Supporting Private Health Care
in Emerging Markets
January 2011
1
International Finance Corporation
at a glance
History, ownership and vision
IFC Portfolio as of June 30, 2010, by Region
• 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.
Sub-Saharan
Africa 13%
South Asia
11%
East Asia and
the Pacific 14%
Total Commitments: US$12.7 billion for own account,
US$5.4 billion mobilized
$14
$12
US$ billions
Latin America and the
Caribbean 25%
Total US$38.9 Billion
IFC Portfolio as of June 30, 2010, by Industry
Private Equity and
Health and Education
Investment Funds 5% 3%
Subnational Finance
Global ICT 4%
2%
Global Financial Markets
Agribusiness
Group 37%
6%
Syndications
$16
$10
$8
Oil, Gas, Mining, and
Chemicals 9%
$6
$4
$2
$0
2003
2004
2005
2006
2007
2008
2009
2010
*Includes loans, equity, guarantees, risk management products
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Europe and
Central Asia 25%
Middle East and
North Africa 11%
IFC Financing as of June 30, 2010
IFC's own account*
Global 1%
IFC FY10 Annual Report data
Global Manufacturing
and Services 17%
Infrastructure 16%
Total US$38.9 Billion
IFC Investment Strategy:
3 Fundamental Principles
•
Commercially viable investments
― Market based
― Must produce returns
•
Value added beyond capital
― Opportunity to help clients achieve higher standards of
management and social responsibility
•
Strong development impact
― Support projects that will expand much needed services
in a socially and environmentally responsible way
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IFC has a well established franchise in
Europe & Central Asia
Fiscal Year 2010 Commitments
Historical Commitments
US$ millions
US$ millions
IFC syndications
Syndications
US$387
IFC loans, equity, guarantees, risk mgt.
$4,000
$3,500
$3,000
$2,500
$2,000
$1,500
$1,000
$500
$0
Loans
US$ 1,807
Guarantees US$539
Equity US$624
FY03
FY04
FY05
FY06
FY07
FY08
FY09
US$ 3,357 million
FY10
Regional Portfolio
IFC Portfolio by Country (largest exposure)
US$ millions
US$ millions
Total Committed Portfolio
US$12,278
Committed portfolio for IFC’s account
US$9,691
Committed portfolio held for others
(loan and guarantee participants)
US$2,587
IFC FY10 Annual Report data
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Ukraine
US$880
Russia
US$2,286
Turkey
US$2,032
US$ 12,278 million
IFC Health and Education at a glance


Health and Education Sectors are corporate priorities and pillars of IFC’s
Strategy
FY 2010: committed $429mil in 17 projects
INVESTMENT TRACK RECORD
Health Sector:
97 private health projects in 36 countries
Education Sector:
67 private education projects in 34 countries
US$ 4.8bil of total project value
US$ 1.5bil of total project value
US$ 1.2bil of CHE total investments
US$ 505mil of CHE total investments
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Objective: Support Growth of Sustainable
Health Care Companies
To achieve this objective we
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•
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
IFC has partnered with leading
health companies
MedLife
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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
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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
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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
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Thank you
Michele Shuey
Principal Investment Officer, IFC
mshuey@ifc.org
+1 202 473 8703
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IFC’s expert teams work closely
with the client
Identification &
Review
•
•
Identify project
• Analyze and
discuss with
company
business plan
and sources
and uses of
funds
Obtain
management
approval to
formally consider
investment
2 – 4 weeks
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Investment
Review
Meeting
Appraisal
•
•
In-depth
business review
Senior
management
interview and site
visit
2 – 4 weeks
•
Obtain approval
to negotiate final
transaction terms
Negotiation
&
Documentation
•
•
1 – 2 weeks
Negotiate final
investment
terms
IFC lawyers
initiate draft
investment
documents
3 – 5 weeks
Board
Approval
•
•
•
Final approval
Sign legal
documents
Disbursement
4 weeks
Supervision
•
IFC monitors the
project closely
• Consults
periodically with
project managers
• Field missions to
enterprise
• Requires
progress reports,
annual audited
statements, and
other material
information
As appropriate
CHE has full range of financing
capabilities
Senior Loan
•
•
•
•
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
B Loan /
Syndication
•
•
•
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
Mezzanine
•
•
Typically in the form of common or preferred stock
Denominated in local currency
Structured
Products
•
•
•
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
Advisory
Services
•
•
•
IFC provides technical assistance / advisory services in support of its clients
Country and sector specific
Funded by donor governments and other multilateral institutions
Equity
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Health and Education Portfolio
at a glance
Health portfolio: 54 active projects
$866 mm committed
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Education portfolio: 32 active projects
$345 mm committed
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 3rd hospital in Turkey to
receive JCI accreditation
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