Catalysed by the COVID experience, healthcare is undergoing end-to-end transformation fuelled by digital innovation, new models of care and a new era of the patient-care provider relationship is emerging which places consumers at the centre of the health system. With Victoria’s recent record $2.9 billion investment towards health facilities redevelopments over 2022-23 alone, the commitment to modernise and expand our built environments for this changing healthcare landscape is clear.

Delivered as a PPP project, the Royal Adelaide Hospital (RAH) is now managed and maintained by the consortium Celsus for a 30-year period. The hospital has delivered many firsts in the Australian health sector around all things environmental sustainability. We sat down for an insightful chat with Celsus Chief Executive Officer, Di Mantell, to discuss how Australia’s first four green star hospital secured the world’s first green and social $2.2. billion re-financing agreement.

Di, tell us a little bit about Celsus, the Royal Adelaide Hospital and your recent green star project?

Royal Adelaide Hospital (RAH) is an 800 bed tertiary quaternary hospital in South Australia which has been funded, designed, constructed and now operated by Celsus. in 2021, we looked to undertake the refinancing and elected a green and social loan for the $2.2 billion debt which is the first of its kind in Australia and the largest globally in healthcare. The reason why we decided to strive for the green and social loan was because we believed the RAH had the environmental and social credentials to qualify for this new type of refinancing. We are now a very well established asset that is high performing and have very solid and externally validated green credentials, as we were built with green credentials in mind.

During COVID-19, our social infrastructure was a particularly attractive project to invest in as it was seen as reliable and dependable. So, we already had the foundations to achieve a loan of this nature, we just needed to start the process. Unfortunately, as the first of its kind in Australia, we had to develop the green and social loan framework none existed. For someone to qualify for this loan, you must achieve certain environmental and social standards such as green star ratings, water conservation, energy efficiency, access to healthcare for the whole (adult) population and provide access to essential educational services.

What an exciting project to be apart of! However, I presume there were a few challenges for you to overcome as a team - what were they and how did you overcome them?

The first challenge was COVID-19. We couldn’t meet with everybody face-to-face to explain the steps and the processes we would follow to achieve such a feat. It's always difficult when trying to get new relationships with banks and have limited opportunities to have the meetings and explain about the site and why it’s so wonderful.

However, our advantage was that we were striving for the largest finance project in Australia and this meant we had a golden opportunity to develop these artefacts ourselves and come up with the framework that describes and validates why we were eligible.

The process of achieving green and social financing requires that we achieve independent certification to meet the criteria of the loan. Then, because we were the first of its kind, we needed to write the framework ourselves which we would then take to the directors and banks who would determine whether the framework was realistic. Once this is achieved, we would then take the approved framework and independent certification to get investors to buy into the loan.

Doing all of the above during the pandemic was the main challenge for us, particularly as we could not bring people to visit the site themselves. The virtual nature of this process created many challenges for convincing investors and banks of the worthwhile nature of the RAH as an investment opportunity.

What about this project do you find particularly interesting compared to the redevelopments you’ve led previously?

This project was the first of its kind. It gives us an ESG platform to keep going and continue to lead the way in social and green initiatives. Once we received the green and social loan status, we are required to report on what we’ve achieved. We must look at what we are doing and how we can continue to achieve this success. We have the platform to work on and grow, now what else can we do in this space. We’ve created an ESG framework and are now looking more broadly to improve the site environmentally, the community socially and a governance structure that sits above it all to hold us accountable.

Tell us about some of the initiatives that the Royal Adelaide Hospital is actioning to be a green star site?

There are a number of components that have helped Celsus achieve this green loan. One of these is how the Royal Adelaide Hospital collects and uses rainwater instead of letting it go to waste. One example is using the harvested rainwater for flushing toilets. Harvested rainwater is also used to ensure the hospital’s many courtyards and green spaces thrive. These spacious and natural settings are a major design feature of the hospital and assist with patient recovery.

The new Royal Adelaide Hospital with its 700 single rooms also produces renewable energy on site through the use of waste heat from its co-generation system to provide heating and hot water. As a result, the Royal Adelaide Hospital was the first large scale hospital complex in Australia to Achieve a 4 star Green Star rating. This rating is based on the sustainable design and construction of the hospital as well as its operation, fit-out and positive impact on staff and patients.

Worldwide, people are becoming more conscious of their social and environmental responsibilities. Celsus wants to take the lead in South Australia and would like others to also extend their commitments in these areas.

What are you most looking forward to about joining us at Victorian Healthcare Week in December?

I'm excited about giving people an option about re-financing. Green and social loans are a real option to consider. Not only is it actually getting the loan, but how can you embed the green and social criteria into what you’re doing. I am excited about outlining and sharing what we’ve actually done to achieve this results. I've also never been to VHW Victoria so I'm very excited to see how it’s different and hear other speakers who are doing PPPs in Victoria. I'm always interested to hear what others are doing in the health sector.