Provision of a senior loan of up to EUR 40 million to Ronesans Holding A.S. ("Ronesans") and Ronesans Saglik Yatirim A.S. ("Ronesans Healthcare"), the umbrella company of Ronesans Holding, for healthcare sector investments. The proceeds of the loan will be used mainly to refinance short-term loans used for equity injections in the Istanbul Ikitelli PPP Hospital Project. The remainder will be used by RSY Saglik Ticari A.S., the commercial area management company, and RSM Isletme Hizmetleri A.S., the facility management company, for investments in the Istanbul Ikitelli PPP Hospital.
The operation will enable Ronesans Healthcare to restructure its balance sheet and eliminate the maturity mismatch between its assets and liabilities by providing longer term financing not currently available in the market. In addition, the operation will promote gender and inclusion through the implementation of a Gender Equal Opportunities Action Plan and a comprehensive Gender Audit, reviewing the design of the Ronesans Healthcare facilities and service delivery methods at the Ikitelli PPP Hospital.
ETI score: 62
The transition impact of the project will be derived from:
1) Gender and Inclusion: The project contributes to gender inclusion by strengthening equal opportunity measures, increasing women's employment in technical positions at Istanbul Ikitelli PPP Hospital and addressing employees' care burden. A gender audit of the hospital facilities will further improve women's access to healthcare services by identifying key gender barriers related to the physical and operational characteristics of the facility.
2) Resilience: The project will strengthen Ronesans Healthcare's financial resilience through balance sheet restructuring to achieve a better alignment between the company's projected income from its operating companies and its debt service obligations.
RONESANS HOLDING AS
Ronesans Holding A.S. is a diversified conglomerate/holding company with activities in construction, real estate development and energy, incorporated in 1993. It operates in Turkey, Russia, Europe and various emerging markets in the CIS and MENA regions. Ronesans is owned 90% by Erman Ilicak, 4.75% by Ipek Ilicak and the remaining shares are held by IFC.
RONESANS SAGLIK YATIRIM A.S
Established in 2012, Ronesans Saglik Yatirim A.S. operates under Ronesans Real Estate Development and is the investment vehicle of Ronesans Holding in the health sector. The company acts as the holding of operational entities responsible from the design, construction, operation and maintenance of healthcare facilities and providing certain services for a period of 25 years following the construction period.
EBRD Finance Summary
Total Project Cost
Higher inclusion standards: Ronesans Healthcare will benefit from the EBRD expertise on strengthening equal opportunities practices.
Environmental and Social Summary
Categorised B under the 2019 ESP. E&S Due Diligence (ESDD) included reviews of the Environmental and Social Impact Assessment (ESIA), Environmental and Social Action Plan (ESAP), Stakeholder Engagement Plan (SEP), the lenders' supervisor report (January 2020) and the 2019 annual Environmental & Social report to MIGA. Furthermore, the Bank appointed independent consultants who have reviewed the labour audit reports and life and fire safety audit report, discussed with the clients and assessed the Project's E&S performance against EBRD PRs (March 2020). Although no national EIA was required for the project, the Company had carried out (on a voluntary basis) a full ESIA for the Project in accordance with IFC Performance Standards (PSs) and as required by the existing lenders. Non-technical Summary (NTS), ESIA, ESAP and SEP had been disclosed by the client.
The ESDD showed that the client has adequate E&S risk management capacities and the Project (under the lender technical supervisor's regular monitoring) has been developed in line with EBRD PRs to date. However, the unfolding COVID 19 pandemic is imposing specific risks on the workforce during the current final phase of construction and possibly during the early days of the operation. The consultants could not visit the site due to the travel restrictions resulting from the COVID 19 pandemic. Approximately 6,000 construction workers are currently working and living on site. The client has already developed and implementing a COVID-19 risk assessment and a response plan. The updated ESMS documentation including SEP for operation will also address the health and safety risks associated with COVID 19 pandemic and agreed with the client.
ESDD confirmed that Environmental and Occupational Health & Safety (OHS) management have been carried out in accordance with ISO14001 and OHSAS18001. OHS induction and regular training, external and internal OHS audits regularly take place at the site.
ESDD also shows that there are no resettlement and economic displacement associated with the project. There is a minor risk of flood at a small parcel on the project site but the elevation difference between the creek bed and the Project site eliminates that risk. In addition, this particular parcel is free from any building structure. As the site is in an active seismic zone, the design was prepared based on the site specific seismic hazard & design based earthquake ground motion identification study, which was carried out in 2016. Chance finding procedures have been in place and no archaeological item has been found at the site.
Noise, dust & emission have been monitored at the site throughout construction, and the findings are below the national permissible parameters. Water supply for the operational stage will come from the municipality. Wastewater will be treated at the municipal wastewater treatment plan run by Istanbul Water & Sewage Administration (ISKI). Construction-related waste is sorted at the site. During operation, medical waste will be incinerated at the medical incineration & sterilization plant in Kemerburgaz, Odayeri. Hazardous waste will be disposed of at the hazardous waste landfill in Sile Komurada. In accordance with IFC's requirement, a Health Care Waste Management System (HWMS) will be implemented.
The third party life & fire safety audit has been carried out. It was found that the main hospital's life and fire safety design provisions are not fully compliant with national and international standards while the other building are satisfactory against the standards. Therefore, a checklist and concrete actions have been listed, and these actions will be completed and will continue to be monitored by the LTA (lender's technical adviser).
Grievance mechanisms for the workers have been in place. The third party consultants' review of three labour audits concluded that the audits were not comprehensive, lacking of references to compliant worker accommodation, disproportionate sampling (250 female workers not interviewed) and inadequacies in the grievance redress mechanism. Therefore, EPC-C will strengthen construction worker labour management during the remaining construction period.
The existing SEP included the following activities: holding dedicated meetings with governmental authorities and Civil Society Organisations (CSOs); soliciting opinions from governmental authorities (i.e. the Ministry of Health, Ministry of Culture & Tourism) and CSOs on the Project Information Document; and sending information packs to headmen of neighbourhoods. The client organised a public consultation meeting on the draft ESIA and disclosed the final ESIA documentation to the public in 2014. The updated SEP needs to focus on the operational stage and reflect possible COVID 19 concerns.
The updated ESAP includes an ESM system for both the construction & operation including Medical Waste Management System (MWMS), construction labour and OHS management, a COVID 19 emergency response plan, a life & fire safety check list and action plan, infection management, Antimicrobial Resistance (AMR) awareness, grievance mechanisms for the workers and public amongst others. For the Project, the client is required to continue to implement the updated ESMS & SEP to comply with EBRD PRs and submit an annual E&S report to the Bank.
Technical Cooperation and Grant Financing
Technical Cooperation of EUR 120,000 will be used in total for (i) an Equal Opportunities study to increase the share of women among the workforce of the Borrower and (ii) a comprehensive Gender Audit reviewing the Borrower's healthcare facilities' design and service delivery methods to identify opportunities to better serve women and children.
Company Contact Information
Ronesans Saglik Yatirim A.S.
PSD last updated
23 Apr 2020
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