In South and Central Asia, where access to healthcare remains a perpetual challenge for most people, the Aga Khan University Hospital (AKUH) in Karachi provides exemplary treatment. Since its establishment in 1983, the hospital has served as a hub of research and innovation. AKUH is the first hospital in Pakistan to receive the U.S. Joint Commission International Accreditation, a seal of approval for achieving and maintaining healthcare to the highest international standard. The hospital operates a network of over 190 Laboratory Specimens Collection Units across Pakistan and Afghanistan, with more than 7 million clinical laboratory tests performed annually.

To make healthcare accessible to people of all income levels, AKUH already uses payments for premium healthcare services to subsidize care for low- and middle-income patients, as well as the education and research missions of Aga Khan University (AKU). More than 70 percent of the over 600,000 patients who visit AKUH every year come from low- and middle-income backgrounds. Ever since the hospital opened, its Patient Welfare Program has helped widen access this way and benefits one in every four patients admitted to the General Ward.

The question for the Aga Khan Development Network (AKDN) became: How do we grow that exemplary care to cover even more people in this region that desperately needs it?

The answer involved impact investing. In July 2013, the Aga Khan Foundation U.S.A. (AKF USA) completed its second impact investment from its own portfolio of Mission Related Investments, which primarily aims to mobilize investment capital for high-impact social enterprises within AKDN. AKF USA partnered with the Overseas Private Investment Corporation (OPIC), the U.S. Government’s development finance institution, to lend to the Aga Khan Hospital and Medical College Foundation for the expansion of AKUH.

Through the deal, AKF USA invested $7.5 million for the expansion of medical facilities at AKUH to support the hospital’s vision to expand healthcare access across Pakistan. In making its investments, AKF USA takes subordinated positions, always alongside a primary investment from a partner, and usually bolstered by grants. OPIC invested $30 million, cementing AKF USA’s first partnership with that institution. The investment will support the construction of an ambulatory care building, a child-care center, a new private wing, a center for innovation in medical education, and neonatal, medical and pediatric intensive care units.

The expansion of medical facilities will directly enable additional admissions and an increased number of outpatients to the hospital. Furthermore, the added revenue generated will support the Patient Welfare Program and provide additional financial assistance to students at AKU, their academic programs, and continued research.

A growing challenge in the impact investing field has been determining how to measure impact at the larger sector level, not just at the level of the individual venture. AKUH’s extensive and diversified reach helps address that; its scope allows for measurement of positive externalities (that is, benefits for others outside the immediate investment) that it creates in the health and education sectors broadly. In addition, AKU has for over 30 years nurtured leaders — more than 11,000 alumni — who help shape practice and policy in professions across a number of countries.

AKF USA is humbled by the opportunity to be a part of an investment that effectively demonstrates the ability of impact investing to generate social and financial returns through a respected agency in AKDN. To learn more about our impact investing work, visit here.

By Farnaz Gulamhussein, Impact Investing Fellow at the Aga Khan Foundation U.S.A.