2024-12-05 13:27:32 :
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 over the next few years.
“We will consider investing approximately 50% of our capital in [business models] directly and indirectly impact or help address climate challenges,” said Sunil Thakur, Partner, South Asia, Quadria CapitalMint.
Quadria Capital, in partnership with PwC India, last week released a report highlighting the need for private investment in climate-resilient health systems. The report states that India has an investment opportunity of US$3 billion annually in adaptation-focused businesses.
The private equity firm, which manages $3.5 billion in assets globally and about $1 billion in India, is considering investing in businesses in areas such as virtual care services, home health services, preventive care services and digital therapeutics.
“These are models for addressing challenges, whether in terms of climate change mitigation or adaptation,” Thakur said, without naming any potential companies shortlisted for investment.
Models such as virtual health services can help adapt to climate-driven changes, such as increased air pollution, heat waves and natural disasters.
“Through these models, you can provide care to patients who are quarantined,” he said.
Thakur cited digital health platform Medibuddy, one of Quadria’s investments in India, as an example.
“It provides care to employees in the organized sector, helps them with virtual care through consultations, helps them with diagnostics, and helps them with pharmaceuticals,” he said. Quadria has invested more than $125 million in Medibuddy since 2022.
Thakur said: “Climate change is not only an environmental issue but also a profound medical crisis. Its impact on health is enormous, and in the context of climate change, targeted investments are urgently needed to safeguard health outcomes. “
Low investment in health
According to a report jointly released by Quadria Capital, HealthQuad and PwC India, more than 90% of India’s population faces extremely high risks of heat stress, and climate-sensitive diseases are escalating.
Current investment in climate health initiatives is extremely low, with less than 2% of global climate adaptation funding going toward health. Global funding for climate action will reach $1.4 trillion in 2022, 91% of which will be used to mitigate climate change and only 0.5% to improve health outcomes.
In India, $22.5 billion was raised for climate action in 2022, of which $4.7 billion came from equity financing. India’s share of debt instruments is 80%, significantly higher than the global share (59%), highlighting the lack of equity financing and the need for greater private sector participation in the ecosystem.
The report suggests that the Indian healthcare industry is expected to need $16 billion annually by 2030 to address climate-related challenges such as climate change adaptation and mitigation. The country has an annual private investment potential of US$3 billion in adaptation-focused solutions.
Priority areas for intervention
The report highlights three priority areas of intervention that require focus – resilient infrastructure to tackle malnutrition and food crises, innovation to tackle non-communicable diseases, and resilient infrastructure to tackle airborne diseases.
Innovation in non-communicable diseases such as stroke, hypertension, diabetes, etc., focusing on the development of medical products and technologies.
“Innovations such as AI-based heart disease diagnosis (Cardiolog), algorithm-driven coronary health analysis (HeartFlow), and Holter monitor (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 into medication and behavior change.
“A good example is people living with diabetes. Now, diabetes intervention includes both medication and behavior change, so how can you use digital therapeutics to drive that behavior and bring about behavior change,” Thakur said.
The report proposes solutions, including building facilities and systems to withstand the effects of climate change on airborne diseases.
“The biggest impacts of climate change on human health…are very close to us,” Thakur said, highlighting Delhi’s air pollution. “People in Delhi are so close to it that everyone is now becoming very aware. So, action is inevitable. “
Thakur said it’s not just about adding climate-resilient healthcare models to its investment pipeline. Quadria is also focused on existing portfolio companies “helping mitigate damage to the climate and launching products and variants to address climate change adaptation.”
Thakur added that innovations in non-communicable disease management (vaccines, digital therapeutics) and climate-resilient agriculture technologies are receiving the most attention because of their scalability and ability to make an immediate impact.
Data challenges
“A significant challenge is the lack of reliable data and evidence, which makes it difficult to assess risks, measure outcomes and long-term impact, and validate the scalability of solutions,” Thakur said.
Many adaptation strategies are also resource-intensive and complex, leading to potential delays and operational challenges. Addressing these risks requires robust data generation and innovative financing mechanisms.
“Ecosystems often lack financing diversity and rely heavily on debt instruments with limited equity financing,” he said.
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