Without the support of the blended concessional finance co-investment, the IFC investment and the expected development impact, primarily in the form of increased access to quality health services in the Khyber Pakhtunkhwa province in Pakistan, will not be achievable or be possible only at lower scale due to unavailability of alternative suitable long-term financing which meets the Project requirements. The level of concessionality (i.e., “subsidy”) provided by the blended concessional finance co-investment is based on the difference between (i) a “reference price” (either a either the market-level return expectation for the project or a comparable reference project, if available; IFC’s return expectation for the investment, which takes into account three main elements: risk, cost and profit; or a negotiated price); and (ii) the “concessional return” expected for the blended concessional finance co-investment. The PSW-BFF will not improve IFC’s absolute returns but will de-risk IFC’s investment through subordination in returns. In the base case the level of concessionality (i.e. the subsidy) provided by the blended concessional finance co-investment is estimated to be around 5.5% of the total project cost, on account of expected depreciation of the Pakistani Rupee (PKR) which is mitigated by PSW-BFF. The total cost of the project is approximately US$13.4 million equivalent at current exchange rates. The key exposure for IDA is the underlying equity risk that may result in the PSW-BFF investment amount not being returned to IDA in full. This is similar to IFC’s risk as an equity investor where it may not recover its net capital investment in the worst case. 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.

10.14 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	10.14
Equity

* These investment figures are indicative

Project-level impact: (i) expansion of a high-quality provider in an area with few high-quality options for patients, (ii) benefitting the healthcare system by strengthening medical education. Market-level impact: (i) potential for replication of systems by other players in the region leading to higher quality care, and (ii) trained staff going to work in other facilities in the region, thereby strengthening overall quality of care.

IFC's additionality includes: (i) long-term innovative financing structure allowing the Company to currency match cashflows and match the long construction and ramp-up cycles associated with the sector and region, (ii) knowledge, innovation and capacity building through piloting the IFC quality diagnostic and sharing best practices, which will support NWGH and NWSM to obtain JCI accreditation, (iii) standard setting in areas such as E&S, green buildings, and corporate governance.

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.