UFH 2

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	26133
Company name	Chindex International Inc.
Country	China
Sector	Health Care
Environmental category	B
Department	Health and Education
Status	Active

Date SPI disclosed	July 18, 2007
Projected board date	August 20, 2007
Previous Events	Invested: January 10, 2008 Signed: December 10, 2007 Approved: November 19, 2007

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

Overview

Sponsor/Cost/Location

Development Impact

Contacts

Attachments

Project description

United Family Hospitals and Clinics (UFH), an existing IFC client, plans to construct and operate two new hospitals targeting the local Chinese population in Guangzhou and Beijing. Each of the new hospitals will be between 100 and 150 beds, compared to 50 beds at each of UFH’s existing hospitals. Fees at these new hospitals are expected to be lower than at UFH’s existing facilities, which primarily serve the foreign expatriate population and wealthy Chinese. In addition to the two new hospitals, the project will include two satellite clinics, an upgrade of the group’s IT infrastructure, and service expansion at its existing facilities.

Anticipated development impact of the project

The project will have a strong development impact by:

- Expanding access to services meeting international standards in Beijing, Guangzhou and neighboring areas, to meet increasing demand for high quality healthcare services. Such services are not yet available to much of the population in China;
- Providing a model for the provision of private health services in China, which is still in the early stage of opening its heath sector to private practitioners and foreign investment;
- Demonstrating an exemplary approach to managing environmental, health and safety, life and fire safety and disease prevention and control issues;
- Demonstrating best administrative and patient care practices throughout the medical community,
- Fostering an environment for encouraging skilled locals to return to China; and
- Increasing charitable activities that are currently provided by the Hospital.

IFC's expected development contribution

Through its investment in UFH, IFC will act as a provider of long-term financing, which is currently difficult to obtain for private hospitals in China. In addition, IFC’s role will be critical in catalyzing the financing as IFC will assist the hospital in structuring the overall financial package and obtaining other financing sources needed for the project.

UFH believes IFC has been a valuable partner to-date, expressing that IFC’s financial and global healthcare expertise has brought added value to its growth strategy and improvement of its operation. UFH has also expressed that it benefits from the experience of IFC’s clients in other part of the World. In addition, IFC’s close supervision and enforcement of covenants has enhanced the financial discipline of the company. This new investment would further these benefits to UFH.

Environmental and social issues - Category B

While all Performance Standards (PSs) are applicable to this investment, IFC’s environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards:

- PS 1: Social and Environmental Assessment and Management Systems;
- PS 2: Labor and Working Conditions;
- PS 3: Pollution Prevention and Abatement;
- PS 4: Community Health and Safety;
- PS 5: Land Acquisition and Involuntary Resettlement; and
- IFC’s Policy on Disclosure of Information.

The following Guidelines are applicable to this project:

- IFC’s General Environmental, Health and Safety Guidelines, dated April 30, 2007; and
- IFC’s Environmental, Health and Safety Guidelines for Health Care Facilities, dated April 30, 2007; and

This ESRS assesses the project against the above Performance Standards and Guidelines. The project was not assessed against PS6 Biodiversity Conservation and Sustainable Natural Resource Management, PS7 on Indigenous People or PS8 on Cultural Heritage as the project does not involve the harvesting of natural resources or impacts on natural habitat, and it does not impact on either Indigenous Peoples or known Cultural Heritage.

The relevant guidelines have been provided to and discussed with the client on June 12th, 2007 (i.e. IFC Environmental, Health and Safety Guidelines for Healthcare Facilities and IFC Environmental, Health and Safety General Guidelines, both dated April 30, 2007).

IFC PROJECTS