ICEX Seminar
Working with the European Bank
for Reconstruction and Development (EBRD)
May 2016
Madrid, Spain
1. INTRODUCTION TO EBRD
2. EBRD’S INFRASTRUCTURE BUSINESS GROUP (IBG)
3. SEMED, TURKEY AND KAZAKHSTAN – OPPORTUNITIES AND CHALLENGES
4. CASE STUDIES
5. CONTACTS
2
Contents
The EBRD is an international, AAA-rated financial
institution, which promotes transition to market economies
3
EBRD is an international financial
institution that promotes transition to
market economies.
Owned by 65 countries and 2
inter-governmental institutions (EU, EIB).
Recent “new” countries: 2014 Cyprus,
2015 Greece, 2016 Lebanon.
China most recent shareholder (Jan
2016).
Capital base of around EUR 38 billion.
SHAREHOLDING STRUCTURE WHO WE ARE
The EBRD has a triple-A rating from all three main
rating agencies (S&P, Moody’s and Fitch)
(1) Includes European Community and European Investment Bank (EIB) each
at 3%. Among other EU countries: France, Germany, Italy, and the UK each
holds 8.6%
(2) Russia at 4%
EU 27 Countries (1); 59%
EBRD region excluding EU;
14%
USA; 10%
Japan; 9%
Others; 9%
Russia
Kazakhstan Mongolia
—Kyrgyz Republic
—Tajikistan
—Moldova
—Jordan
Azerbaijan
—Morocco
Belarus
Ukraine
—Romania —Serbia
—Kosovo Georgia—
Armenia—
Tunisia—
Croatia— Bosnia and Herzegovina—
Montenegro—
Albania—
FYR Macedonia
—Turkmenistan
—Bulgaria
Estonia—
Latvia—
Lithuania—
Poland
Slovenia—
Czech Republic—
—Slovakia
—Hungary
Uzbekistan—
Central
Eastern Europe SEMED Western Balkans Turkey
Armenia,
Azerbaijan,
Belarus,
Georgia,
Moldova,
Ukraine
Central Asia
(incl. Mongolia)
Egypt—
Where we invest
Greece
Cyprus
The EBRD is active in 37 countries
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Projects in 37 countries across various
sectors.
Aim to promote transition to market
economies by investing mainly in the
private sector.
Mobilise significant foreign direct
investment.
Support privatisation, restructuring and
better municipal services to improve
people’s lives.
Encourage environmentally sound and
sustainable development
EBRD TOP 10 COUNTRIES (ABI IN EUR M) OUR OBJECTIVES
2013 2015
1 RUSSIAN
FEDERATION 1,816 1 TURKEY 1,904
2 TURKEY 920 2 UKRAINE 997
3 UKRAINE 798 3 EGYPT 780
4 POLAND 756 4 KAZAKHSTAN 709
5 ROMANIA 508 5 POLAND 647
6 SERBIA 424 6 SERBIA 478
7 KAZAKHSTAN 328 7 MONGOLIA 467
8 CROATIA 288 8 MOROCCO 431
9 BELARUS 255 9 GREECE 320
10 SLOVAK
REPUBLIC 237 10 AZERBAIJAN 269
The EBRD has invested over EUR 105 billion across a wide
range of projects
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EBRD invested over EUR 105 billion
in around 4,500 projects since 1991.
Loan, equity and guarantees for well-
structured, financially robust projects
of all sizes (incl. many small
businesses).
Close policy dialogue with
governments, civil society and other
stakeholders.
Targeted technical assistance.
Focus on working with the private
sector to foster innovation and open-
market economies.
EBRD SECTORS WHAT WE DO AND WHERE WE ARE
Transport Municipal & Environmental
Infrastructure
Property & Tourism
Financial Institutions Natural Resources Telecommunications,
Informatics & Media
Industry, Commerce
& Agribusiness
Manufacturing
& Services
Power & Energy
At EBRD, the energy and infrastructure sectors are
covered by different business groups
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ENERGY AND NATURAL RESOURCES
LED BY
RICCARDO PULITI (MANAGING DIRECTOR)
INFRASTRUCTURE
LED BY
THOMAS MAIER (MANAGING DIRECTOR)
MUNICIPAL AND
ENVIRONMENTAL
INFRASTRUCTURE
Susan
Goeransson
TRANSPORT
Susan Barrett
INFRASTRUCTURE
RUSSIA AND
CENTRAL ASIA
(RCA)
Ekaterina
Miroshnik
NATURAL
RESOURCES
Eric Rasmussen
POWER & ENERGY
UTILITIES
Nandita Parshad
ENERGY & NATURAL
RESOURCES RUSSIA
AND CENTRAL ASIA
Aida Sitdikova
In 2015, EBRD invested a total of EUR 9.5 billion in 380
projects across a wide range of sectors
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2015 INVESTMENTS:
Debt 82%, Equity 14% and
Guarantee 4%.
