Hygeia Expansion

Summary of Proposed Investment

This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only.

Project number	25324
Company name	Hygeia Nigeria Limited
Country	Nigeria
Sector	Health Care
Environmental category	B
Department	Health and Education
Status	Active

Date SPI disclosed	October 18, 2006
Projected board date	November 17, 2006
Previous Events	Invested: July 26, 2007 Signed: January 30, 2007 Approved: January 25, 2007

View Environmental & Social Review Summary (ESRS), click here

Overview

Sponsor/Cost/Location

Development Impact

Contacts

Attachments

Project description

This proposed project involves an expansion of a number of operations of Hygeia Limited (the company). Hygeia is a private sector provider of hospital and health maintenance organization (HMO) services in Nigeria. The key elements of the proposed project include:

- the upgrade, renovation and expansion of three Hygeia hospitals: Lagoon Apapa, Lagoon IV and Lagoon Ikeja.
- the establishment of five regional offices and the expansion of information technology infrastructure in relation to its HMO business;
- partial refinancing of an existing loan used to purchase MRI, CT Scan, and other critical care equipment in 2004/5; and
- funding of working capital to facilitate the company’s expansion program.

Anticipated development impact of the project

Supporting Hygeia for the expansion of its HMO and hospital business is expected to have significant development impact. First, it would raise the overall quality and accessibility of private medical services in Nigeria. Second, IFC’s support, particularly of Hygeia’s HMO business, is likely to improve the perception of Nigeria’s nascent health insurance program – boosting the credibility of this very important sector. Furthermore, this loan is expected to be IFC’s first naira-denominated loan. IFC’s involvement in the currency swap markets in Nigeria will assist in developing this aspect of the financial markets in that country. Finally, this investment in Hygeia’s expansion will bring additional employment and tax revenue to Nigeria.

IFC's expected development contribution

IFC’s support of Hygeia will assist in the development of a strong and viable private healthcare sector in Nigeria. IFC’s investment in Hygeia will also signal confidence in the company to other potential investors. This should assist Hygeia in further developing its equity base and in securing the necessary finance to fund its future expansion. Finally, as discussed above, the naira-denominated loan proposed for this investment will be IFC’s first local currency loan in Nigeria. IFC’s involvement in the currency swap markets in Nigeria will assist in developing this aspect of the financial markets in that country. IFC’s loan will also be of a longer tenor than is otherwise available for healthcare companies in Nigeria.

Environmental and social issues - Category B

This is a category B project according to IFC's environmental and social review procedure. A summary of IFC’s environmental review findings for the project including the rationale for the B categorization is publicly available in the Environmental and Social Review Summary (ESRS) available on the IFC's website. The Environmental Action Plan (EAP), which is a companion document to the ESRS, contains specific tasks that the client will undertake to mitigate perceived risks and impacts from the project, and to ensure compliance with IFC’s performance standards.

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