fbpx 49200-001: Healthcare Finance in Underdeveloped Regions | Asian Development Bank

China, People's Republic of: Healthcare Finance in Underdeveloped Regions

Nonsovereign (Private) Project | 49200-001 Status: Active

A senior secured loan of CNY492.195 million ($75 million) with 5 years tenor was provided to State Grid International Leasing (SGIL, formerly Yingda International Leasing) in the PRC. The proceeds were used to finance hospital facilities in counties or lower tier cities (i.e., excluding provincial capital cities) in the central and western regions of the PRC. This include direct lease of modern medical equipment as well as hospital fixed assets investments through sale and lease back transactions. According to the latest WHO data, the total health care expenditure accounted for 5.4% of the GDP in the PRC in 2012, significant lower than the global average of 9.2%. The healthcare investments are lower in the less developed central and western regions, leading to poorer facilities. There are 2.96 and 3.10 hospital beds per thousand populations in the central region and western region respectively, while the ratio was 3.17 in the eastern region.

Project Details

Project Officer
Doukidis, Doukas Private Sector Operations Department Request for information
Country
  • China, People's Republic of
Sector
  • Finance
 
Project Name Healthcare Finance in Underdeveloped Regions
Project Number 49200-001
Borrower/Company State Grid International Leasing Co. Ltd.
Country China, People's Republic of
Location Nation-wide
Type or Modality of Assistance
3290 Loan Ordinary capital resources USD 75.00 million Approved
Strategic Agendas Inclusive economic growth
Drivers of Change Private sector development
Sector / Subsector

Finance / Finance sector development

Health / Health care finance

Gender Equity and Mainstreaming No gender elements
Responsible ADB Department Private Sector Operations Department
Responsible ADB Division Portfolio Management Division, PSOD
Responsible ADB Officer Doukidis, Doukas
Project Sponsor(s) State Grid International Leasing Co. Ltd.
Description A senior secured loan of CNY492.195 million ($75 million) with 5 years tenor was provided to State Grid International Leasing (SGIL, formerly Yingda International Leasing) in the PRC. The proceeds were used to finance hospital facilities in counties or lower tier cities (i.e., excluding provincial capital cities) in the central and western regions of the PRC. This include direct lease of modern medical equipment as well as hospital fixed assets investments through sale and lease back transactions. According to the latest WHO data, the total health care expenditure accounted for 5.4% of the GDP in the PRC in 2012, significant lower than the global average of 9.2%. The healthcare investments are lower in the less developed central and western regions, leading to poorer facilities. There are 2.96 and 3.10 hospital beds per thousand populations in the central region and western region respectively, while the ratio was 3.17 in the eastern region. In the central and western regions, the average assets per hospital were CNY79.9 million and CNY68.9 million, respectively, significantly lower than the average of CNY122.6 million in the eastern region.
Objectives and Scope For Healthcare Finance in Underdeveloped Regions of the People's Republic of China.
Status of Development Objectives

As of 30th June 2018, ADB fund was utilized to 6 Eligible Lease Contracts, with total outstanding contract amount: RMB 343,856,686.00

Type of Eligible Lease Contracts: Sale and lease back for purchase of new medical equipment

Location_Southwest region Sichuan province,Xinjiang Province, Hunan Province, and Guizhou Province.

Status of Operation/Construction On-going.
Linkage to Country/Regional Strategy

The project supports three strategic priorities identified by the Midterm Review of Strategy 2020: (i) poverty reduction and inclusive economic growth, (ii) middle-income countries, and (iii) private sector development and operations. The Midterm Review of Strategy 2020 highlights ADB's focus on reducing vulnerability and inequality, and sets the target of increasing health operations to 3% 5% of its annual approvals of financial assistance from 2% during 2008 2012. By financing hospitals in counties and low-tier cities in underdeveloped regions, the proposed project will help address inequality in healthcare access and quality in the PRC. By promoting public private cofinancing, ADB will provide a catalytic solution for healthcare finance in an upper-middle-income country. The project is also consistent with the PRC country partnership strategy, 2011 2015, which emphasizes inclusive and sustainable growth and targeted interventions in the finance sector. It is aligned with the current PRC country operations business plan, 2015 2017, which prioritizes promoting balanced development of rural and urban areas, supporting catalytic nonsovereign projects, and private sector development.

The proposed project is in line with ADB's latest operation plan for the health sector, which identifies health service delivery as a focus and calls for more investment in strengthening the quality and coverage of healthcare services. Furthermore, supporting finance sector development is a key focus of development assistance for ADB. The proposed project builds upon previous support that ADB has provided to the leasing industry in the PRC.

Safeguard Categories
Environment FI
Involuntary Resettlement FI-C
Indigenous Peoples FI-C
Summary of Environmental and Social Aspects
Environmental Aspects The project is classified category FI for impacts on the environment. The investment's potential environmental impacts and its risks associated with SGIL's existing and/or likely future portfolio and commitment and capacity for environmental and social management, have been assessed. Most of SGIL's transactions under the loan will have minimal or no adverse environmental impacts.
Involuntary Resettlement The loan financed the lease of modern medical equipment as well as hospital fixed-asset investments (e.g., construction, expansion, or refurbishment of hospital buildings or associated medical facilities) through sale and leaseback transactions. The investment did not undertake activities that require involuntary acquisition of land or involuntary restrictions on land use or on access to legally designated parks and protected areas. The investment excluded any activities that are assessed category A or B on involuntary resettlement.
Indigenous Peoples The investment did not undertake activities that will directly or indirectly affect the dignity, human rights, livelihood systems, or culture of Indigenous Peoples or affect the territories or natural or cultural resources that indigenous peoples own, use, occupy, or claim as an ancestral domain or asset.
Stakeholder Communication, Participation, and Consultation SGIL conducts consultations with stakeholders, including local residents and all their concerns will be incorporated for implementation. During construction, expansion, or refurbishment of hospital buildings, job opportunity information are disclosed to local residents.
Timetable for assistance design, processing and implementation
Concept Clearance 10 Jun 2015
Credit Committee Meeting -
Approval 29 Sep 2015
Last PDS Update 22 Mar 2019

Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

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Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

None currently available.

Evaluation Documents See also: Independent Evaluation

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Related Publications

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