The Singapore and New Delhi-based healthcare-focused private equity firm had said earlier this year that it would deploy about $1 billion in the Indian market in the next few years.
“We would be looking at about 50% of our capital that would go into [business models] impacting or helping climate challenge both directly and indirectly,” Sunil Thakur, partner, South Asia at Quadria Capital, told Mint.
Quadria Capital, in partnership with PwC India, released a report last week highlighting the need for private investments in climate-resilient health systems. According to the report, there is a $3 billion annual opportunity for investments in adaptation-focused businesses in India.
The PE firm, which has $3.5 billion of assets under management globally and about $1 billion in India, is looking at investing in businesses in virtual care delivery, home health services, preventive care services, and digital therapeutics.
“These are all models catering to the challenges, both in terms of mitigating as well as adapting to climate change,” Thakur said, without identifying any potential companies shortlisted for investment.
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Models such as virtual healthcare services help adapt to climate-driven changes such as rising air pollution, heatwaves and natural disasters.
“Through these models, you are able to deploy care to patients that are isolated,” he said.
Thakur cited digital healthcare platform Medibuddy, one of Quadria’s India investments, as an example.
“It is delivering care to employees in the organised sector, which is helping them with virtual care through consultation, helping them with diagnostics, and helping them with pharma,” he said. Quadria has invested over $125 million in Medibuddy since 2022.
“Climate change is not just an environmental issue but a profound healthcare crisis. The health implications are immense, and there is a dire need for targeted investment to safeguard health outcomes against the backdrop of a changing climate,” Thakur said.
Low health investment
According to the report by Quadria Capital, in association with HealthQuad and PwC India, over 90% of India’s population is at extremely high risk from heat stress, and climate-sensitive diseases are escalating.
Current investment in climate-health initiatives is critically low, with less than 2% of global climate adaptation funding directed towards health. Global climate action funding in 2022 came to $1.4 trillion, with 91% dedicated to mitigation and a mere 0.5% to enhancing health outcomes.
In India, $22.5 billion was raised for climate action in 2022, with $4.7 billion coming from equity funding. The share of debt-based instruments is 80% in India, significantly higher than the share globally (59%), highlighting the lack of equity funding and the need for higher involvement by the private sector in the ecosystem.
The report suggests that an estimated $16 billion annually is required through 2030 to address climate-related challenges such as adaptation and mitigation in India’s healthcare sector. The potential for annual private investments in adaptation-focused solutions in the country is $3 billion.
Priority intervention areas
The report highlights three priority intervention areas to focus on – resilient infrastructure for malnutrition and food crisis, innovation for non-communicable diseases, and resilient infrastructure for air-borne diseases.
When it comes to innovation for non-communicable diseases such as stroke, hypertension, diabetes, the focus is on development of medical products and technologies.
“Innovations such as AI-based heart disease diagnostics (Cardiolog), algorithm-driven coronary artery health analysis (HeartFlow), and ambulatory ECG monitors (iRhythm) represent significant progress in adapting to heart-related conditions,” the report states.
The second focus area in this segment is digital therapeutics, where care is divided between medication and behavioral change.
“A fine example is people dealing with diabetes. Now diabetes intervention is both medication as well as behavioral change, so how do you use digital therapeutics to bring about that nudge, to bring about that behavioral change,” Thakur said.
The report points to solutions including the construction of facilities and systems to withstand the impact of climate change on air-borne diseases.
“The biggest impact of climate change is on human health…we’re seeing it very close to us,” Thakur said, highlighting the air pollution in Delhi. “People in Delhi are seeing it so close, that individuals are now becoming very conscious. So, the action is inevitable.”
Thakur said it’s not only about adding climate-resilient healthcare models to its investment pipeline. Quadria is also focusing on existing portfolio companies “to help both mitigate the damage to the climate as well as introduce products and variations to deal with adaptation of climate change.”
Innovations in management of non-communicable diseases (vaccines, digital therapeutics) and climate-resilient agricultural technologies attract the most attention, given their scalability and ability to deliver immediate impact, Thakur added.
Data challenges
“A significant challenge is the scarcity of robust data and evidence, making it difficult to assess risks, measure outcomes and long-term impact generated, and validate the scalability of solutions,” Thakur said.
Many adaptation strategies are also resource-intensive and complex, leading to potential delays and operation challenges. Robust data generation as well as innovative financing mechanisms are needed to address these risks.
“The ecosystem often lacks funding diversity, relying heavily on debt-based instruments with limited equity financing,” he said.
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