UFH is the China-based healthcare services division of Chindex, a NASDAQ-traded company based in Bethesda, Maryland. UFH is the first for-profit integrated healthcare network in China. Its flagship hospital, Beijing United Family Hospital (BJU), was first opened in 1997 by the Chairman and CEO of Chindex, Roberta Lipson, who is widely recognized as one of the leading figures in Chinese healthcare. Since 1997, UFH expanded from a single facility to five facilities including two general hospitals and three outpatient clinics in Beijing and Shanghai.

The total project cost is estimated to be up to $137 million. The proposed IFC investment is for a loan of up to $30 million and an equity investment of up to $10 million.

35.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	25.0
Equity	10.0

* These investment figures are indicative

While the locations of the sites are still to be finalized, the hospitals will be located in the cities of Beijing and Guangzhou, the largest and third largest cities in China respectively. Initial investigations by the company regarding land acquisition indicate that potential sites will result in minimal physical or economic displacement. UFH will ensure that the acquisition of land and the compensation of affected parties are conducted in accordance with local law and the requirements of Performance Standard 5.

The project will have a strong development impact by:

- Expanding access to services meeting international standards in Beijing, Guangzhou and neighboring areas, to meet increasing demand for high quality healthcare services. Such services are not yet available to much of the population in China;
- Providing a model for the provision of private health services in China, which is still in the early stage of opening its heath sector to private practitioners and foreign investment;
- Demonstrating an exemplary approach to managing environmental, health and safety, life and fire safety and disease prevention and control issues;
- Demonstrating best administrative and patient care practices throughout the medical community,
- Fostering an environment for encouraging skilled locals to return to China; and
- Increasing charitable activities that are currently provided by the Hospital.

Through its investment in UFH, IFC will act as a provider of long-term financing, which is currently difficult to obtain for private hospitals in China. In addition, IFC’s role will be critical in catalyzing the financing as IFC will assist the hospital in structuring the overall financial package and obtaining other financing sources needed for the project.

UFH believes IFC has been a valuable partner to-date, expressing that IFC’s financial and global healthcare expertise has brought added value to its growth strategy and improvement of its operation. UFH has also expressed that it benefits from the experience of IFC’s clients in other part of the World. In addition, IFC’s close supervision and enforcement of covenants has enhanced the financial discipline of the company. This new investment would further these benefits to UFH.

While all Performance Standards (PSs) are applicable to this investment, IFC’s environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards:

- PS 1: Social and Environmental Assessment and Management Systems;
- PS 2: Labor and Working Conditions;
- PS 3: Pollution Prevention and Abatement;
- PS 4: Community Health and Safety;
- PS 5: Land Acquisition and Involuntary Resettlement; and
- IFC’s Policy on Disclosure of Information.

The following Guidelines are applicable to this project:

- IFC’s General Environmental, Health and Safety Guidelines, dated April 30, 2007; and
- IFC’s Environmental, Health and Safety Guidelines for Health Care Facilities, dated April 30, 2007; and

This ESRS assesses the project against the above Performance Standards and Guidelines. The project was not assessed against PS6 Biodiversity Conservation and Sustainable Natural Resource Management, PS7 on Indigenous People or PS8 on Cultural Heritage as the project does not involve the harvesting of natural resources or impacts on natural habitat, and it does not impact on either Indigenous Peoples or known Cultural Heritage.

The relevant guidelines have been provided to and discussed with the client on June 12th, 2007 (i.e. IFC Environmental, Health and Safety Guidelines for Healthcare Facilities and IFC Environmental, Health and Safety General Guidelines, both dated April 30, 2007).