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The African Development Bank has approved a $20 million equity investment in Rx Healthcare Fund (RxHF), a healthcare-focused private equity fund, which aims to meet the growing demand for high-quality healthcare services in North Africa and Sub-Saharan Africa.

According to a statement released on Friday, the AfDB said its financing will assist RxHF to provide growth capital to promising companies operating in diagnostics, hospitals, and pharmaceuticals. RxHF’s investments will begin in Egypt, Tunisia and Morocco and then scale-up to Nigeria, Ethiopia, Kenya and Sudan.

“Africa is hampered by the widening healthcare delivery gap that is characterized by insufficient healthcare infrastructure, workforce shortages and low insurance coverage in the face of a disproportionate disease burden,” the AfDB said. “The target client of the RxHF is the middle-income class that needs specialized high quality, but affordable healthcare service within Africa to benefit from the Fund’s investments geared towards mid-size healthcare facilities.”

RxHF is managed by Rx Health Management, which was founded by Hatem Elgabay, a former Egyptian health minister. The fund aims to raise $200 million to invest in African healthcare by the middle of 2017.

“The Bank will be the first Africa-based institution to participate with an equity investment of US $20 million, which will support unlocking African capital and catalyse financing of other development finance institutions and commercial investors,” the AfDB said. “As an Advisory Board member, the Bank will ensure that transparency, social and environmental, and corporate governance best practices are adhered to both at the Fund and the portfolio company level.”