Capital market transactions ~20%.
Net profit expected at
EUR 0.8 billion.
Local currency: Tenge, Lira, Rouble,
etc.
Both, direct investments and through
holding companies.
Amid economic and political turbulence,
EBRD remains a strong, resilient and
trusted partner.
0
20
40
60
80
100
120
0
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8
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Net c
um
ula
tive b
usin
ess in
vestm
ent
Annual busin
ess investm
ent
(AB
I) in E
UR
bn
1)
Debt ABI Equity ABI Net Cumulative ABI
(1) Annual Bank investment (ABI) is the volume of commitments made by
the Bank during the year
ANNUAL BANK INVESTMENT1) 2011-2015
EBRD financing with Spanish Companies
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VALUE OF JOINT SPAIN-EBRD INVESTMENT
EUR 4.0 billion as of December 2015:
• EUR 2.3 billion from EBRD
• EUR 1.6 billion from Spain
Major target regions: Poland, Romania and Hungary.
Dominant investment sectors:
• Energy: EUR 1.9 billion
• Industry, Commerce and Agribusiness: EUR 1.2 million
• Infrastructure: EUR 0.3 billion
• Financial Institutions: EUR 0.6 billion
1. INTRODUCTION TO EBRD
2. EBRD’S INFRASTRUCTURE BUSINESS GROUP (IBG)
3. SEMED, TURKEY AND KAZAKHSTAN – OPPORTUNITIES AND CHALLENGES
4. CASE STUDIES
5. CONTACTS
10
Contents
EBRD’s infrastructure business group exemplified
continuous growth
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EBRD INFRASTRUCTURE YE2015
Number of projects to date 640
Net cumulative Bank investment EUR 19.7bn
Non-sovereign Share 50 per cent
EBRD’s infrastructure business group as engaged partner
to facilitate investments across sectors
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TRANSPORT MUNICIPAL /ENVIRONMENTAL INFRASTRUCTURE
In 2015: Investments of over EUR 0.7
billion in 45 transactions.
Since 1994: Over 360 transactions and
commitment of EUR 5.8 billion.
Sector focus: Water and sewage, solid
waste, district heating, urban transport
and roads.
Since 2006: total of 15 PPP transactions
with over EUR 680 million in finance
In 2015: Investments of over EUR 1.0
billion in over 25 transactions.
Since 1994: Over 275 transactions and
commitment of EUR 13.9 billion.
Sector focus: Roads, aviation, ports,
shipping, rail and intermodal / logistic
service.
Since 2006: total of 12 PPP
transactions with over EUR 1.2 billion in
finance
EBRD infrastructure investments 2015: over EUR 1.7 billion in 70 operations.
Supported privatisation, restructuring and better infrastructure service delivery.
Promoted policy dialogue with regards to investment climate business environment and policies.
EBRD as catalyst to access additional equity, debt and trade finance.
Creating the Environment for Private Sector Participation
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EBRD VALUE ADDED FOR
PRIVATE SECTOR PARTICIPATION
Broad product range to engage with the
public sector with the aim to create
commercial principles for future private
sector participation.
Regulatory and legal reforms to support
the private sector and a clear
understanding and allocation of risks
between the public and private sectors.
Commercialisation of public entities:
Cost recovery tariffs / user fees
Improved cash flow and cost monitoring
Outsourcing of (non-) core activities
Public service/ management contracts
Key technical cooperation:
Financial/ operational improvement
programmes (FOPIPs)
Assistance with PPP tendering
Key tool: IPPF
1. INTRODUCTION TO EBRD
2. EBRD’S INFRASTRUCTURE BUSINESS GROUP (IBG)
3. SEMED, TURKEY AND KAZAKHSTAN – OPPORTUNITIES AND CHALLENGES
4. CASE STUDIES
5. CONTACTS
14
Contents
EBRD Snapshot in SEMED
• Permanent offices were opened in Tunis and Amman in 2013, in Egypt in 2014 and in
Morocco in 2015.
