Jeddah based Islamic Development Bank (IsDB) has announced it has recently approved its debut financing for PPP Hospital Sector in Turkey with the financing of the Konya PPP Hospital.

With €67.5 million ticket size, this is the first of a series of projects IsDB is considering for Turkey. Dr. Walid Abdelwahab, Director of Infrastructure Department of IsDB, which operates in 56 member countries in Asia, Africa and the Middle East, said:

"This is a landmark transaction in many ways. This transaction creates precedence of long-term Islamic project finance for Turkey. Islamic finance offers a complementary financing source along with conventional modes of finance and we hope that with this successful transaction, Turkey will be able to tap in the vast pool of global Islamic finance”.

Other lenders to this project are EBRD, Black Sea Trade and Development Bank (BSTDB), Unicredit Bank and Siemens Bank.

As part of a comprehensive long-term financial package, the EBRD arranged a €147.5 million syndicated loan under its A/B loan structure, with €67.5 million for the Bank’s own account and €80 million syndicated to UniCredit Bank Austria AG and Siemens Financial Services. The Black Sea Trade and Development Bank is providing a parallel financing of €50 million.

The total investment for the project is around €320 million.

An important element of Turkey’s healthcare vision is to establish universal healthcare system for its citizens. Mr. Saleh Jelassi, Head of IsDB Country Gateway Office in Turkey, said:

“We are happy to be part of Government’s Health Transformation Program (HTP), which aims at modernizing Turkey’s existing hospital infrastructure to bring it up to international standards.”

Sponsored by YDA Insaat, Konya Hospital will have total capacity of 838 beds consisting of a General Hospital with 420 beds and a Maternity & Child Hospital with 418 beds. YDA was awarded with four PPP hospitals (Kayseri, Konya, Manisa and Sanliurfa) – total of 4,679 hospital beds.

YDA Insaat was established in 1975 and has been operating in local and international markets developing different types of projects. Mr. Fida Rana, the task manager for this transaction highlights some unique features of this of this transaction, “we were able to offer a Shariah complaint alternate that matches the hedging requirement typical for this kind of projects. IsDB offered a hedge neutral fixed price for this financing for the entire loan-life.”