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Innovative Application of MIGA Guarantees Attracts Long-Term Investors to Elazig Hospital PPP in Turkey

​Innovative Application of MIGA Guarantees Attracts Long-Term Investors to Elazig Hospital PPP in Turkey

MIGA and EBRD collaborate to offer first liquidity-backed political risk insurance for greenfield project bond developed with infrastructure investment firm Meridiam

WASHINGTON DC, Dec 7, 2016—A political risk guarantee by the Multilateral Investment Guarantee Agency (MIGA) in support of a €288 million bond has attracted a new group of investors to finance the construction and operation of a new hospital in the Turkish city of Elazig, in Eastern Anatolia. The 20-year MIGA guarantee, along with a liquidity facility provided by the European Bank for Reconstruction and Development (EBRD), has led Moody's to assign an investment grade rating of Baa2 to the bond, surpassing Turkey's sovereign rating.

This is also the first time an infrastructure bond is being used to finance a greenfield hospital public-private partnership (PPP) project in Turkey, and support from MIGA and EBRD was critical to attracting long-term investors.

IFC, a member of the World Bank Group, is also expected to participate as an anchor investor in an unrated tranche.

"Our political risk coverage for this bond, with the rating from Moody's, brought in capital market participants to finance this infrastructure PPP project," said MIGA Executive Vice President and CEO Keiko Honda. "We are happy to have expanded the pool of investors, while also making a real impact on health outcomes in Turkey."

The bond is being issued by a joint venture between the infrastructure investment firm Meridiam, and Rönesans Holding, a leading Turkish construction company. The proceeds of the bond, which has been certified as a "green and social bond" by Vigeo EIRIS, will facilitate design, building, financing, equipping, and maintenance of the Elazig hospital campus by the Turkish Ministry of Health. In accordance with the PPP model, the Ministry of Health will deliver medical services.

The ELZ Saglik Yatirim Project is owned by a consortium of Meridiam, Rönesans, and the Turkish companies Sila Group and S.A.M. Yapi Sanayi ve Ticaret Ltd. MIGA is also providing a guarantee to Meridiam's equity investment in the project.

The integrated Elazig hospital campus will include a general hospital and a women and children's hospital, and also offer psychiatric services and dental care. The hospital will replace existing hospitals in Elazig that currently serve 1.6 million people, leading to increased efficiency of healthcare services.

The Elazig hospital is part of the 'Health Public-Private Partnership' program developed by the Turkish Ministry of Health, and is the third such project MIGA has supported. In the face of an expected rise in demand for healthcare services over the next two decades, the Ministry has developed an ambitious €15-20 billion Health PPP program to build around 30 integrated health campuses around the country. This is a signature program for the Government of Turkey and its success could serve as a model that demonstrates the potential of large-scale PPP programs for other sectors in Turkey, as well as other countries in the region.


MIGA was created in 1988 as a member of the World Bank Group to promote foreign direct investment into emerging economies to support economic growth, reduce poverty, and improve people's lives. MIGA fulfills this mandate by offering political risk insurance and credit enhancement to investors and lenders.


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