• To date, over 90 projects have been signed for a total value of EUR 3.5 billion.
• Local currency financings are available in the four countries.
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49% Egypt
27% Morocco
16% Jordan
8% Tunisia
~1%
0% 0% 0% 0%
Egypt (49%) - EUR 1.7 billion (33 projects)
Morocco (27%) - EUR 0.9 billion (26 projects)
Jordan (16%) - EUR 0.6 billion (22 projects)
Tunisia (8%) - EUR 0.3 billion (20 projects)
SHARE OF EBRD’S PORTFOLIO IN SEMED BY REGION
Note: as at 31 March 2016
24% FI
25% Corporate 21%
Infrastructure
30% Energy
SHARE OF EBRD’S PORTFOLIO IN SEMED BY SECTOR
Note: as at 31 March 2016
• Continued strong centralization of the decision-making
processes
• Limited financial resources of the government and
broader economy
• High standards of basic utilities since the end of the
Revolution
• Heavily subsidized and non-
market oriented tariff systems
• Environmental challenges
• S&P credit rating - Morocco
(BBB-), Tunisia (BB-)
Tunisia and Morocco: Reforms have initiated but
challenges persist
Morocco and
Tunisia
Opportunities Challenges
EBRD Added Value
• Decentralization / reforms initiated but still in early
phase
• Investments needed urgently (due to demography and
urbanization)
• New PPP law in Morocco
Private Sector Development (IPPs, PPPs)
Technical assistance, adoption of best practices (i.e. ONEE)
Support for more efficient uses of energy resources (E2C2)
Promoting commercialization by improving regulation and reforming the tariff system (i.e. ONEE Water
project)
Funding of projects in rural areas and securing sustainability of supply
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Egypt
Opportunities Challenges
EBRD value added
• Significant underinvestment in all infrastructure sectors
(e.g. railway, local transport, wastewater)
• Inefficient and outdated means of transport
• Water network available only to 50% of the population
(additional USD 12 billion required)
• Existing waste disposal systems are
fragmented and unstructured, with large
areas undersupplied
Egypt: Targeted reforms and private sector promotion as a
basis for sustainable growth
• Political challenges: governance issues, slow progress of
the legislative reform
• Tariff systems are not market based, are inefficient and
highly subsidized
• Involvement of the private sector is very limited due to
structural financing difficulties
• Unregulated financial help (i.e. Saudi
Arabia, Kuwait, UAE…)
• S&P credit rating (B-)
Assistance with decentralization and development of
targeted reform agenda (e.g. CTA)
Private sector development (e.g. Maintenance contracts: Egyptian National Railways)
Securing of energy supply for sustainable development of the private sector (e.g. EEHC Project)
Technical cooperation to institutionalize international best-practices, including "Gender strategy"
Ensuring long-term capital, unavailable on the market, and cooperation with other IFIs (i.e. CTA)
Abu Rawash WWTP (largest
PPP in Egypt)
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EBRD in Turkey (1) Key EBRD figures
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The EBRD has been investing in Turkey since 2009 with EUR 7.2 billion investments and
over 180 projects signed
Today, Turkey is the biggest country of EBRD operations
In the resident offices in Istanbul, Ankara and Gaziantep, EBRD employs 50 professionals
In 2015, EBRD invested EUR 1.9 billion for over 40 projects in Turkey
EBRD Snapshot in Turkey
EBRD INVESTMENT IN TURKEY
SHARE OF EBRD’S PORTFOLIO IN TURKEY BY SECTOR
Note: as of 31 March 2016
• Increases in the length of high speed rail lines,
motorway network and passenger capacity at airports
• Surge in the construction of hospitals with provision of
facility management in the form of PPPs
• Government strategy with a strong focus on raising
education standards – possible school
PPPs in the future
• Significant underinvestment in municipal
wastewater and solid waste facilities,
large areas left underserviced
Technical cooperation to support the PPP programmes, procurement practices
and increased private sector competitiveness through improved corporate governance
Assistance with devising creative financing structures and credit lines which are replicated by other businesses and
banks (intensive policy dialogues with national authorities)
Key advisory role in social infrastructure projects to make the PPP contracts bankable through policy dialogue with Ministry of
Health and sponsors
• Deteriorating macroeconomic and financial conditions
(high inflation, currency depreciation, external
imbalances and growing NPLs)
• Political instability (social and political polarisation,
spillovers from the conflict in Syria, tensions with
Russia).
