ECA Financing for Healthcare Projects: A Viable Option That Requires Careful Planning

Healthcare infrastructure projects in emerging markets often face the same challenge: the need is clear, the technical solution can be defined, but financing remains difficult.

Export Credit Agencies can play an important role in closing this gap.

ECAs are public institutions, or institutions acting on behalf of governments, that support national exports by providing loans, guarantees, insurance or other forms of official export-credit support. In a typical buyer-credit structure, a commercial bank finances the foreign buyer while the ECA covers part of the political and commercial repayment risk. This can make long-term financing available where conventional lending would otherwise be difficult or too expensive.

Examples include SACE in Italy, UKEF in the United Kingdom, Bpifrance Assurance Export in France, Euler Hermes in Germany, US EXIM, NEXI and JBIC in Japan, and K-SURE and KEXIM in South Korea. The OECD maintains the official list of Export Credit Agencies involved in its export-credit work.

For healthcare infrastructure, these instruments can be particularly relevant because hospitals combine construction, medical equipment, specialised engineering systems, technology and professional services, often sourced internationally.

How a typical ECA-backed structure works

A simplified structure can look like this:

The precise structure changes from transaction to transaction. Some ECAs provide guarantees or insurance while commercial banks provide the loan; others can also participate through direct lending or refinancing structures.

For example, SACE's Buyer's Credit product can insure the financing bank against political and commercial non-payment risk, potentially covering up to 100% of the financed amount, while allowing the foreign buyer to finance capital goods, services or infrastructure works supplied by Italian companies.

Why ECA financing can fit healthcare projects

Healthcare projects have several characteristics that can make ECA-backed financing relevant.

A major hospital may include not only civil works, but also medical imaging, operating theatres, intensive care equipment, laboratory systems, CSSD, medical gases, hospital IT, building-management systems, specialist MEP installations, furniture, commissioning, training and long-term technical services.

These packages can create significant export opportunities for manufacturers and specialised contractors.

At the same time, many healthcare projects require longer financing tenors than those available through normal commercial lending, particularly in emerging markets where sovereign or country risk may restrict access to capital.

Export credit can therefore help combine technology, procurement and long-term financing within the same project structure.

Looking for the ECA has to be done before the project has been completely designed

A common approach is:

Needs assessment → Design → Cost estimate → Feasibility → Procurement Strategy → Financing

and only at the end does the promoter start looking for an ECA that could finance the project.

In my view, this sequence can create serious problems.

An ECA-backed transaction is connected to the sourcing of goods and services from the supporting country. Eligibility therefore depends, among other elements, on the composition of the commercial contract and the relevant national-content requirements.

SACE (the Italian Export Credit Agency), for example, explicitly uses Italian content as a reference parameter when assessing eligibility for export-credit support.

This means that the financing structure can influence procurement decisions and procurement decisions influence project cost.

The ECA question therefore needs to enter much earlier.

Export content is not only a financing issue

Export content is sometimes treated as something to verify once the financing package is already being negotiated. For complex healthcare projects, that is too late.

When evaluating the ECA route during project preparation and feasibility, the team should already be asking:

Can the required content realistically be achieved?

Which project packages can be sourced from that country? And at what cost?

Which components need to remain locally or internationally sourced?

Does changing supplier increase CAPEX?

These questions can materially affect the economics of the project.

The OECD framework also regulates aspects such as repayment terms, minimum premium requirements and the amount of local costs that can receive official support. Under the current Arrangement, eligible local-cost support can reach up to 40% of the export-contract value in high-income OECD countries and 50% in other countries.

So, the feasibility study should not simply identify an ECA. It should test whether the procurement structure required by that ECA is economically achievable.

The cheapest financing may not produce the cheapest project

This is, in my view, one of the most important points when comparing ECA-backed alternatives.

Suppose two structures are available.

ECA A offers a lower financing cost but reaching its required export content forces the project to source some hospital systems or equipment at a higher price.

ECA B appears more expensive from a purely financial perspective but its sourcing structure gives the project access to a more competitive combination of suppliers.

Looking only at the financial terms, ECA A appears preferable but looking at the total project cost, ECA B may actually be the better solution.

The comparison therefore should not stop at the interest rate and the premium. It should consider the procurement cost, export-content implications, local-content implications, equipment cost and lifecycle consequences.

The cheapest financing structure is not necessarily the structure that delivers the lowest total project cost.

Why healthcare projects require specialist procurement knowledge

This issue becomes particularly important in healthcare.

In many infrastructure sectors, the supply chain is relatively concentrated around civil works and standard engineering systems.

In healthcare projects, medical equipment and specialised healthcare systems can represent a substantial part of total project value and involve dozens of technology categories and supplier markets.

A financial advisor can model debt service, repayment profiles, affordability and financing scenarios.

That expertise is essential but it needs to be connected with healthcare-specific technical and procurement knowledge. This requires someone who understands whether an MRI package is competitively priced, an operating-theatre solution is technically equivalent to an alternative, a medical-gas system can realistically be sourced from another market, or whether meeting an export-content threshold introduces costs that were never included in the initial feasibility model.

If those elements are underestimated, the project may look financially attractive on paper and become substantially more expensive during procurement.

This is why coordination is needed from the beginning

A specialised healthcare infrastructure advisor or project-development coordinator should be involved early enough to connect healthcare planning, technical requirements, cost estimation, procurement strategy and export-content analysis.

This coordination becomes particularly important during pre-feasibility, when the financial options are compared and evaluated and key assumptions are still flexible.

Conclusion

ECA-backed financing can be an extremely effective tool for developing healthcare infrastructure as it can improve access to long-term capital and reduce certain financing risks.

ECA-backed financing should not be selected after a healthcare project has already been designed. It should be considered while the project is being prepared.

The real comparison is not simply between interest rates, premiums and repayment terms.

It is between the total cost and feasibility of alternative project-financing-procurement structures.

In healthcare infrastructure, where medical equipment and specialised hospital systems can represent a significant portion of project value, this comparison requires financial, technical and procurement expertise to work together from the beginning.

The right ECA is not necessarily the one offering the cheapest financing. It is the one that helps create the most competitive, feasible and sustainable project structure overall.

Sources

1. OECD — Export Credits and the OECD Arrangement on Officially Supported Export Credits. OECD
2. OECD — Financing Terms and Conditions, including local-cost support, CIRRs and minimum premium principles. OECD
3. OECD — Official Export Credit Agencies, listing ECAs including SACE, Bpifrance Assurance Export, Euler Hermes, NEXI, JBIC, K-SURE and KEXIM. OECD
4. SACE — Buyer’s Credit / Contract-tied financing for Italian procurement. SACE
5. SACE — Policy on Italian Content in Export Credit Operations. SACE
6. UK Export Finance — Buyer Credit Facility. GOV.UK
7. Export-Import Bank of the United States — foreign buyer financing and loan guarantees.