Landmark public-private partnership (PPP) healthcare agreement signed

Maseru, Lesotho, 2008 - The government of Lesotho and a regional consortium led by healthcare services group Netcare recently signed a landmark public-private partnership (PPP) agreement to build a state-of-the-art, public hospital that will dramatically improve the quality of healthcare in Lesotho.

IFC, a member of the World Bank Group, acted as lead transaction advisor to Lesotho's government on this project, a pioneering PPP transaction that serves as a model for increased private sector participation in sub Saharan Africa's often overburdened health sector.

Lesotho's new 390-bed National Referral Hospital will replace its aging Queen Elizabeth II Hospital, which faces shortages of hot water, heat, medical supplies, pharmaceuticals, trained staff, and reliable equipment.

Leading JSE listed private healthcare services provider Netcare, which operates the largest private hospital network in South Africa and the United Kingdom, will design, build, partially finance, and fully operate Lesotho's new hospital, which includes providing clinical services for up to 18 years with a consortium of Lesotho doctors, service providers, and investors.

Commenting on the signing of the agreement, the honourable Timothy Thahane, Lesotho's Minister of Finance, said: “This exciting project provides us with a new, advanced referral hospital at Bots'abelo, the site of the government's medical campus in Maseru. The new hospital will provide a wide range of services, highly-trained staff and specialised medical equipment, while serving as the nation's primary clinical training facility for health professionals.”

The honourable Mphu Ramatlapeng, Lesotho's Minister for Health and Social Welfare, said: “Thanks to the innovative PPP structure, operating costs for the new hospital are roughly equivalent to those at the existing facility. Patients will have access to greatly improved medical services and care, but pay the same minimal charge they currently do at any other public hospital in Lesotho.”

Laurence Carter, Director of IFC's Infrastructure Advisory Department, said: “This pioneering project provides a new and sustainable model for governments and the private sector to work together to provide improved health services for Lesotho, sub-Saharan Africa and other regions.”

The project also features the refurbishment of three semi-urban filter clinics to provide improved services to the public. Together with the main hospital, these refurbished clinics will operate as a health network for the region.

Dr Victor Litlhakanyane, Director of Group Stakeholder Relations at Netcare, said: “By partnering with the government of Lesotho we will be contributing greatly towards making quality primary, secondary and lower tertiary clinical services more
accessible to the people of Lesotho.”

According to Dr Litlhakanyane, 35 private beds will be co-located with the State beds in the same facility, with private specialists visiting and consulting from Bloemfontein.

The project is expected to cost $100 million, which will be partly funded by the Development Bank of Southern Africa. It is anticipated that this will be topped up by a grant of $6.25 million from the Global Program for Output-Based Aid. The World Bank Group will also provide support to the government with contract management.

Construction on the new hospital and clinics is expected to begin in January, 2009. The clinics are scheduled for completion in late 2009; it is anticipated the hospital will be completed in mid 2011.

On behalf of The Government of Lesotho: Tumisang Mokoai +266 5885 0055 or . On behalf of IFS: Jason Hopps +27 (0)11 731 3120 . On behalf of Netcare: Martina Nicholson (011) 4693016 or .