakeholders reached living below $5.50/day (a poverty line based on consumption measured in Purchasing Power Parity dollars, maintained by the World Bank). These stakeholders could be customers, employees or suppliers, but the score will only consider the key stakeholder group corresponding to the intended impact of the investment.

This appears to suggest that if an investment only aims to create jobs then its only key stakeholder group would be the company's employees; other effects would not be considered as part of the scoring. As such, an investment in a private hospital justified on the basis of job creation (see paragraph 17) could score highly on inclusivity, regardless of whether it provided services to low-income communities. Even for investments where the intended impact is health-related and where healthcare users are identified as a key stakeholder group, there appears to be no consideration of the affordability of services, only the proportion of users who are low-income. There is a very real possibility that BII investments are supporting the expansion of healthcare providers that are excluding low-income communities and/or incurring catastrophic expenditures for service users, and that this is not being evaluated or is not being reported.


  1. BII must stop investing in private hospitals and clinics unless it can demonstrate that its work is not undermining inclusivity by excluding low-income groups and/or pushing people (further) into poverty. The frequency with which BII's investments in private hospitals and clinics have been justified on the basis of job creation suggests that inclusivity of access amongst users, and the impacts on the wider health system, have been marginal concerns. The issue of affordability seems particularly limited in BII decision-making in this sector. Given that private healthcare provision is known to drive inequality and catastrophic expenditures, there is an urgent need for BII to evaluate the impact of its healthcare investments from this perspective. In the IGHI framework, BII has a tool with which to assess its existing portfolio of healthcare investments, including with regards to access and affordability. If the framework has been used to evaluate BII investments, then the results should be made public. Unless there is evidence to demonstrate that BII's investments are achieving positive impacts on access and affordability, then they will continue to seriously undermine the stated FCDO position on health systems strengthening.


Dr Benjamin M. Hunter, University of Sussex



[1] Hunter, BM. 2023. Investor States: Global Health at the End of Aid. Cambridge University Press.

[2] BII. 2021. CDC North Africa Healthcare Limited. Available from:

[3] Investors for Health. 2023. Introducing Investors for Health. Available from:

[4] Department for International Development. 2013. Health Position Paper: Delivering Health Results. London.

[5] FCDO. 2021. FCDO Position Paper: Health Systems Strengthening for Global Health Security and Universal Health Coverage. London.

[6] Ibid.

[7] CDC Group. 2017. Investing to Transform Lives: Strategic Framework 2017-21. London.

[8] BII. 2022. Productive, Sustainable and Inclusive Investment: 2022 – 26 Technical Strategy. London.

[9] FCDO. 2021. FCDO Position Paper: Health Systems Strengthening for Global Health Security and Universal Health Coverage. London

[10] Aldane, J. No date. How capital is used makes a profound difference to the world we live in. Available from: CDC Group and DFID. 2019. CDC Group and DFID Response to the Independent Commission for Aid Impact’s recommendations on: CDC’s investments in low-income and fragile states. London.

[11] CDC Group. 2021. Catalyst Strategies. Available from:

[12] Hunter, BM. 2023. Investor States: Global Health at the End of Aid. Cambridge University Press.

[13] On Netherlands specifically, see also: Wemos. 2020. In the Interest of Health for All? The Dutch 'Aid and Trade' Agenda as Pursued in the African Healthcare Context. Amsterdam.

[14] Hunter, BM. 2023. Investor States: Global Health at the End of Aid. Cambridge University Press

[15] Ibid.

[16] Ibid.

[17] UK Government. 2021. Truss revamps British development finance institution to deliver jobs and clean growth. Available from:

[18] Hunter BM. 2023. Investor States: Global Health at the End of Aid. Cambridge University Press.

[19] Ibid.

[20] Wadge et al. 2017. Evaluating the Impact of Private Providers on Health and Health Systems. London

[21] World Health Organization. 2021. Global Monitoring Report on Financial Protection in Health 2021. Geneva.

[22] Hunter BM and SF Murray. 2015. 'Beyond aid' in health care: Is it time for scrutiny? BMJ.

Hunter, B and Marriott, A. 2018. 'Development Finance Institutions: The (In)coherence of their Investments in Private Healthcare Companies", in Tomlinson et al (eds), The Reality of Aid 2018 Report. IBON International

[23] Marathe, S, Hunter, B, Chakravarthi, I. Shukla, A, Murray, S. 2020. The Impacts of Corporatisation of Healthcare on Medical Practice and Professionals in Maharashtra, India. BMJ Global Health, 5: e002026

[24] Edwards, S. 2019. CDC seeks sustainable investment in private health care. Available from:

[25] BII. 2023. Evercare Health Fund. Available from:

[26] BII. 2023. CDC North Africa Healthcare Limited. Available from:

[27] BII. 2022. Impact Score 2022 – 26 Strategy Period. London