FILE - View across Exchange Square of the European Bank for Reconstruction and Development Headquarters (EBRD), London, United Kingdom, 2015 - EBRD/Dermot Doorly
CAIRO – 18 February 2020: European Bank for Reconstruction and Development (EBRD) offered a financing facility worth $125 million to be used for investments by Al Batterjia Medical SAE group to develop a greenfield general hospital in Alexandria, Egypt, and another in Casablanca, Morocco.
EBRD commented that it is supporting the development of high-quality hospitals in Egypt and Morocco, teaming up with other international financial institutions to deliver funding under an Islamic finance structure known as a “Commodity Murabaha” that the Bank is using for the first time.
“The project aims to improve the quality of hospital services in Egypt and Morocco beyond the current standards. The facilities will benefit from internationally recognized certification, which rare in these two countries,” the bank noted.
In addition to raising the quality of available healthcare services, the developers are also committed to delivering high standards of efficiency in the use of energy, water and construction materials, according to EBRD statement.
This is the first time the EBRD has used a Commodity Murabaha, which is just one of many financial products that are compliant with the Islamic law.
“A Murabaha transaction is a multilateral sale arrangement whereby the financier – equivalent to the lender –purchases existing commodities from a supplier and immediately resells them to its client – equivalent to the borrower – on terms that provide for deferred payment,” it clarified.
“The deferred payment is calculated as the original purchase price of the commodity plus a premium to include the financier’s profit margin," the bank explained.
According to EBRD, the International Finance Corporation (IFC) led the structuring of the “Commodity Murabaha” financing, which comprises $20 million from the EBRD, $25 million from the OPEC Fund for International Development, $18.75 million from the Finnish Fund for Industrial Cooperation, and $61.25 million from the IFC itself and the IFC Managed Co-Lending Portfolio Program (MCPP).
The EBRD started operating in the southern and eastern Mediterranean region in 2012 and to date has invested more than €11 billion in 255 projects in Egypt, Jordan, Lebanon, Morocco and Tunisia.