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IFC investing 80 million euros in healthcare facilities in Turkey

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Staff Writer | December 9, 2016
IFC, a member of the World Bank Group, is investing 80 million euros in the next-generation healthcare facilities in Elazig, a city in eastern Turkey that is fast-becoming a medical hub.
Elazig
Investment   The 20-year bond
The project will help improve access to high-quality public health services in the region.

In fiscal year 2016, IFC had a record year in Turkey
The 20-year bond, which totals 288 million euro, is the first project bond financing of a hospital under a public-private partnership (PPP) in Turkey. The IFC-backed project is part of the Turkey Health Transformation Program, an initiative that is designed to achieve a major overhaul of the country’s public hospitals.

The 1000-bed Elazig Integrated Health Campus will comprise five health facilities equipped with ultra-modern technology. The campus will replace outdated and scattered hospitals leading to increased efficiency of healthcare services.

As an anchor investor on the bond issue, IFC, through its large investment, strengthened investor confidence in the country and the project.

IFC’s participation also helped attract a broad and diverse set of international investors to participate in the project bond, providing funding at tenors that are not commonly available in Turkey’s project finance market.

This commercial tranche is supported by an innovative credit enhancement mechanism provided by the European Bank for Reconstruction and Development (EBRD) and World Bank Group’s Multilateral Investment Guarantee Agency (MIGA). The credit enhanced tranche received a Baa2 rating from Moody’s, two notches above the Government of Turkey's current sovereign rating of Turkey.

“We highly value IFC’s participation in this transaction,” said Kamil Yanıkömeroğlu, Chairman of the Board of Rönesans Healthcare and Real Estate divisions.

The bond is also the first “green and social” project bond in Turkey, verified by a major environmental, social and governance rating company, Vigeo. The proceeds will finance construction of a campus, equipped with climate-friendly technologies.

“Capital markets create access to long-term, stable financing, that can play a critical role in expanding affordable healthcare services for a large part of population,” said Aisha Williams, IFC Country Manager for Turkey.

The two largest shareholders in the issuer company's consortium are Ronesans Holding A.S, one of Turkey’s largest construction companies, an IFC equity client, and the leading sponsor in the Healthcare PPP pipeline in Turkey with its PPP investor entity Rönesans Healthcare, as well as global infrastructure fund Meridiam.

Elazig Integrated Health Campus is part of the PPP program developed by the Turkish Ministry of Health.

IFC has supported the program with over $165 million of direct financing and mobilized an additional $245 million for three healthcare PPP projects in Turkey.

As a result, three health campuses, each with several hospitals, will be built in Ankara, Kayseri, and Adana. Public health services are accessible to a large majority of Turkey’s population, whose health care needs are covered by the Universal Health Insurance system.

With a total portfolio of $5billion, Turkey is IFC’s second-largest country of operations globally and host to its largest office outside Washington D.C.

In fiscal year 2016, IFC had a record year in Turkey, investing $1.8 billion, including mobilization.


 

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