EBRD to finance new Turkish hospital for $305 million
ANKARA - Anadolu AgencyThe European Bank for Reconstruction and Development (EBRD) has announced backing for a 288 million-euro bond ($305 million) to finance a state-of-the-art hospital campus in the eastern Turkish province of Elazığ.
According to the EBRD, ELZ Finance, a joint venture between global infrastructure company Meridiam and one of Turkey’s major construction companies, Rönesans Holding, will lend the bond proceeds to its sister company ELZ Sağlık Yatırım, which was awarded the 28-year concession by the Turkish Health Ministry to design, build, finance, equip and maintain the new high-tech hospital.
In a bid to boost the bond rating and increase its attractiveness to investors, the EBRD and the World Bank’s Multilateral Investment Guarantee Agency (MIGA) have developed an innovative credit-enhancement mechanism. As part of this scheme, the EBRD has pledged to provide 89 euros million as interim liquidity to mitigate the risks of construction and operation.
“We have developed this innovative credit-enhancement scheme as a risk mitigation instrument to attract much-needed investment in the infrastructure of emerging markets,” said Thomas Maier, managing director for infrastructure at the EBRD.
“We are pioneering the scheme in Turkey and we intend to roll it out across the countries where we invest. Joining forces with MIGA to boost the bond rating demonstrates an ever-closer cooperation between international financial institutions to scale up investment in environmentally friendly, sustainable infrastructure,” Maier said.
The bond issuance has been certified as a “green and social bond” by Vigeo EIRIS, a leading international environmental, social and governance research agency, indicating the environmental and social benefits of the project, the bank said in a statement.
The 1,038-bed Elazığ hospital campus project is part of the government’s large scale hospital-building program under a public-private partnership model, it added.
EBRD announced in October the signing of a comprehensive long-term financing package for the development of a 769.6 million-euro ($841 million) high-tech hospital in İzmir.
İzmir Bayraklı Hospital, which will consist of six buildings and have a total of 2,060 beds, is expected to open for operations in 2019, it said.
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, will design, build, equip and manage the İzmir hospital.
Since 2009, the EBRD has supported five hospital projects in addition to over 200 projects in infrastructure, energy, agribusiness, industry and finance in Turkey, with more than 8 billion euros in financing.