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1 Supporting Private Health Care in Emerging Markets January 2011.

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Presentation on theme: "1 Supporting Private Health Care in Emerging Markets January 2011."— Presentation transcript:

1 1 Supporting Private Health Care in Emerging Markets January 2011

2 2 International Finance Corporation at a glance History, ownership and vision Founded in 1956 to foster private sector investment in the developing world Part of the World Bank Group and owned by its 179 member countries Vision: That poor people have the opportunity to escape poverty and to improve their lives. IFC Financing as of June 30, 2010 Total Commitments: US$12.7 billion for own account, US$5.4 billion mobilized *Includes loans, equity, guarantees, risk management products Infrastructure 16% Global Manufacturing and Services 17% Subnational Finance 2% Private Equity and Investment Funds 5% Health and Education 3% Global Financial Markets Group 37% Oil, Gas, Mining, and Chemicals 9% Agribusiness 6% Global ICT 4% IFC Portfolio as of June 30, 2010, by Industry Total US$38.9 Billion IFC Portfolio as of June 30, 2010, by Region Total US$38.9 Billion Middle East and North Africa 11% Europe and Central Asia 25% East Asia and the Pacific 14% Sub-Saharan Africa 13% South Asia 11% Global 1% Latin America and the Caribbean 25% IFC FY10 Annual Report data

3 3 IFC Investment Strategy: 3 Fundamental Principles Commercially viable investments ―Market based ―Must produce returns Value added beyond capital ―Opportunity to help clients achieve higher standards of management and social responsibility Strong development impact ―Support projects that will expand much needed services in a socially and environmentally responsible way

4 4 IFC has a well established franchise in Europe & Central Asia Historical Commitments US$ millions Fiscal Year 2010 Commitments US$ millions Loans US$ 1,807 Syndications US$387 Guarantees US$539 Equity US$624 US$ 3,357 million IFC Portfolio by Country (largest exposure) US$ millions Turkey US$2,032 Russia US$2,286 US$ 12,278 million Ukraine US$880 Total Committed PortfolioUS$12,278 Committed portfolio for IFC’s accountUS$9,691 Committed portfolio held for others (loan and guarantee participants) US$2,587 Regional Portfolio US$ millions IFC FY10 Annual Report data

5  Health and Education Sectors are corporate priorities and pillars of IFC’s Strategy  FY 2010: committed $429mil in 17 projects IFC Health and Education at a glance Health Sector: 97 private health projects in 36 countries US$ 4.8bil of total project value US$ 1.2bil of CHE total investments Education Sector: 67 private education projects in 34 countries US$ 1.5bil of total project value US$ 505mil of CHE total investments INVESTMENT TRACK RECORD 5

6 6 Objective: Support Growth of Sustainable Health Care Companies To achieve this objective we Provide financial advice and innovative financing to private and sub national healthcare and education companies Use our global industry expertise to advise companies and shape projects and maximize chances of success Promote best practices and set industry standards Build credibility of clients in early development stages Support expansion of our clients to other countries/ regions Mobilize other private sector investors Support IFC’s advisory department in their privatization / PPP advisory work Work with the WB to help countries improve regulatory environment for provision of education and healthcare

7 7 IFC has partnered with leading health companies MedLife

8 8 MedLife, Romania Sponsor: MedLife, a provider of a range of medical services through a network of 12 outpatient clinics and 3 laboratories in Bucharest Project: Construction of (i) a 100-bed hospital in Bucharest, and (ii) 5 40-bed hospitals in smaller cities in Romania Project Cost: US$24.8 million IFC Support: IFC provided a US$5 million senior loan and $5 million equity IFC provided advice on corporate governance Result MedLife entered the hospital business with completion of a hospital in Bucharest in July 2007 IFC’s investment raised profile of MedLife in local financial market

