The Cataract Fund launched in March 2018 is an example of an innovative development impact bond launched to fund cataract surgeries among low-income patients in the sub-Saharan region. The pay for performance loan is developed by the Cataract Bond Design Coalition, a collaboration between Outcome Funders – The Fred Hollows Foundation, Conrad N Hilton Foundation, and Sightsavers, Bond Manager – Volta Capital, and the African Eye Foundation. Magrabi ICO Cameroon Eye Institute (MICEI) is African Eye Foundation’s flagship project, the first subspecialty eye care hospital and training institute in Central Asia. The outcome funders and service provider share the risk for driving the intervention with a full capital guarantee to the investors. $2 million of capital was raised from the investors on top of $10 million already invested in the project. MICEI follows a business model similar to Arvind Eye Care, it subsidies costs of low-income patients and charges middle-income patients higher market-driven rates for performing surgeries. This read refers to the case study produced as part of an evaluation of the Cameroon Cataract Bond and the DFID DIBs pilot program, commissioned by the Fred Hollows Foundation and the Department for International Development and undertaken by Ecorys UK, written by Alma Agusti Strid at Ecorys. 
The five-year bond targets number of cataract surgeries with quality outcomes benchmarked to WHO guidelines and financial stability focusing on positive Earnings before interest tax and amortization (EBITA). EBITA is a measure form the income statement. There are three type of income statement – Balance Sheet, Income and Cash Flow Statement. Balance sheet discusses information on assets and liabilities of the firm, income statement discusses revenues and expenses of the firm and income of a firms over a period of time and cash flow from sources of cash in a firm from operating, investing and financing activities. To help underserved communities, the financial structure targets at least 40 percent of the bottom two wealth quantiles of the population in Cameroon by end of year 5.
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Arvind Foundation and African Eye Foundation were key consultants for the project, and to account for commercial and political risk, the interest rates for achieving the desired outcome were increased from 5 to 8 percent. The five-year bond’s structure involves a partial principal repayment after three years, contingent on the outcome measurement. If the outcome is achieved in year 3, 60 percent of the upfront capital ($2 million) is repaid to investors along with 8 percent accrued interest. Otherwise, outcome funders pay 76.5 percent of the principal plus a 4 percent interest. Additionally, the bond includes a failure fee of 4 percent paid to investors in the event of target non-achievement, with the implementor paying 23.5 percent of the principal over five years. Despite the high commercial risk during the bond’s construction due to the ongoing hospital project, after the five-year period, successful attainment of the equity target results in a fee of $1,20,000 paid to the implementor. For comprehensive details, refer to the Cameroon Cataract Bond: A case study produced as part of the Cameroon Cataract Bond Evaluation.
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Note: The article was reedited and posted.