Istanbul, Turkey, December 8, 2016—IFC,
a member of the World Bank Group, is investing 80 million euro in a project
bond that will support the construction of next-generation healthcare facilities
in Elazig, a city in eastern Turkey that is fast-becoming a medical hub.
The project will help improve access to high-quality public health services
in the region.
The 20-year bond, which totals 288 million euro, is the first project bond
financing of a hospital under a public-private partnership (PPP) in Turkey.
The IFC-backed project is part of the Turkey Health Transformation Program,
a unique initiative that is designed to achieve a major overhaul of the
country’s public hospitals. The 1000-bed Elazig Integrated Health Campus
will comprise five health facilities equipped with ultra-modern technology.
The campus will replace outdated and scattered hospitals leading to increased
efficiency of healthcare services.
As an anchor investor on the bond issue, IFC, through its large investment,
strengthened investor confidence in the country and the project. IFC’s
participation also helped attract a broad and diverse set of international
investors to participate in the project bond, providing funding at tenors
that are not commonly available in Turkey’s project finance market. This
commercial tranche is supported by an innovative credit enhancement mechanism
provided by the European Bank for Reconstruction and Development (EBRD)
and World Bank Group’s Multilateral Investment Guarantee Agency (MIGA).
The credit enhanced tranche received a Baa2 rating from Moody’s, two notches
above the Government of Turkey's current sovereign rating of Turkey.
“We highly value IFC’s participation in this transaction,” said Kamil
Yanıkömeroğlu, Chairman of the Board of Rönesans Healthcare and Real Estate
divisions. “As an international financial institution experienced in health
PPPs as well as enhancing capital market debuts, IFC has played an important
role in helping us tap into a diversified set of institutional investors.”
The bond is also the first “green and social” project bond in Turkey,
verified by a major environmental, social and governance rating company,
Vigeo. The proceeds will finance construction of a campus, equipped with
“Capital markets create access to long-term, stable financing, that can
play a critical role in expanding affordable healthcare services for a
large part of population,” said Aisha Williams, IFC Country Manager for
Turkey. “Successful issuance of the bond for the health campus in Elazig
is expected to pioneer the market, allowing other projects to explore similar
structures for mobilizing long-term financing for Turkey’s healthcare
The two largest shareholders in the issuer company's consortium are Ronesans
Holding A.S, one of Turkey’s largest construction companies, an IFC equity
client, and the leading sponsor in the Healthcare PPP pipeline in Turkey
with its PPP investor entity Rönesans Healthcare, as well as global infrastructure
This investment supports the World Bank Group’s Country Partnership Strategy
for Turkey as it helps improve equity and social services through contributing
to a more effective and financially sustainable health system.
Elazig Integrated Health Campus is part of the PPP program developed by
the Turkish Ministry of Health.
IFC has supported the program with over $165 million of direct financing
and mobilized an additional $245 million for three healthcare PPP projects
in Turkey. As a result, three health campuses, each with several hospitals,
will be built in Ankara, Kayseri, and Adana. Public health services are
accessible to a large majority of Turkey’s population, whose health care
needs are covered by the Universal Health Insurance system.
With a total portfolio of $5billion, Turkey is IFC’s second-largest country
of operations globally and host to its largest office outside Washington
D.C. In fiscal year 2016, IFC had a record year in Turkey, investing $1.8
billion, including mobilization.
IFC, a member of the World Bank Group, is the largest global development
institution focused on the private sector in emerging markets. Working
with 2,000 businesses worldwide, we use our six decades of experience to
create opportunity where it’s needed most. In FY16, our long-term investments
in developing countries rose to nearly $19 billion, leveraging our capital,
expertise and influence to help the private sector end extreme poverty
and boost shared prosperity. For more information, visit www.ifc.org