The FINANCIAL -- Contributing to a comprehensive financial package, the EBRD is providing an €80 million loan to the construction of a new high-tech hospital in Gaziantep, the major city of south-eastern Turkey.
With a population of close to two million people, Gaziantep is one of Turkey's oldest cities and among its most populous. It has recently seen a sharp increase in population, partly due to the influx of refugees from neighbouring Syria. Rapid population growth is putting a serious strain on healthcare services.
The new €600 million health campus will be built and maintained by major South Korean investors while Turkey’s Ministry of Health will provide medical services under a public-partnership model, according to EBRD.
The project is part of the government programme to build or expand hospitals across the country in collaboration with the private sector. It is intended to improve Turkey’s availability of resources for delivering quality services in hospitals.
The new Gaziantep hospital, scheduled to begin operations by 2020, will have a total capacity of 1,875 beds and consist of a general hospital, a women and children's hospital and a cardiovascular and oncology hospital. It will also house a diagnostic and treatment centre, health support facilities and a heliport.
Refugees in Turkey have access to the same cost-free medical treatment in public hospitals as local citizens, regardless of insurance coverage available to them, and so are expected to benefit equally from the new hospital.
Investors in the project include South Korea’s Samsung C&T Corporation, Italian industrial group Salini Impregilo S.p.A, Turkish industrial construction company Kayi Insaat Sanayii ve Tiacaret A.S., and Korea-Turkey Gaziantep Healthcare Private Equity Investment Fund (PEIF).
Among the investors in the Korea-Turkey Gaziantep Healthcare PEIF, are large institutional investors such as Samsung Life Insurance Co., Ltd., the largest insurance company in Korea and the Korea Development Bank.
A mix of multilaterals, export credit agencies and commercial banks are providing a debt package of around €480m with an 18-year tenor.
In addition to the EBRD’s €80 million loan, the European Investment Bank is supporting the project with €120 million. The investment also has the involvement of South Korea’s two export credit agencies: Export-Import Bank of Korea (KEXIM) and K-sure. The former is providing a €72 million loan as well as a €70 million guarantee to the Korean financial institutions NH Bank, KEB Hana Bank and Samsung Life Insurance, and the latter is contributing with a €142 million guaranteed loan.
MIGA, a member of the World Bank Group, is providing guarantees covering equity investments worth €60 million.
Through its work with the Turkish Ministry of Health, the EBRD has also been instrumental in enabling greater private-sector involvement in the hospital sector.
The Bank started investing in Turkey in 2009 and currently operates from offices in Istanbul, Ankara and Gaziantep. To date the EBRD has invested over €9 billion in the country through more than 230 projects in infrastructure, energy, agribusiness, industry and finance. It has also mobilised nearly €20 billion for these ventures from other sources of financing. Some 98 per cent of the Bank’s investments in Turkey are in the private sector.