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Guidelines

Preparing Health Care Investment Proposals


There is no standard application form for IFC financing. A company or entrepreneur seeking to establish a new venture or expand an existing enterprise in a member developing country can approach IFC directly. This can be done by reading the IFC investment guidelines, requesting a meeting and submitting preliminary project or corporate information to the appropriate IFC department or the closest IFC mission or field office. A convenient source of information is the IFC website: www.ifc.org.
After these initial contacts and a preliminary review, IFC will request a detailed feasibility study or business plan to determine whether to appraise the project. As a rule, the enterprises which IFC finances must be majority private sector owned and controlled. Like other private sector investors and commercial lenders, IFC seeks profitable returns, prices its finance and services in line with the market and shares project risks with its partners. Even though IFC does not take any government guarantees for its financing, IFC's work often requires close cooperation with government agencies in developing countries.

Health Care Investment Proposals
Information on a health project for consideration by IFC should include the categories listed on the back of this page. These are organized primarily for financing investments and managing risks of hospitals, clinics, diagnostic centers or laboratories, the most common area of investment thus far for IFC in this sector. Therefore, they will have to be adapted in varying degrees for use in other types of healthcare projects, such as health insurance schemes, telemedicine companies, on-line health care services (e-business), equipment leasing, etc. Privately organized, yet "not-for-profit" health institutions will need to demonstrate a capacity to operate in a business-like manner and to maintain regular "surpluses" to qualify for support on IFC's market-based terms.

1. Executive Summary
2. National and Local Health Sector. Can the market absorb the services to be provided by the Project?

    • Regulatory framework
    • Analysis of the sector
    • Demand: market segments, size, growth and projections
    • Supply: key players, competitors, market positions, differentials, prices, quality of services
    • Potential changes in the sector (regulation, competition etc.)
    • Potential changes in the market (growing unemployment, demographic profile etc.)
3. The Institution and its Management. Who owns, controls, and runs the Institution?
    • History
    • Shareholders
    • Organizational chart
    • Management team
    • Present legal structure
    • Licenses, permits, accreditation and trade registrations
    • The institution's property rights e.g., leasehold, freehold, sale and lease back, squatter's rights
    • Current operations (beds, services offered etc.) and operational performance
4. Financial Performance. What is the Institution's financial history?
    • Revenues, main product groups
    • Variable cost structure, main elements
    • Fixed cost structure, main elements
    • Capital structure and cost
    • Audited financial statements past three years in US dollars
    • Foreign exchange risk/exposure
5. Strategic Plan. Where does the Institution want to be in ten years and how does it plan to get there?
    • New strategy and goals (target markets, customers, cost reduction programs, repositioning...)
    • Institutional strengths
    • Institutional weaknesses
6. The Project. How will the Project help contribute to the goals outlined in the Strategic Plan?
    • Description and goals of the project by main components
    • Strategic fit of the project
    • Size and type of IFC support required
    • Timetable for project implementation
7. Project Cost, Financing, and Return. What is the Project's expected financial performance, and impact on the Institution?
    • Ten-year financial projections, profit and loss statement, balance sheet, cash flow statement
    • Internal rate of return
    • Estimate of total project cost, broken down into land, construction, installed equipment, and working capital, indicating foreign exchange component
    • Proposed financial structure of venture, indicating expected sources and terms of equity and debt financing
8. Risks and Issues. Are there any other issues that can affect the Institution or the Project?
    • Non-profit or cooperative status
    • Opportunities and threats
    • Project strengths and weaknesses
For inquiries and more information on IFC's Health Care investments, please contact:

Emmett Moriarty
Senior Health Specialist
Phone: (202) 473-9051
E-mail: emoriarty@ifc.org

Ioan Cleaton-Jones
Health Specialist
Phone: (202) 458-9881
E-mail: icleatonjones@ifc.org

Web site: www.ifc.org/che