DUBAI: UK's development finance institutionCDC and UAE's Abraaj Group, a leading investor in global growth markets, have jointly invested $17.5 million in Rainbow group of hospitals based in Andhra Pradesh.
This is CDC's first direct equity investment in India since the launch of its new strategy in late 2012.
The investment builds on Abraaj's long-standing partnerships with healthcare institutions in South Asia and represents its sixth healthcare investment in the region.
"This investment let's us expand and develop our high-quality medical facilities, allowing us to replicate the successful pioneering model across (India), including in cities such as Bangalore, Chennai and Pune," said Ramesh Kancharala, CMD of Rainbow Hospitals.
"In parallel, we would like to develop tertiary paediatric care in tier two cities like Vizag and Kurnool. The current investment will give us the capacity to expand the number of beds from the current level of over 450 to close to 1,000 by 2017," he said.
Srini Nagarajan, CDC's Regional Director for South Asia, explained the rationale behind the investment by saying the gap in provision of healthcare in India will need to be plugged by the private sector with demand expected to grow at around 15 percent per annum over the next decade.
"We'll help the business develop its plan to become a national centre of excellence for the teaching of paediatric medicine and for helping other institutions to deliver quality care with a focus on lower income groups," he said.
Rainbow Hospitals, established in 1999, is one of India's largest specialised paediatric and maternity care company with four maternity, paediatric and neonatal intensive care units, and one outpatient clinic in Hyderabad.