EBRD, Canada’s EDC and OPIC of US finance İzmir hospital in Turkey

ANKARA

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-euro high-tech hospital in İzmir. 

The comprehensive long-term financing package which brought together six international financiers was signed on Oct. 20 in Ankara in the presence of Turkish President Recep Tayyip Erdoğan. 

The İzmir Bayraklı 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.Ş. and Türkerler İnşaat, said a follow-up written statement by financiers. 

“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,” Erdoğan said.

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. 

Turkey’s public-private-partnership (PPP) model healthcare projects, dubbed “city hospitals,” are receiving significant amounts of investment. The PPP model city hospitals program is a very large program which will result in the creations of thousands of beds, according to proponents. Turkey’s city hospitals will include some large departments such as cancer, general surgery and orthopedics. Nearly 80 percent of the total investment in the project will be made by the private sector.

The new health complex in İzmir will span several buildings and have a total of 2,060 beds, providing better hospital facilities for the city and the region, according to the statement. Under a 28-year concession, the buildings will be leased to Turkey’s Health Ministry. 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. The hospital is expected to become operational in 2019.

As part of the financing package, the EBRD has arranged 298.6 million euros in syndicated loans under its A/B loan structure, with 85 million euros for the bank’s own account and 213.6 million euros of syndicated funds to UniCredit S.p.A., the Industrial and Commercial Bank of China Ltd Dubai Branch and Intesa Sanpaolo S.p.A. OPIC and EDC are providing parallel financing of $250 million and 65 million euros, respectively. This is the first health care PPP project financing in Turkey to involve co-financing by OPIC and EDC.