GE Invests in GAMA-TÜRKERLER JV to Develop Two Major Healthcare PPPs in Turkey; OPIC, EBRD and EDC to Provide Financing for Transformational Hospital Project
October 20, 2016
ANKARA, Turkey & LONDON In line with Turkey’s strategic healthcare transformation program, GE Healthcare, GAMA Holding A.Ş. and Türkerler İnşaat A.Ş., today reached a definitive agreement for the development of two strategic Ministry of Health (MoH) PPPs; the İzmir & Kocaeli Integrated Healthcare Campus Projects.
The partners also announced a commitment by OPIC, EBRD and EDC that together will serve as lenders providing financing of $668 million for the development of the Izmir Bayrakli health campus project, subject to terms and conditions and financial close. The partners are also expected to confirm financing arrangements for the Kocaeli health campus project (subject to the required approvals) by the end of 2016.
The deal - that sees GE become a minority investor in the PPPs and awarded a ~$128 million multi-vendor equipment and maintenance contract – is part of the Turkish Ministry of Health’s $10 billion plan to deliver twenty-nine PPPs and 41,000 new hospital beds.
The definitive agreement was signed in Ankara in the presence of His Excellency, Recep Tayyip Erdoğan, President of the Republic of Turkey and Prof. Dr. Recep Akdağ, Minister of Health of the Republic of Turkey.
“Together with our private partners, Turkey is delivering one of the world’s largest healthcare modernizations in public healthcare, and indeed the biggest in Turkish history. This has been a significant undertaking, enabled by policy and regulatory reforms to attract foreign investment and an appetite to leverage both local and foreign private sector innovation, capabilities and financing to propel the Turkish health system into the future,” said Prof. Dr. Recep Akdağ.
He added: “As of 2016, the Ministry has already awarded twenty-one projects, with eight of these projects achieving financial close with construction underway. We anticipate the Kocaeli and Izmir Bayrakli PPPs to begin services by 2020, bringing a range of world-leading medical technologies and services for the 5.8 million people in these two cities.”
As part of the Government’s patient-focused ‘Smart Hospitals’ initiative aimed at introducing well designed modern facilities to improve the quality of healthcare in the region, both health campuses will offer a general hospital, oncology hospital, women’s and children’s hospital, cardiovascular diseases centre and physical therapy and rehabilitation units.
Hakan Özman, Deputy Chairman and CEO of GAMA Holding A.Ş. said: “Today’s signing is a major milestone in our long-term commitment to the Kocaeli and Izmir Bayrakli projects. GE brings a strong track-record of healthcare PPPs around the world and their long-term participation as an equity investor and technology provider will be essential in realizing the Ministry of Health’s vision on these projects. With critical funding and project partners now in place the Consortium will look to accelerate the construction and delivery of these projects.”
Kazım Türker, CEO of Türkerler İnşaat A.Ş. said: “In support of the Government’s Hedef 2023 healthcare development plan, the Consortium is on a clear path to deliver its commitment to the Ministry of Health on the Kocaeli and Izmir Bayrakli projects. The commitment of our foreign partners underscores long-term confidence in Turkey’s PPP strategy and in Turkey’s development goals.”
“OPIC is proud to provide financing that will contribute to the construction and management of new hospital campuses in Turkey,” stated OPIC President and CEO, Elizabeth L. Littlefield. “This Izmir transaction will significantly improve the well-being of Turkish residents by increasing their access to high-quality healthcare services.”
Jean-Patrick Marquet, Director for EBRD operations in Turkey, said: “Arranging this comprehensive long-term financial package for a new Izmir hospital is part of the EBRD’s efforts to catalyse private sector involvement in critical infrastructure in Turkey which brings money and know how, and ultimately benefit people's ýlives across the country.”
“EDC is very pleased to have participated in arranging financing for this important PPP hospital project in Turkey while providing support to our global strategic client, GE,” added Sven List, EDC Vice-President, Structured and Project Finance.
