The Eye Fund

Presented To: WCRE 2007

Global Blindness and Economic Gain

“Without extra interventions, the global

number of blind individuals would increase from 37M in the year 2000 to 76M in 2020. A successful VISION 2020 initiative would result in only 24M blind in 2020 and lead to 429M blind person-years avoided. A conservative estimate of the economic gain is $102B”.

The Magnitude and Cost of Global Blindness: An Increasing Problem That Can Be Alleviated , Kevin Frick PhD, Allen Foster, FRCS, FRCO

Eye Fund Overview

• A social venture fund combining innovative financing with sustainability planning and training resulting in sustainable high quality eye services for all economic strata, rich and poor alike.

• Addresses two primary constraints: capacity building and financing

• Will deliver financial and social returns • Social objective: reduce blindness and

ameliorate visual disability in equitable fashion• Three components:

– Eye Fund 1– Eye Fund 2– IAPB Capacity Building Grant Fund

Debt as an Engine for Growth for Eye Hospitals

Debt financing diversifies the number of funding channels available to eye care programs

Debt facilitates the integration of financial institutions, socially-motivated investors, and the social sector

Debt can help Eye Hospitals leverage resources, achieve economies of scale, and increase the number of poor people served

Debt opens new channels for funding through large commercial companies related to eye care and socially motivated investors

Grant capital used as a catalyst can leverage investments from socially motivated investors at reasonable terms.

Increased freedom and financial flexibility to plan, grow, and allocate unrestricted grants

Three Forces Driving This Opportunity

• Globally there are approximately 37 million blind, and 150 million with serious visual impairment

• Grant financing not commensurate with need: collective annual spending roughly $250 million; growth is slow

1. Global Demand for Affordable, High-Quality Eye Care

2. Proven Sustainable and Profitable Service Delivery Model• Proven methodology & planning approach for creating sustainable eye care programs in variety

of countries • Approximately 250 sustainable eye care programs have been created• Self-financing, servicing all economic strata, emphasizing the poor• Sustainable eye care with positive cash flow can service debt financing utilized to scale operations

3. Creating Competitive Landscape for Social Investing• Leveraging existing financial models and capital markets• Create a “synapse” to connect financial institutions, socially investors, and social sector

• Recent success in microfinance facilitates next-generation social investments

Collaborative Partnership

Deutsche Bank Leading global financial institution, positioned on the forefront of social

investing with the dual objective of profitability and social return Manages over $425 MM of socially motivated financing, with loans to and

investments in more than 110 organizations in over 30 countries

International Agency for the Prevention of Blindness Coordinating, umbrella organization leading an international effort to

mobilize resources for blindness prevention activities. Network of professional bodies, non-governmental organisations (NGOs),

educational institutions and interested individuals with the focus to develop and implement programs for the prevention of blindness.

Ashoka: Innovators for the Public The global association of the world’s leading social entrepreneurs Over 1800 fellows in more than 60 countries Eye Fund initiator and provider of financial and human resources via grant

from Robert Wood Johnson Foundation

Structural Overview

PRI/Social Investors (1% Return)

Subordinated

Debt

$7.4 MM

Socially Motivated Commercial Investors (5.8% Return)

Senior

Debt

$12.6 MM

Eye Fund I $20 MM

Capital Structure :Oversight Structure Deutsche Bank Advisory and

Investment Committees of financial industry and charity experts

IAPB Capacity Building Grant Committee

Uses of Financing: Capital investments for equipment

or buildings Program expansion Bridge Financing Replication of program in new

region

Major Milestones To-Date

Established partnership among three leading entities (MOU)

2006 Clinton Global Initiative Commitment

Identified investment of 11 loan candidates

Presently loan applications are being received and reviewed

Financial model developed

Lavelle Fund has committed $250,000 to IAPB capacity building grant fund; another $200,000 is pending from a private donor

Oversight committees are being established:

Deutsche Bank Investment Advisory Committee

IAPB Capacity Building Grant Committee

Online survey for Eye Fund II candidate screening methodology approaching official launch

Eye Fund I Potential Loan Recipients

Sankara Nethralaya (Chennai, India)

He Eye Hospital (Shenyang, China)

Chitagong eye hospital (Dhaka, Bangladesh)

Shroff Charity Eye Hospital (New Delhi, India)

Grameen Bank (Dhaka, Bangladesh)

Al Noor Foundation/Magrabi (Cairo, Egypt)

LV Prasad (India)

Fundacion Vision (Paraguay)

Eye Foundation Hospital (Nigeria)

ICEE- International Center for Eye Care Education (S Africa &

Australia Sydney)

Operation Eyesight Universal (Calgary, Canada)

Details and Terms: Eye Fund I & II

Eye Fund I Eye Fund IIFund Size (USD) $20 M $30 M (expected)

Number Borrowers 11 Organizations* TBD

Borrowing Value / Entity $250 K - $10 M 50 K - $15 M

Borrowers’ Interest Rate LIBOR + 50 basis points (Roughly 6%)

TBD

Duration of Loan Up to 7 years TBD

Principal Payment Full at maturity TBD

Financial Return–Market-Rate Investors–PRI Investors

5.8%1%

TBDTBD

Collateral Requirement Case-by-case basis case-by-case basis

* 11 organizations are in final stage of completing the Eye Fund application, $34 M total are in demand, some attrition is expected.

