Konya Integrated Healthcare Campus (Turkey)

In 2016, the Bank continued to support the EUR 12 billion programme of the Turkish Government, aimed at developing about 60 hospitals across the country in collaboration with private partners. By tapping the private sector resources and know-how via public-private partnerships (PPP), the Government aims to address the need for substantial investments to develop country’s healthcare infrastructure and to achieve higher efficiency in managing this infrastructure.

A EUR 50 million project finance loan was provided by the BSTDB to ATM Saglik Konya Yatirim ve Işletme A.S. (ATM Health Konya Investments and Management), a private company established to design, construct, equip, supply and maintain an integrated health campus in Konya, the seventh largest city in Türkiye. The project is implemented through a public-private partnership (PPP) involving a 28 years concession awarded by Türkiye’s Ministry of Health. The private developer shall act as facilities manager providing buildings maintenance and non-clinical services, whilst the Ministry of Health will remain responsible to provide healthcare services to the public. Konya Healthcare Campus is due to become operational in 2019, when it will have a total capacity of 838 beds. Total project cost is estimated at about EUR 374 million.

The project is expected to have economic benefits for Konya and its surrounding region, as well as for the Turkish economy overall, during both the construction and the operational phase. Such benefits include: new employment creation, upstream linkages with suppliers, favorable multiplier effects in the region and, most importantly, improved and expanded capacity to provide healthcare services to the public.

Konya Healthcare Campus project will increase the capacity to provide healthcare services in Konya and shall lead to better quality services, as it will be a modern, state-of-the-art facility. The healthcare sector in Türkiye is rapidly developing due to the growing population. Konya Healthcare Campus is expected to relieve the bottlenecks and overburdening of the current healthcare infrastructure.
The operation has a significant potential to provide positive demonstration effects. First, the project involves the construction and operation of a modern integrated healthcare campus, a model which is fairly new for Türkiye and the Black Sea region. Second, it involves a public-private partnership and therefore it is an interesting ‘case study’ that could serve as a model for other PPP initiatives in the healthcare sector in Türkiye, as well as other countries.

Another positive element is that the large size of the project required a high degree of external resources mobilization: several International Financial Institutions (IFIs) (BSTDB, EBRD and the Islamic Development Bank) and commercial banks (UniCredit and Siemens Bank) cooperated to complete the financial package for the project. 
Konya Healthcare Campus is the second PPP project financed by the Bank in the rapidly developing healthcare sector in Türkiye, the first such project being Ankara Etlik Integrated Heath Campus co-financed by the BSTDB with EUR 60 million in 2015. The IFIs participation in the Turkish Government’s programme for developing country’s healthcare system is expected to ease the risk perception of the commercial lenders and hence to assist in attracting the substantial funding required for this pioneering programme of the Turkish authorities.

Total Project Cost: About EUR 265 million
BSTDB financing: EUR 50 million
Maturity: 18 years
Type of financing: Project finance loan