• S&P credit rating (BB+)
Turkey
Opportunities Challenges
EBRD value added
Turkey: Opportunities in the social infrastructure sector,
contrasted with a challenging macroeconomic environment
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EBRD in Turkey (1) Key EBRD figures
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To date, EBRD’s investment amounts to EUR 6.3 billion in over 205 projects
Resident offices in Almaty and Astana
In 2015, EBRD invested over EUR 705 million for 30 projects in Kazakhstan
EBRD Snapshot in Kazakhstan
EBRD INVESTMENT IN KAZAKHSTAN
SHARE OF EBRD’S PORTFOLIO IN KAZAKHSTAN
BY SECTOR
Note: as of 31 March 2016
Amended legislation on PPPs was
developed with the participation of EBRD and WB
Advisory on the preparation of the PPP structure, following international best
practice (e.g. BAKAD ring road project) and technical cooperation to support selection
of qualified advisors
Assisting the authorities in balancing the roles of the state and the market by supporting growth of private sector
enterprises (commercialising of public enterprises and appropriate risk sharing the private and public sectors)
• Growing population and raising standard of living
• Improved investment climate due to a set of systematic
reforms taken by the government
• Infrastructure development as a cornerstone of the
government’s new economic policy (modernisation of
utilities and social infrastructure)
• New PPP law adopted in 2015, aimed
at expanding the breath of PPPs
• Privatisation programme of state
infrastructure assets
(airports and ports)
• Uncertain macroeconomic prospects (low oil prices,
depreciating currency, deteriorating external
environment, budget deficit…), S&P credit rating: BBB
• Poor institutional environment and slow diversification
of the economy (reliance on oil)
• Slow progress of the privatisation programme
• S&P credit rating (BBB)
Kazakhstan
Opportunities Challenges
EBRD value added
Kazakhstan: Growing market with a strong state support
for public-private partnerships
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Contents
1. INTRODUCTION TO EBRD
2. EBRD’S INFRASTRUCTURE BUSINESS GROUP (IBG)
3. SEMED, TURKEY AND KAZAKHSTAN – OPPORTUNITIES AND CHALLENGES
4. CASE STUDIES
5. CONTACTS
Project
Summary
Cross regional: Aqualia Investment Venture
Client
Aqualia New Europe (“ANE”) is an investment vehicle created in 2009, in which EBRD has 49% and FCC Aqualia has the remaining 51%.
The vehicle was created to promote investments in the water and wastewater sector in EBRD’s countries of operations.
EBRD Finance
An equity investment of up to EUR 30 million
Aqualia New Europe’s investment:
In February 2015, ANE completed its first investment through the acquisition of Aqualia’s 45 per cent stake in the New Cairo WWTP in Egypt. The New Cairo WWTP was a PPP awarded in 2008 to Orasqualia, a 50/50 joint venture between Aqualia and OCI. The contract is a 20 year concession to build, own and operate a 250,000 m3/day WWTP.
Abu Rawash WWTP PPP
In August 2015, ANE was awarded the contract for the Abu Rawash WWTP PPP. The PPP contract is the largest awarded since the start of the PPP programme in Egypt in 2006. The project is a 25 year to build, own and operate a 1.6 million m3/day WWTP. Total project costs are EUR 500 million.
6 May, 2016 23
2009 Signed in
Project
Summary
6 May, 2016 24
Client
ADN PPP Saglik Yatirim, a special purpose vehicle
Objective
Construction of an integrated hospital campus in Adana (population of 1.66 million), under an infrastructure facilities management PPP, including sustainable energy investments
EBRD finance:
• A/B loan of up to EUR 225 million (EBRD loan EUR 125 million and a ‘B loan’ tranche of up to 100 million syndicated)
• Co-financed by the International Finance Corporation (IFC), bilateral agencies (DEG/Proparco) and commercial bank
EBRD value added/impact:
• Demonstration effect for commercial financing for privately financed, procured and operated hospital infrastructure;
• Implementation of value for money assessment and strengthening of the monitoring function for hospital facilities management PPP projects
Turkey: Adana Hospital PPP Project
Signed in
2015
Project
Summary
6 May, 2016 25
Turkey: EBRD as an anchor investor in a
Turkish corporate bond
Signed in
2016
Client:
Rönesans Holding A.S., a joint stock conglomerate with activities in construction, real estate and energy
EBRD financing:
An anchor investor in Rönesans’ TRY 200 million bond issue in the amount of up to TRY 100 million.