Capacity Building Grant Fund

Matching grant fund for – Grants to loan investments for training to boost volume, quality

and sustainability– Support to strengthen capacity building training institutions– Grants to programs not ready for debt financing

• Help programs become candidates for loan financing by making them self financing from user fees

• Grants for training, research, programs in demographically challenged where self financing is not an option

Lavelle contribution of $250,000

Grow to $2M

Role of IAPB

Utilize network to discover, aggregate and pre-qualify an investing pool

Advisory Group to give guidance to Deutsche Bank for vetting and monitoring of investments

Capacity Building Committee as decision-maker regarding dispensing capacity building grants to loan fund investments and others

Role of IAPB Capacity Building Grant Committee

Create grant making criteria

Review and select grant recipients

Coordinate with Deutsche Bank, IAPB membership, investments and capacity building organizations.

Monitor results of capacity building grants, via it’s network of members and associated capacity building organizations

Role of Deutsche Bank Advisory Group

Interact with fund manager (Deutsche Bank) to provide advice on: Vetting investments Monitoring investments Organizing technical assistance, training and business

planning for investments

Liaise with IAPB capacity building grant committee

Members will have broad knowledge of eye care field and understand principles leading to sustainable, high quality, high volume eye care development

Implementation and Timeline: 2007

Survey Beta Test (EFII)

JAN APR MAYFEB JUNEMAR JULY AUG SEPT

Official Survey Launch / Screen EFII Investments

EYE FUND I CLOSE

Establish Advisory & Grant Committees

Raise $12.6 MM Commercial Investments

Finalize Prospectus

Raise $7.4 MM PRI

Raise $1.75 MM Grants

Thank You: Q&A

Christian Garms Christian.Garms@cbm-i.org+49 (6)251 2153

David Greendgreen888@earthlink.net+1 (443) 253-7821

Summary of Eye Fund I Pipeline

Sankara Nethralaya(Chennai, India)

He Eye Hospital(Shenyang, China)

Chittagong Eye Hospital (Dhaka, Bangladesh)

Shroff Charity Eye Hospital(New Delhi, India)

Grameen Bank(Dhaka, Bangladesh)

Al Noor Foundation/ Magrabi Eye Hospital(Cairo, Egypt)

Fundacion Vision(Paraguay)

Eye Foundation Hospital(Nigeria)

ICEE- International Center for Eye Care Education(Australia & South Africa)

Operation Eyesight Universal(Calgary, Canada)

• Loan volume: $2.7 M• Investment to be used to build research institute and increase direct service delivery• Total number of patients treated in 2006 was 421,226. 36% of total surgeries were provided to poor patients for

free.

• Loan volume: $3 M• Investment is to be used to quadruple the number of surgeries performed• Total number of patients treated in 2006 was 104,002. 11,698 patients received free/below cost outpatient

service in 2006, which is 22% of the total outpatient service provided that year. 3,466 poor patients received free/below cost surgeries in 2006, which is 42% of total surgeries provided that year.

• Loan volume: $6 M• Investment goods to be financed: full-service general hospital with sub-specialties including ophthalmology.• Chittagong is largest eye hospital in Bangladesh, providing a high percentage of surgery at no charge

• Loan volume: $0.25 M• Investment is to be used for the hospital’s rural expansion and training• More than 50% of patients receive free care and surgery

• Loan volume: $1 M• Investment to be financed: establishment of 5 eye hospitals in Bangladesh which will be self financing while

providing a high degree of service to lower income people at no charge or below cost

• Loan volume: $5 M• Investment goods to be financed: New building for low pay/free section; re-financing debt• Total of patients treated was 43,068 in 2005. Of 6000 surgeries, 57% were performed free of fees

• Loan volume: $0.25 M• Investment is to be used to construct a teaching institute building• More than 50% of surgery provided at no charge to the patient

• Loan volume: $5 M• Investment is used to refinance debt• Total number of patients treated was 189,050 in 2006. 58% of its services were provided to poor non-paying

patients

• Loan volume: $3 M• Investment goods to be financed: distribution of spectacles, franchising optical shops, focused on Africa

• Loan volume: $1.5 M • Investment is to be used for sustainability planning, training, and building clinics. This is the leading agency for

international eye care in Canada.

Note: All 11 applicants have 3 year financial statements available, audited by eternal financial auditors.

Eye Fund II Highlights

Eye Fund II to commence once Eye Fund 1 is certain

Broader scope to include smaller investments (below $250,000)

Enable new financial intermediaries (IAPB and it’s larger members) to aggregate smaller financing needs

Online survey tool combined with business algorithms to identify, segment and pre-qualify potential investments (Database of 12,000+ eye care providers)

Online education and tools for sustainable organizational development and financing

Possibility of government and development agencies for guarantees

Changing the Competitive Landscape

IAPB to “own” investing pool backed by government guarantees.

This enables IAPB to put its investing pool out for competitive bid. Financial institutions will compete to be the fund manager for this pool of investment because:

– IAPB will have reduced the cost of due diligence by aggregating and pre-qualifying a sizable investing pool attractive to financial institutions

– Secured government guarantees which will enable fund managers to more easily sell a fund with a higher credit rating