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| Metropolitano |
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| 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 | 26820 |
| Company name | Hospital Metropolitano S.A. |
| Country | Nicaragua |
| Sector | Health Care |
| Environmental category | B |
| Department | Health and Education |
| Status | Active |
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| Date SPI disclosed | May 8, 2008 |
| Projected board date | June 9, 2008 |
| Previous Events | Invested: March 31, 2009
Signed: June 27, 2008
Approved: June 25, 2008 |
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| View Environmental & Social Review Summary (ESRS), click here |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
| The proposed transaction is a $26 million expansion and refinancing project for Hospital Metropolitano S.A. (the Hospital, "Metropolitano” or the company). The Hospital offers a broad range of high quality health care services though its 45-bed existing facility in Managua, Nicaragua. After beginning operations in 2004, it rapidly established itself as a leading institution within the Nicaraguan health sector, developing a reputation for quality. |
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| Project sponsor and major shareholders of project company |
The Pellas family was the initial promoter of the hospital. Through different companies of the Pellas Group, it contributed equity and attracted the interest of other business people from Central America, who injected equity into the venture. Today the two largest shareholders of Metropolitano are several companies of the Pellas Group and Compaņia Cervecera de Nicaragua.
The Pellas Group represents one of the largest conglomerates in Central America, with presence in the banking, sugar, rum, auto retail, cable TV, health, and warehousing sectors in Nicaragua and other countries in the Central American Region. |
| Total project cost and amount and nature of IFC's investment |
| The total project cost is estimated at $26 million. The proposed IFC investment is a $10 million senior A loan for IFC’s own account and a $1 million income participation C loan. |
| Location of project and description of site |
| The hospital is located in a central location of Managua, Nicaragua. |
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| Anticipated development impact of the project |
The expansion of the Hospital’s operations in Nicaragua will have a strong developmental impact by:
- increasing access to healthcare for the population;
- providing discounted services to public sector patients;
- deepen reach to low-income segments of the population;
- acting as a center of excellence for the country and region;
- keep high-skilled staff in Nicaragua; and
- promote the development of the Nicaragua’s domestic healthcare industry. |
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| IFC's expected development contribution |
Participation in this project would allow IFC to support the expansion of high quality affordable health services in Nicaragua. Through its investment in Metropolitano, IFC will act as a provider of long-term financing, which is currently difficult to obtain for private hospitals in Nicaragua. Specifically, IFC’s additionality will be realized through:
- longer maturities: IFC’s financing will significantly extend the final maturity and average life of Metropolitano’s debt, allowing the company to better match its cash flow generation with its debt service obligations; and
- hybrid financing: the inclusion of quasi-equity financing as part of the financing package is a good fit with the company’s growth stage.
This type of financing is typically not available from commercial banks. IFC will also leverage its global experience in emerging markets healthcare to assist Metropolitano through its next stage of growth. |
| Environmental and social issues - Category B |
| This is a category B project according to IFC’s procedure for Environmental and Social Review of projects because a limited number of specific environmental and social impacts may result that can be avoided or mitigated by adhering to generally recognized performance standards, guidelines, or design criteria. IFC professional staff performed a physical evaluation of the project and environs, and reviewed relevant Company and government documentation. |
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| For inquiries about the project, contact: |
Gilberto Guzman, General Director
Masaya Highway - Km 9.75, 250 meters West
Managua, Nicaragua
Phone: +(505) 255-6900
Fax: +(505) 276-2528
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| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster |
| Local access of project documentation |
Hospital Metropolitano
Masaya Highway - Km 9.75, 250 meters West
Managua, Nicaragua |
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