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Mar 31, 2017

US $82m Lagos hospital project may attract IFC funding

A N32bn (US$82m) greenfield hospital project in the Nigerian city of Lagos consisting of a 150-bed multispecialty hospital and two primary care centres has received the backing of two investors and potentially a third –
development finance institution IFC. We speak to John Adesioye, CEO of consultancy Utopian Consulting International, who says this is the sort of investment that Nigeria needs. “This investment is going to 

 

boost confidence in the healthcare market in Nigeria and across Africa, especially because organisations like IFC and ACA (African Capital Alliance) are usually known to be risk-adverse and because the project targets different levels of care,” says Adesioye. “What is important for the country is the development of facilities which are connected and work as feeders. You cannot improve quality of care without a referral system,” he adds.

 

The project, a 150-bed multi-specialty hospital and two 10-bed primary care centres, will be funded 50-50 by equity and debt. According to the publication African Capital Digest, ACA will provide up to 40% of the equity (N16bn or US$41m) via its CAPE IV fund and AXA Mansard will get 20% of the equity. The IFC is still considering an investment of N7bn (US$8.2m) for a 20% stake – although it has not made an announcement yet.

 

Adesioye says such developments could prevent Nigerians from seeking healthcare abroad. He estimates the country loses up to US$3bn each year that could have been spent at home. Meanwhile, South African hospital operator Healthshare Health Solutions is rumoured to be the group that will be in charge of managing the facilities once they are completed.

 

Adesioye reckons this would be a good choice: “Healthshare Health Solutions focuses on hospital management but with an emphasis on preventive care and occupational medicine, which not enough healthcare companies in the region really recognise as essential.” The Nigerian healthcare landscape is characterised by poor regulation and fragmentation, with the majority of providers consisting of small private hospitals and a few tertiary and primary care chains. Several PPPs are also under construction, including 1,800 beds in three different projects in the capital Abuja.

 

Healthcare Business International, March 31, 2017

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