Bucharest, Romania/Washington D.C., October 16, 2006—
The International Finance Corporation, the private sector arm of the World Bank Group, will finance MedLife S.A., the first private hospital chain in Romania. IFC’s financing—which will stimulate the growth of the country’s private health care sector and support delivery of better health care services to the country’s interior—comprises a EUR 5 million loan and an equity investment of $5 million equivalent in Romanian currency.
Headquartered in Bucharest, MedLife is a successful private health care provider owned by a family of physicians and bankers. The company offers a wide range of services through its 11 clinics in Bucharest and Ploiesti. It also operates three medical laboratories in Bucharest as well as Hyperclinica, one of the largest private medical facilities in Romania.
MedLife is building a 100-bed hospital adjacent to Hyperclinica that is expected to open in December 2006. IFC’s support will allow the company to expand its high-quality health care services to areas outside Bucharest. It will partially finance the development of new hospital and clinic combinations with 40 to 50 beds (similar to those in Bucharest), which will open in Constanta, Timisoara, Brasov, Iasi, and Cluj over the next two to three years.
Shahbaz Mavaddat, IFC Director for Southern Europe and Central Asia, said, “Providing support for the development of infrastructure, including social infrastructure, is one of IFC’s key priorities. Health care facilities are typically capital-intensive and have a long gestation period. By providing long-term loans, IFC is playing an important role in the development of this sector. Successful execution of the MedLife project will encourage other investors—both Romanian and foreign—to participate in modernizing the country’s health care industry.”
Guy Ellena, IFC Director for Health and Education, noted, “One of the main reasons that IFC works in the social sectors, such as health care, is to help relieve the burden on the country’s public health system and stimulate private health insurance. We are very happy, therefore, to partner with MedLife to deliver these services. MedLife combines the vision and characteristics we associate with success. We also hope that IFC’s considerable global experience in hospitals around the world will be of value to MedLife and its sponsors.”
Mihail Marcu, General Manager of MedLife, added, “MedLife’s Memorial Hospital, which will soon open, is the first step in our strategy to expand into regions beyond Bucharest, especially areas where there has long been a great need for high-quality private health care. We see IFC as an important partner in helping us achieve our strategic vision. This partnership recognizes our efforts to establish benchmarks of medical excellence and outstanding quality of service. IFC’s financing will help us bridge the gap in the delivery of medical services and realize our vision of emerging as one of Romania’s leading health care providers.”
Memorial Hospital is expected to become a source of best practices for Romania’s medical community through professional management and training.
In 2005, IFC’s Advisory Services Department advised MedLife on the design and business strategy for the new hospital.
IFC in Romania
IFC’s strategy for Romania focuses on supporting local companies’ efforts to become more competitive in the domestic market and expand into other countries in the region, especially by improving corporate governance, environmental standards, and best practices. IFC has advised the government on restructuring the health sector, including through public-private partnerships. As of June 2006, IFC’s committed portfolio in Romania was $500 million, and the outstanding portfolio was $489 million. IFC’s portfolio is spread over financial markets (78 percent), projects with DistrigazSud (13 percent) and Petrotel Lukoil (7 percent), and general manufacturing (1 percent).
About IFC
The International Finance Corporation, the private sector arm of the World Bank Group, is the largest multilateral provider of financing for private enterprise in developing countries. IFC finances private sector investments, mobilizes capital in international financial markets, facilitates trade, helps clients improve social and environmental sustainability, and provides technical assistance and advice to businesses and governments. From its founding in 1956 through FY06, IFC has committed more than $56 billion of its own funds for private sector investments in the developing world and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. With the support of funding from donors, it has also provided more than $1 billion in technical assistance and advisory services. For more information, visit
www.ifc.org
.
