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CEE & Turkey

CASE STUDY: YDA Structures First Dual Islamic and Conventional PPP in Turkey for Konya Hospital

YDA managed to attract significant participation from international lenders on the first ever dual conventional and Islamic healthcare PPP in Turkey, a €265mn facility to help finance the construction of the Konya Hospital.

Feb 15, 2017 // 4:53PM

Background

The key objectives for YDA in financing the Konya Hospital were to secure a well-structured financing package that was well suited for both the construction period and concession period.

The Konya Hospital PPP was an important milestone for YDA and the wider Turkish capital markets as it was the first project of its kind to include a dual Islamic and conventional tranche. Including an Islamic tranche in the transaction will help pave the way for other stakeholders engaged in PPPs to tap into new pockets of liquidity.

Transaction Breakdown

The €354mn financing package consisted of €265mn in debt and €89mn in equity with an all-in tenor of 18 years, one of the longest tenors achieved in PPP and BOT –type projects in Turkey.

On the debt side of the transaction, the significant non-recourse, ring-fenced loan facility together with its innovative hybrid (conventional tranche and Islamic tranche) financing structure were some of the notable achievements on this deal. The financing cost competitive compared to peer projects financed with project finance credits in Turkish PPP healthcare sector.

The deal attracted participation from notable international lenders as well as Islamic development banks and local institutions. As part of a comprehensive long-term financial package, the EBRD has arranged a €147.5mn syndicated loan under its A/B loan structure, with €67.5 million for the Bank’s own account and €80mn syndicated to UniCredit Bank Austria AG and Siemens Financial Services. The Black Sea Trade and Development Bank and the Islamic Development Bank are providing parallel financing of €50mn and €67.5mn, respectively.

This is the first combination of Islamic tranche and conventional tranche under the same documentation for the financing of a PPP Healthcare Project in Turkey.

This is also the first project finance transaction by the Islamic Development Bank in Turkey and the first healthcare PPP project it has ever financed. 

CEE & Turkey Projects & Infrastructure Deals CEEMEA Middle East

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