9 9 Euromedic, Eastern Europe Sponsor: Euromedic, a leading provider of diagnostic imaging and hemodialysis services throughout Southern, Central and Eastern Europe (Hungary, Poland, Romania & Bosnia). Project: Project 1: Expansion of diagnostic imaging network in Hungary and establishment of diagnostic and hemodialysis network in Poland. Project 2: Expansion of the network in Poland, Hungary, Romania and Bosnia. Establishment of new networks in region including Croatia. Project Cost: Project 1: $37 million, Project 2: $26 million IFC Support: IFC provided € 24.4 million in senior loans Result: IFC provided Euromedic funding not available to it in Eastern Europe Euromedic’s 21 diagnostic centers increased access to high quality private healthcare for local population Euromedic was able to integrate its services in the public healthcare system

10 10 Hospital Metropolitano S.A., Nicaragua Sponsor: The Pellas Group, one of the largest conglomerates in Central America with diversified presence in various industries. Project: Expansion with new 32-bed hospital building; construction of an oncology center and 67 new medical offices building; refinancing of existing bank debt Project Cost: US$25.9 million IFC Support: Provided US$10 million senior secured A loan and US$1 million income participating C loan Results: Access to local high quality healthcare in Nicaragua Construction of the first integrated oncology center in Nicaragua Continuous efforts to expand health services to lower income markets Creation of center of excellence for the country and region

11 11 Thank you Michele Shuey Principal Investment Officer, IFC +1 202 473 8703

12 12 IFC’s expert teams work closely with the client Identify project Analyze and discuss with company business plan and sources and uses of funds Obtain management approval to formally consider investment In-depth business review Senior management interview and site visit Obtain approval to negotiate final transaction terms Negotiate final investment terms IFC lawyers initiate draft investment documents Final approval Sign legal documents Disbursement IFC monitors the project closely Consults periodically with project managers Field missions to enterprise Requires progress reports, annual audited statements, and other material information 2 – 4 weeks 1 – 2 weeks3 – 5 weeks4 weeksAs appropriate Supervision Board Approval Negotiation & Documentation Investment Review Meeting Appraisal Identification & Review

13 13 Up to 12 years final maturity and 2 to 3 years grace period for principal on average Security package typical: physical assets, pledge of shares, leases, etc. Market based pricing Available in fixed / floating and, depending on market conditions, local or USD currency IFC syndicates portions of loans in order to mobilize additional financing partners Commercial banks take comfort in IFC due diligence and structuring experience Over 150 commercial banks and other institutions currently participate in IFC’s B loan program Hybrid featuring characteristics of both debt and equity –Subordinated, convertible, income participation, bullet repayment and others Typically in the form of common or preferred stock Denominated in local currency Securitizations: asset-backed securities, including future revenues, receivables, etc. Guarantees: partial credit guarantees enhancing credit worthiness of client's financing Risk-sharing facilities: allowing for alternative risk allocation IFC provides technical assistance / advisory services in support of its clients Country and sector specific Funded by donor governments and other multilateral institutions CHE has full range of financing capabilities Senior Loan B Loan / Syndication Mezzanine Equity Structured Products Advisory Services

14 Health and Education Portfolio at a glance Health portfolio: Health portfolio: 54 active projects $866 mm committed Education portfolio: Education portfolio: 32 active projects $345 mm committed 14

15 15 Acibadem, Turkey Sponsor: Acibadem Healthcare Group, a leading private healthcare provider in Istanbul, Turkey. The Group owned and operated 2 full service hospitals, 3 outpatient clinics, 1 ophthalmology clinic and 1 central laboratory Project: Project 1: Construction of an 80-bed oncology / neurosurgery hospital in Istanbul and a 200-bed general hospital in Bursa. Project 2: Expansion of networks in Istanbul, Izmir and Ankara. Project Cost: Project 1: US$62 million, Project 2: US$113 million IFC Support: IFC provided US$60 million long-term debt Result Acibadem was able to undertake a significant expansion in healthcare provision (by 378 beds) and, at the same time, demonstrate the credibility of the private health sector in Turkey Acibadem was successful in becoming the 3 rd hospital in Turkey to receive JCI accreditation

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