State-of-the-art hospital complex to be built under public-private partnership scheme
The European Bank for Reconstruction and Development (EBRD), Export Development Canada (EDC) and the Overseas Private Investment Corporation (OPIC), the U.S. Government’s development finance institution, are co-financing the development of a €769.6 million high-tech hospital in Izmir, Turkey’s third largest city.
The Izmir Bayrakli hospital will be designed, built, equipped and managed by the private developer İzmir Bayraklı Hastane Yatirim Ve Sağlık Hizmetleri A.Ş, a joint venture between global industrial company GE and Turkish corporations GAMA Holding A.S. and Türkerler İnşaat.
The comprehensive long-term financing package which brought together six international financiers was signed today in Ankara in the presence of Turkish President Recep Tayyip Erdoğan.
President Erdoğan said: “Progress in health care services will bring about the development of the health care industry in our country. With these investments, we aim to make our country one of the top five countries in the world for medical tourism.”
Faced with the need for large investments, the Turkish government is seeking to engage private sector resources and know-how to construct and manage infrastructure facilities more quickly and efficiently.
The new health complex will span several buildings and have a total of 2,060 beds, providing better hospital facilities for the city and the region. Under a 28-year concession, the buildings will be leased to Turkey’s Ministry of Health. The private developer will act as facilities manager, providing building maintenance and non-clinical services, while medical services will remain the remit of the Ministry of Health. The hospital is expected to become operational in 2019.
As part of the financing package, the EBRD has arranged a €298.6 million syndicated loan under its A/B loan structure, with €85 million for the Bank’s own account and €213.6 million syndicated to UniCredit S.p.A., Industrial and Commercial Bank of China Ltd Dubai Branch and Intesa Sanpaolo S.p.A. OPIC of the United States and EDC of Canada are providing parallel financing of US$ 250 million and €65 million, respectively. This is the first health care PPP project financing in Turkey to involve co-financing by these two institutions.
Jean-Patrick Marquet, Director for EBRD operations in Turkey, said: “Arranging this comprehensive long-term financial package for a new Izmir hospital is part of the EBRD’s efforts to catalyse private sector involvement in critical infrastructure in Turkey which brings money and know-how, and ultimately benefits people's lives across the country.”
The hospital in Izmir is the fourth EBRD-financed project under a government programme to build or expand hospitals across the country in collaboration with the private sector. The Bank has also been working closely with the Turkish Ministry of Health over the past four years to enable greater private sector involvement in the hospital sector.
Sven List, EDC Vice-President, Structured and Project Finance said: “EDC is very pleased to have participated in arranging financing for this important PPP hospital project in Turkey while providing support to our global strategic client, GE.”
OPIC President and CEO Elizabeth L. Littlefield stated: “OPIC is proud to provide financing that will contribute to the construction and management of new hospital campuses in Turkey. This Izmir transaction will significantly improve the well-being of Turkish residents by increasing their access to high-quality health care services.”
The GAMA Holding A.S., Türkerler İnşaat and GE consortium is also developing the Kocaeli Hospital PPP in the Izmit District of Kocaeli Province. The EBRD’s board of directors has approved financing for this project.
Hakan Özman, Deputy Chairman and CEO of GAMA Holding A.Ş. commented: “Today’s signing is a major milestone in our long-term commitment to the Kocaeli and Izmir Bayrakli projects. GE brings a strong track-record of health care PPPs around the world and our long-term participation as an equity investor and technology provider will be essential in realising the Ministry of Health’s vision on these projects. With critical funding and project partners now in place the consortium will look to accelerate the construction and delivery of these projects.”
Kazım Türker, CEO of Türkerler İnşaat A.Ş. said: “In support of the government’s Hedef 2023 health care development plan, the consortium is on a clear path to deliver its commitment to the Ministry of Health on the Kocaeli and Izmir Bayrakli projects. The commitment of our foreign partners underscores long-term confidence in Turkey’s PPP strategy and in Turkey’s development goals.”
John Flannery, President and CEO of GE Healthcare said: “At GE Healthcare we believe that real health care transformation comes from a willingness to embrace innovation. To that end, the İzmir and Kocaeli Integrated Healthcare Campus Projects are among the largest and most complex PPP projects globally that GE Healthcare has invested in to date, and they demonstrate our commitment to developing new business models and risk-sharing to drive sustainable health care development.”
EDC is Canada’s export credit agency, providing financial services for companies that buy from Canadian companies, or those that have Canadian supply and services in their corporate value chains. EDC’s financing can be used for capex and/or project finance requirements, either through bilateral or syndicated corporate facilities. Operating on commercial principles, EDC has a partnership-preferred philosophy to collaborate with private sector financial institutions to share risk and create greater capacity for Canadian trade transactions. EDC is committed to corporate social responsibility, and it takes into account the environmental and social impacts of its transactions. For more information, visit www.edc.ca.
OPIC is the US government’s development finance institution. It mobilises private capital to help address critical development challenges and in doing so, advances US foreign policy and national security priorities. Because OPIC works with the US private sector, it helps US businesses gain footholds in emerging markets, catalysing revenues, jobs and growth opportunities both at home and abroad. OPIC achieves its mission by providing investors with financing, political risk insurance, and support for private equity investment funds, when commercial funding cannot be obtained elsewhere. Established as an agency of the US government in 1971, OPIC operates on a self-sustaining basis at no net cost to American taxpayers. All OPIC projects adhere to high environmental and social standards and respect human rights, including workers’ rights. By mandating high standards, OPIC aims to raise the industry and regional standards of the countries where it funds projects. OPIC services are available for new and expanding business enterprises in more than 160 countries worldwide. For more information, visit www.opic.gov.
About GAMA Holding A.S.
GAMA, founded in 1959, builds power plants, refineries, cement, petro-chemical and gas plants, factories, high-rise buildings, water treatment plants and transmission lines, bridges, and other infrastructure projects along with funding various energy investments. GAMA is a leading international contractor that has successfully completed 400 projects in 25 countries extending from Ireland in the west to Russia’s Sakhalin Island in the east. GAMA Holding companies currently undertake projects valued US$ 4.5 billion in 10 countries. Besides serving as an EPC company and contractor, GAMA also invests in energy and health projects. For more information visit, www.gama.com.tr.
Turkerler Inşaat A.Ş. was established in Ankara-Turkey in 1993 by undertaking infrastructure and superstructure projects. Turkerler’s main business scope includes the development and construction of large scale projects in electricity generation, distribution and trade, natural gas distribution, healthcare PPPs, real estate sectors among others. Turkerler has 49% shareholding in Ankara Etlik Integrated Health Campus PPP Project with a total bed capacity of 3,577 beds.
GE (NYSE: GE) is the world’s digital industrial company, transforming industry with software-defined machines and solutions that are connected, responsive and predictive. GE is organised around a global exchange of knowledge, the "GE Store," through which each business shares and accesses the same technology, markets, structure and intellect. Each invention further fuels innovation and application across our industrial sectors. With people, services, technology and scale, GE delivers better outcomes for customers by speaking the language of industry. For more information, visit www.ge.com.
About GE Healthcare
GE Healthcare provides transformational medical technologies and services to meet the demand for increased access, enhanced quality and more affordable health care around the world. GE works on things that matter – great people and technologies taking on tough challenges. From medical imaging, software and IT, patient monitoring and diagnostics to drug discovery, biopharmaceutical manufacturing technologies and performance improvement solutions, GE Healthcare helps medical professionals deliver great health care to their patients. For more information, visit www.gehealthcare.com.