As the key technology and solutions partner for the 25-year projects, GE will deliver a comprehensive 4-pillar technology and solutions package that will boost healthcare sector efficiencies, knowledge and technology sharing and is expected to add approximately 15% to GE Healthcare’s workforce in Turkey. The deal, one of the largest to date in Turkish healthcare and subject to MoH approval, will include:
1. More than 2,000 units of high technology Imaging and Life Care Solutions equipment enabling the early detection and proper treatment of disease, including Magnetic Resonance (MR), Computed Tomography (CT), PET-CT (Positron Emission Tomography), Angiography, Radiography and Nuclear Medicine, as well as clinical systems including anasthesia, ventilators, monitors, cardiology monitoring equipment, ultrasound systems and incubators for newborns;
2. Procurement consultancy of non-GE healthcare medical equipment to ensure the level of technology and completion of the entire project portfolio;
3. Procurement of non-Healthcare GE products such as lighting, co-generation and electrification units, to ensure the complete installation of the projects;
4. A 10-year biomedical services contract supported by a dedicated and local technical team that will provide long-term maintenance, fix, calibrations and the integration of non-GE equipment.
John Flannery, President & CEO for GE Healthcare said: “At GE Healthcare we believe that real healthcare transformation comes from a willingness to embrace innovation. To that end, the İzmir and Kocaeli Integrated Healthcare Campus Projects are among the largest and most complex PPP projects globally that GE Healthcare has invested in to date and demonstrates our commitment to developing new business models and risk-sharing to drive sustainable healthcare development.”
About GAMA Holding A.S.:
GAMA, founded in 1959, builds power plants, refineries, cement, petro-chemical and gas plants, factories, high-rise buildings, water treatment plants and transmission lines, bridges, and other infrastructural projects along with funding various energy investments. GAMA is a leading international contractor who have successfully completed 400 projects in 25 countries extending from Ireland in the west to Russia’s Sakhalin Island in the east. GAMA Holding Companies currently undertake projects valued 4.5 billion USD in 10 countries. Besides serving as an EPC company and contractor, GAMA also invests in energy and health projects. For more information, please visit www.GAMA.com.tr.
GE (NYSE: GE) is the world’s Digital Industrial Company, transforming industry with software-defined machines and solutions that are connected, responsive and predictive. GE is organized around a global exchange of knowledge, the "GE Store," through which each business shares and accesses the same technology, markets, structure and intellect. Each invention further fuels innovation and application across our industrial sectors. With people, services, technology and scale, GE delivers better outcomes for customers by speaking the language of industry. www.ge.com
About GE Healthcare:
GE Healthcare provides transformational medical technologies and services to meet the demand for increased access, enhanced quality and more affordable healthcare around the world. GE works on things that matter - great people and technologies taking on tough challenges. From medical imaging, software & IT, patient monitoring and diagnostics to drug discovery, biopharmaceutical manufacturing technologies and performance improvement solutions, GE Healthcare helps medical professionals deliver great healthcare to their patients.
OPIC is the U.S. Government’s development finance institution. It mobilizes private capital to help address critical development challenges and in doing so, advances U.S. foreign policy and national security priorities. Because OPIC works with the U.S. private sector, it helps U.S. businesses gain footholds in emerging markets, catalyzing revenues, jobs and growth opportunities both at home and abroad. OPIC achieves its mission by providing investors with financing, political risk insurance, and support for private equity investment funds, when commercial funding cannot be obtained elsewhere. Established as an agency of the U.S. Government in 1971, OPIC operates on a self-sustaining basis at no net cost to American taxpayers. All OPIC projects adhere to high environmental and social standards and respect human rights, including worker's rights. By mandating high standards, OPIC aims to raise the industry and regional standards of the countries where it funds projects. OPIC services are available for new and expanding business enterprises in more than 160 countries worldwide. For more information, visit website: www.opic.gov
The EBRD is a multilateral bank committed to the development of market-oriented economies and the promotion of private and entrepreneurial initiative in more than 30 countries from Morocco to Mongolia and from Estonia to Egypt. The Bank is owned by 65 countries, the EU and the EIB. The EBRD’s strategic plan for the countries where it invests for the period 2016-18 has three priorities: strengthening economic resilience, addressing global challenges and supporting regional integration. Follow us on theweb, Facebook, LinkedIn, Instagram, Twitter and YouTube.
EDC is Canada’s export credit agency, providing financial services for companies that buy from Canadian companies, or those that have Canadian supply and services in their corporate value chains. EDC’s financing can be used for capex and/or project finance requirements, either through bilateral or syndicated corporate facilities. Operating on commercial principles, EDC has a partnership-preferred philosophy to collaborate with private-sector financial institutions to share risk and create greater capacity for Canadian trade transactions. EDC is committed to Corporate Social Responsibility, and it takes into account the environmental and social impacts of its transactions. For more information, visit www.edc.ca.