Elazığ Integrated Health Campus PPP

Overview:

• The Elazığ Integrated Health Campus is a €360 million PPP hospital construction project in eastern Turkey.
• It employs a hybrid financing structure made up of a loan and bond issuance.
• The bond was arranged and coordinated by HSBC and is the first example of a greenfield project bond in Turkey.
• It was issued by ELZ Finance, a Luxembourg SPV that is a joint venture between Meridiam and Rönesans Holding, with the proceeds raised then lent to ELZ Sağlık Yatırım, the project company. Investors will continue to purchase bonds on fixed dates during the construction period, ensuring the project company receives funds gradually and reducing the cost of carry.
• As part of this scheme, the European Bank of Reconstruction and Development (EBRD) is pledging to provide €89 million as interim liquidity to mitigate the risks of construction and operation
• It was the first time the EBRD had provided a subordinated liquidity facility and also the first time a political risk insurance policy from the Multilateral Investment Guarantee Agency was used alongside a subordinated liquidity facility.
• These factors combined allowed the bond to achieve a credit rating two notches higher than Turkey's sovereign debt rating.
• Meridiam, Rönesans Holding, Sam, Sila and YYY are acting as sponsors.
• It is part of the Turkish Ministry of Health’s $10 billion plan to deliver twenty-nine PPPs and 41,000 new hospital beds, a programme that has also includes the Adana Integrated Healthcare Campus, the Bilkent Integrated Health Campus, the İzmir Bayraklı Integrated Health Campus, the Gaziantep Integrated Health Campus, the Kocaeli Integrated Healthcare Campus and the Konya Karatay Integrated Health Campus.

Jon Moore - Journalist