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GE Invests in GAMA-TURKERLER JV to Develop Two Major Healthcare PPPs in Turkey; OPIC, EBRD and EDC to Provide Financing for Transformational Hospital Project

Thursday, October 20, 2016

(OPIC)  The comprehensive long-term financial package which brought together six international financiers was signed today at Presidential Complex in Ankara in the presence of Turkish President Recep Tayyip Erdogan.

Overseas Private Investment Corporation (OPIC), the U.S. Government’s development finance institution, European Bank for Reconstruction and Development (EBRD) and Export Development Canada (EDC) to provide ~$668 million in financing for the development of the Izmir Bayrakli integrated health campus project (subject to FX);

GE joins GAMA Holding A.S. and Türkerler Insaat A.S Joint Venture Company as minority stakeholder in the IzmirBayrakli and Kocaeli Healthcare Public Private Partnership (PPP) projects, together valued at ~$1.3 billion (subject to FX);

GE Healthcare awarded ~$128 million long-term contract for comprehensive technology and biomedical equipment maintenance services for the two health campuses that will add 3,240 new hospital beds to Turkey’s public health system.

ANKARA, Turkey & LONDON In line with Turkey’s strategic healthcare transformation program, GE Healthcare, GAMA Holding A.S. and Türkerler Insaat A.S., today reached a definitive agreement for the development of two strategic Ministry of Health (MoH) PPPs; the Izmir & 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 Erdogan, President of the Republic of Turkey and Prof. Dr. Recep Akdag, 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 Akdag.

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.S. 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.”

Kazim Türker, CEO of Türkerler Insaat A.S. 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 Izmir 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.”