ADB Asian Development Bank : Loan to Help Yingda Fund Hospital Facilities in Central, Western PRC

BEIJING, PEOPLE'S REPUBLIC OF CHINA - The Asian Development Bank (ADB) is extending an up to $75 million equivalent loan to Yingda International Leasing, which will allow it to expand badly-needed funding for healthcare equipment and facilities at hospitals in the central and western regions of the People's Republic of China (PRC).

'The government is taking impressive strides to scale up healthcare spending and public health insurance schemes across the country but there are still substantial disparities in the quality of services and access to finance with central and western areas lagging other regions,' said Biao Huang, Investment Specialist in ADB's Private Sector Operations Department. 'The loan to YIL, a Sino-foreign joint venture company with a strong track record in healthcare leasing finance, will give it the longer term funds it needs to help hospitals in underdeveloped regions raise the standard of their facilities and healthcare.'

Healthcare spending in the PRC has risen to around 5.6% of total expenditure but this is still below the global average of 8.7%, and the decentralized system of healthcare finance has led to substantial regional and urban-rural disparities in quality and access to healthcare, with central and western regions faring worse than those in the coastal east. The government is implementing a public hospital reform program and is continuing to scale up health spending but there are still shortfalls in access to finance in underdeveloped regions, with lease finance offering an attractive option for hospitals needing high-value equipment.

At least 60% of the hospitals financed under ADB's loan will be county hospitals, which primarily serve rural populations, while the rest will be located in lower-tier cities in the target areas. Funds will be used to lease modern medical equipment and for other investments including the expansion and refurbishment of hospital buildings.

ADB's support for a private healthcare financier is expected to help promote more public-private cofinancing for healthcare funding. The ADB loan, with a tenor of 5 years. also enhances YIL access to longer term finance, and this will help it better serve its hospital clients and expand its operations in this high impact area.

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members - 48 from the region.