Turkey Group Partners With GE for $1.1 Billion Hospital Building

Turkerler Group, a Turkish group with interests in construction and energy, said its plan to build two hospitals with partners General Electric Co. and local builder Gama Holding AS will cost about 1 billion euros ($1.1 billion).

Work on the hospitals will start this year as the Ankara-based group seeks to arrange about 800 million euros of financing needed for the projects, Chairman Kazim Turker said Thursday in an interview.

GE will hold stakes of as much as 10 percent stake in each of the hospitals, proposed for the towns of Izmir and Izmit, Turker said in Istanbul, with the rest split between Turkerler and Gama. The European Bank for Reconstruction and Development, or EBRD, has also expressed interest in the ventures, he said.

The Turkish government is building 17 hospitals for as much as $10 billion under the public-private-partnership model, known as PPP, to double the number of beds in the country to 95,000 by 2018. Demand for hospital beds has increased since the government reformed health services in the mid-2000s to include all citizens under general healthcare coverage.

Under the PPP system, private builders undertake the construction and supply of non-medical equipment, services and staff. The health ministry pays them an annual fee for an operational life of 25 years, providing medical staff and assuming loan guarantees.

Turkerler and partner Astaldi SpA signed an 18-year, 876 million-euro loan Thursday to build a 1.15 billion-euro hospital in Ankara in partnership with the health ministry under the PPP model. The loan was provided by 12 banks including EBRD, Deutsche Bank AG and International Finance Corp.

Turkerler group also plans to increase generating capacity in its power-production business, Turker said. Geothermal capacity may rise to 400 megawatts from 24 megawatts in five years, with hydropower expanding to 125 megawatts from 86 megawatts and wind power to 300 megawatts from 30 megawatts, he said.

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