The Export-Import Bank of Korea (www.koreaexim.go.kr, Chairman Lee Duk-Hoon, “Korea Eximbank”) announced on September 20 that it will provide EUR 143 million in project financing for the Gaziantep Health Campus PPP Project in Turkey in which Samsung C&T Corporation ("Samsung C&T") is participating as Sponsor and EPC Contractor.
*PF (Project Finance) : While traditional corporate loans are secured by the creditworthiness of the project sponsor, project finance loans are secured by project assets only and repaid mostly from cash flows generated by the project.
This project was planned by the Ministry of Health of the Republic of Turkey with the aim of improving its medical education, training, and service delivery through developing new, modern, and efficient public health infrastructure. The total cost of the project is estimated at EUR 600 million.
Samsung C&T, the largest shareholder of this project, formed a consortium with an Italian construction company, Salini Impregilo and a Turkish construction company, Kayi, and is participating in the project as a Sponsor.
The host city of this project, Gaziantep is the sixth largest city in Turkey with a population of about 1.6 million. Upon completion, the hospital that will be built in the project is expected to greatly improve the quality of medical service of the city with a total capacity of 1,875 beds.
Korea Eximbank will provide EUR 72 million in direct loan and EUR 71 million in guarantee which will provide coverage for Korean financial institutions including NH Bank, KEB Hana Bank and the Financial Investor.
The financing provided and covered by Korea Eximbank for this project is expected to widen opportunities for Korean financial institutions to tap into overseas businesses.
Having expressed its interest in financing since the initial stage, Korea Eximbank successfully led the deal through intensive negotiations with sponsors and fellow lenders.
Besides Korea Eximbank, K-sure, European Bank for Reconstruction and Development, and European Investment Bank are also participating in the project as lenders.
A Korea Eximbank official remarked, "This project conveys quite a significant meaning because it is the first hospital project in Turkey that Korean companies and Korean financial institutions play a leading role." He added, "Korea Eximbank's financing for this project is expected to contribute to the improvement of medical service in Turkey and act as a steppingstone to enhance economic cooperation between Korea and Turkey."
Meanwhile, since the lifting of economic sanctions against Iran, Korea Eximbank has been actively supporting hospital construction projects in Iran. With this project in Turkey as a momentum, Korea Eximbank plans to expand its support for hospital projects overseas.
