ANNOUNCEMENT 21 Jul 2017
On 20 July 2017, the Japan Bank for International Cooperation (JBIC) signed an overseas investment loan agreement in project financing with Turkish Istanbul PPP Saglik Yatirim A.S.
NUMBER OF INTERVENTIONS
The Japan Bank for International Cooperation, press release of 21 July 2017, Project Finance and Political Risk Guarantee for Ikitelli Hospital PPP Project in the Republic of Turkey: http://www.jbic.go.jp/en/information/press/press-2017/0721-56475
JBIC information on overseas investment loans: http://www.jbic.go.jp/en/finance/investment
The overseas investment loan agreement between JBIC and Turkish Istanbul PPP Saglik Yatirim A.S. has a maximum value of JPY 81.3 billion (USD 728 million). Japanese Sojitz Corporation and Turkish Ronesans Holding A.S. have stakes in Istanbul PPP Saglik Yatirim A.S. Additionally, the loan is co-financed by a number of private financial institutions with an approximate value of JPY 163 billion (USD 1.46 billion). The governmental agency Nippon Export and Investment Insurance will provide a political risk guarantee for the co-financed portion.
The loan finances Ikitelli Hospital PPP Project. In this project, Turkish Istanbul PPP Saglik Yatirim A.S. will build the Ikitelli IHC hospital. The Japanese company will participate in this project as an investor as well as "manage the operations and administration under a 25-year contract while supporting the large hospital PPP strategy of Turkey which plans to introduce the operational and administrative know-how of Japanese hospitals".
In this context, the bank stated: "This loan and guarantee are in line with the policy of the Japanese Government. As Japan's policy-based financial institution, JBIC will continue to contribute to the expansion of the overseas business deployment of Japanese companies and financially support the maintenance and enhancement of the international competitiveness of Japanese industries by drawing on its various financial facilities and schemes for structuring projects, and performing its risk-assuming function."
Overseas investment loans
JBIC provides direct loans named overseas investment loans to Japanese companies, overseas affiliates or joint ventures where Japanese companies hold equity interests and governments or financial institutions partying with such overseas affiliates. Loans support projects in specific sectors or with a specific purpose of interest to Japan. Further information can be found on the Bank’s website under overseas investment loans.
Project financing loans include preferential terms such as repayments being solely made from the project’s cash-flow generation and secured on the basis of the project's assets alone. As such the loan agreement is tied to the project's finances and not the company in question.
The GTA includes state guarantees and other financial incentives that are likely to affect the restructuring and performance of firms facing international competition, whether from imports, in export markets and from foreign subsidiaries.