Turkey’s giant hospital project lures $1.5 billion financing from int’l investors

ISTANBUL

Turkey’s Rönesans Health Investment and Japan’s Sojitz have concluded a $1.5 billion (163 billion Japanese yens) financial deal with eight international investors for their joint city hospital in central Istanbul. 

Some 80 percent of the total investment of the project was thus met with the financial closing agreement, which was signed in Istanbul on July 21 by the project owners with JBIC, NEXI, SMBC, BTMU, Nippon Life Insurance Company, Dai-ichi Life Insurance Company, the Iyo Bank and Standard Chartered.

In a bid to be one of the world’s largest hospitals with a capacity of 2,700 beds, Istanbul’s İkitelli City Hospital will provide and create 10,000 jobs when it is commissioned, according to a follow-up press release from Rönesans.
 
The hospital will provide services to 23,600 patients on daily basis. Its construction is planned to commence on Oct. 1 and to be completed within 36 months. To be equipped with more than 2,000 isolators, the hospital will be the world’s largest building with seismic isolators, which enables it to be able to continue its normal operation even during big earthquakes.

Erman Ilıcak, president of Rönesans Holding, said the hospital would be built on an over 1 million-square-meter area by more than 5,000 workers in a three-year period. 

“This hospital will play a key role in turning Istanbul into a health capital and health tourism hub when it becomes fully operational,” he added.

Rönesans Healthcare Investment chair Kamil Yanıkömeroğlu said the hospital would be built for nearly 203 billion Japanese yens ($1.82 billion), adding that the new deal would be a key in financing the project. 

“Such a big investment by our Japanese partner and other financial institutions for an 18-year term shows their confidence in Turkey’s strong economy and Rönesans’ global know-how,” he added. 

The company plans to build healthcare facilities with almost 3,200,000 square-meter construction area and capacity of 9,500 beds, with an investment of $4.3 billion through Public-Private-Partnership (PPP) model in Turkey until 2020, according to the release.

In the PPP model, where public investments are made by the private sector and leased out to the state for a pre-defined time period, the private sector is obliged to provide some services desired by the public throughout the term of lease.  

Meanwhile, Yanıkömeroğlu told Reuters that Rönesans’ healthcare unit signed a preliminary PPP deal for a $500 million hospital project in Kazakhstan.

He also said Ronesans was “very close” to agreeing on a PPP deal with the Russian government for hospital projects.