CAIRO: In a bid to expand private healthcare in Egypt, the International Finance Corporation (IFC) ¬- the private sector arm of the World Bank Group – signed Wednesday a cooperation agreement with Saudi Arabia’s Andalusia Group to provide a $15 million loan as well as another $10 million in equity.
The agreement seeks to address the need for high-quality medical services in Egypt and bring clinical and patient care to underdeveloped countries across the region.
“This project marks a key step in our strategy to expand beyond Saudi Arabia to other countries in the region that have the greatest need for quality healthcare and to implement global best practices, said Hazem Zagzoug, CEO of Andalusia Group. “Our partnership with IFC came after a thorough due diligence process that reflects our strengths and sound values.
Established in 1984 with one hospital, the Andalusia Group today operates a network of three hospitals and two specialized clinics in Saudi Arabia and Egypt. The group first entered the Egyptian market in 1989 with the inauguration of Al-Salama hospital in Alexandria. Later in 2004, the group established another medical institution in Alexandria that holds the biggest emergency unit in the region and the biggest Intensive Care Unit (ICU) with 28 beds and eight operation rooms.
The $25 million agreement is part of Andalusia’s aggregate $48 million project, which involves expanding the 80-bed Al-Salama hospital in Alexandria to 120 beds and establishing the new 100-bed Andalusia-Heliopolis Hospital in Cairo.
In addition, the project will establish a new nursing school in Cairo, with the capacity to train 350 nurses a year. This will help address the severe shortage of trained nurses in the country.
The new hospitals are expected to treat an additional 200,000 patients a year and create 1,000 new jobs for medical professionals.
“IFC is very pleased to support the Andalusia Group in a project that will help expand access to healthcare in Egypt, relieve the growing burden on the public health system, and increase employment opportunities for local professionals, stated Michael Essex, IFC director for the Middle East and North Africa.
IFC’s loan to the group is a long-term one, payable over 12 years. “We, at IFC, aim at giving loans with longer maturity, explained Guy Ellena, IFC director for health and education. “To build a hospital [in particular], it takes time, and you need longer-term loans than other projects. And that is how our loan is different than a [regular] bank’s loan.
He added that IFC’s investment in the group reflected its confidence in Andalusia’s business plan, services, and management.
“We believe Andalusia has the right quality. We have seen quality of their services and equipment, Ellena pointed out. “For us, quality of doctors is very important, but quality of management is [equally] important because it creates the setting for these doctors and nurses to work efficiently.
The new agreement with the Andalusia Group marks IFC’s fourth investment in the healthcare sector across the MENA region. In fiscal year 2007, IFC’s investments in the entire region reached $1.2 billion.
Addressing gaps in the region’s markets – specifically in postwar zones – IFC has increased its regional presence to improve business environment, facilitate access to finance, and encourage private sector involvement in infrastructure. IFC’s strategy also supports the cross-border emergence of “regional champions who invest in less developed countries across the region.
Egypt, in particular, has enjoyed a good share of IFC investments across both financial and non-financial sectors such as banking, retail, agribusiness, oil and gas, mining, manufacturing, and healthcare.
IFC has spurred its support to Egyptian companies, allocating this year alone $300 million to 11 companies, a 3.5 time increase over last year’s support. Among these companies are the Egyptian Mortgage Refinance Company, Indo-Egyptian Fertilizer Company, Dar El-Fouad Hospital and Omar Effendi.
