IFC’s A loan is being supported by the IDA18 Private Sector Window Local Currency Facility (PSW LCF) (“blended concessional finance”) through cross-currency swaps with IDA. The most significant market risk faced by the Project is the lack of affordable long-term local currency financing, particularly during the COVID-19 crisis. With the support from the blended concessional finance, IFC will be able to tackle this market risk and provide long-term funding in local currency at a rate that the Project can sustain. Without this support, the Project would not move forward. The Project will help the Company, one of the largest private healthcare provider in Uganda and a major component of the Government’s COVID-19 preparedness platform, to continue providing critical healthcare services through its network of clinics and hospitals during the COVID-19 crisis, and allow its non-profitable programs (HIV, diabetes, hypertension etc.) to continue sans any interruptions, which will in particular benefit the vulnerable population seeking healthcare during the COVID-19 crisis. The level of concessionality (i.e., “subsidy”) provided by the blended concessional finance is estimated to be 10.8% of the total project cost. The total cost of the project is US$6.5 million. This estimate is based on the difference between (i) a “reference funding base rate” and (ii) the “concessional funding base rate” being charged by the PSW LCF. Further details and historical information on estimated subsidy levels in IFC’s blended finance portfolio can be found at: www.ifc.org/blendedfinance. As is the case with all of IFC’s blended concessional finance co-investments, this project has been assessed against the Enhanced Blended Concessional Finance Principles for DFI Private Sector Operations adopted by IFC and more than 20 other DFIs in 2017. Further information on these Enhanced Principles and IFC’s blended finance approach and governance can also be found at: www.ifc.org/blendedfinance.

4.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	4.0
Equity

* These investment figures are indicative

The Project will provide a signaling effect to the market to encourage investment and potential partnerships with global healthcare companies to support businesses struggling due to the COVID-19 pandemic. The Project will help the Company in maintaining acceptable level of operations so as to satisfy demand for healthcare services in Uganda and will also allow its non-profitable programs to continue without any interruptions. By supporting its clients' capacity to sustain operations during this acute shock, IFC best positions the private sector to support the economic recovery process, shortening the time it will take for the most vulnerable to return to their traditional income-earning opportunities.

IFC's additionality is driven by its countercyclical role during crises. The Real Sector Crisis Envelope component contributes: successful experience with rapid crisis response efforts, its set of programs aimed at investing both large scale and transactional liquidity and capital for trade finance and working capital in emerging markets, its ability to support real sector clients to address liquidity constraints in response to COVID-19 and to provide critical goods, equipment and supplies, its ability to help clients re-direct supply chains and its support to continued employment in countries of operation. IFC's additionality is in form of long-term patient capital with adequate grace period, and IFC's experience in helping healthcare companies assess and prepare for potential long-term impacts of the COVID-19 crisis.

CHL’S E&S performance continues to be Satisfactory and aligned with GIIP. Virtual appraisal focused on the Uganda operations where investment will be directed and concludes that this investment will not result in new material E&S risks and impacts. The company is in compliance with IFC PS requirements.

 

Scope of IFC’s Appraisal: IFC’s E&S review for this follow-on investment, comprised a virtual meeting with the company’s senior management, environmental health and safety team via a video conference to understand the impact of the new projects on the existing risk profiles, and impact of the COVID-19 pandemic on the company’s operations - particularly on its workforce. IFC also reviewed related information and documents shared by the company and its own records of the company’s E&S performance during the current investment. After COVID-19 related travel restrictions are removed, IFC will visit the client, as part of the regular portfolio monitoring activities.

 

The two additional wards in Mukono and Mbale hospitals, already substantially built to fit the existing structural provisions, present similar level of risk to rest of the other existing facilities in the two hospitals. For these new wards, CIEL will; (i) provide post-construction life and fire safety (LFS) clearance certificates for the two wards in Mukono and Mbale from the Government of Uganda; and (ii) engage a qualified LFS expert to review the LFS status of the two Hospitals and develop LFS improvement plans, to be implemented within agreed timeframes; and (iii) develop a formal retrenchment procedure for any future staff separation.

 

Response to COVID-19 Pandemic

 

Impact on Employment: Due to COVID 19-related business impacts, the company had to make adjustments to its workforce (contract termination or revised terms) which was done strictly as per the local labor law and with adequate engagement of the affected workers. CIEL has no migrant workers in Uganda and has provided temporary workers accommodation facilities for willing workers

 

Health Impact of COVID: IMG has implemented specific occupational health & safety measures to respond to COVID-19 risks in the workplace. At the hospital and all the clinics (17), screening facilities and isolation areas have been set up for first intervention before patients enter the medical facilities. Appropriate PPE has been provided to staff in all facilities. A communications officer was specifically employed to ensure frequent communication of accurate and relevant information both to staff and the public. No significant health impact due to COVID-19 on workforce has been reported.

 

As a condition of this follow-on investment the company will continue implementing the COVID-19 infection prevention, control and response plan, consistent with the PS2 and PS4 Interim Advice for IFC Clients on Preventing and Managing Health Risks of COVID-19 in the Workplace.

 

Moreover, the company will ensure ongoing compliance with IFC Performance Standards – especially provisions under PS2: Labor and Working Conditions and PS4: Community Health Safety and Security.

Please refer to the related Environmental and Social Review Summary (ESRS) document for this project.

Please refer to the Environmental and Social Action Plan (ESAP) tab in the related Environmental and Social Review Summary (ESRS) document for this project.