EBRD value added/impact:
EBRD’s participation principally utilised for the equity needs in the Elazig Hospital PPP project.
• Facilitating development of the non-financial corporate bond market by increasing bond maturities;
• Encouraging companies to raise financing from the bond markets;
• Promoting a level of transparency sufficient to attract investor participation both internationally or locally.
Project
Summary
Tunisia: Clean-up of Lake Bizerte
Client
Office National de l’Assainissement (ONAS), ONAS, is the national sanitation utility created in 1974 to manage wastewater in Tunisia reporting to the Ministry of Environment and Sustainable Development. It provides sewerage services to 170 municipalities totalling over 6.6 million people.
EBRD Finance
A €20 million direct loan to ONAS and technical assistance, guaranteed by the Republic of Tunisia with a 18 years tenor, inclusive of a 4 years grace period.
Use of proceeds
To support the expansion and rehabilitation of the sewage network of the Bizerte’s region and the rehabilitation of three wastewater treatment plants located near the Lake of Bizerte.
EBRD value added / impact The operation will improve sanitation services to approximately 400,000 inhabitants in the Bizerte Governorate. Improvement in the water quality of the lake will also have a positive impact on the development of tourism and aquaculture.
6 May, 2016 26
2015 Signed in
Project
Summary
Morocco: Nador West Med
Client
Nador West Med is a Moroccan public company under private law, created and charged by the government for implementation, development, planning, promotion and management of the industrial port complex.
EBRD Finance
EBRD financing EUR 200 million. Total cost of the project EUR 943 million.
Use of proceeds
Financing the construction of basic port infrastructure for a greenfield port in Nador, Morocco.
EBRD added value / impact
• Expanding competitive market interactions by attracting FDI investors with subsequent market linkages to creating a local industry.
• Promoting private ownership by awarding all commercial port operations to third parties under concession contracts, including container handling and operation of a hydrocarbon terminal.
• Setting standards for corporate governance and business conduct for infrastructure projects in Morocco through implementation of environmental and climate-related measures.
6 May, 2016 27
2015 Signed in
Project
Summary
6 May, 2016 28
Egypt: Cairo Metro
Client
the Arab Republic of Egypt. The beneficiary is a state owned National Authority for Tunnels (NAT).
EBRD Finance
A sovereign loan of up to EUR 175 million to the Government of Egypt. The loan will consist of a committed tranche (EUR 100 million) and an uncommitted tranche (EUR 75 million, utilised only in the event the EIB financing does not come through).
Use of proceeds:
Procurement of new train sets for Cairo Metro Line II, improvement of metro’s services and lower carbon emissions.
EBRD value added/impact
The project will improve and reform public transport services in Cairo (greater commercialisation of services, enhanced private sector participation, improved regulation and opportunities for on the job training and use of carbon monetisation mechanisms).
Signed in
2015
Project
Summary
Hungary: Iberdrola Magyar Wind
6 May, 2016 29
Client Iberdrola Renovables Magyarország (“IBR Magyar”) is a fully-owned Hungarian subsidiary of Iberdrola Renovables, a world leading developer in the renewable energy industry.
EBRD Finance 25% equity investment in IBR Magyar of the HUF equivalent to up to EUR 50 million, by subscribing for shares following a capital increase.
Use of Proceeds Proceeds of the investment will fund the development, construction, and operation of the Company’s current portfolio of wind power projects in Hungary.
EBRD value added By financing one of the most visible wind farm portfolios in Hungary, EBRD’s investment will provide comfort to project developers and other private investors and will demonstrate confidence in Hungary’s renewable energy framework.
2010 Signed in
Project
Summary
Cross regional: Gestamp
Client Gestamp, a global leader in the design and manufacture of automotive metal components and a key supplier to the world’s leading automotive producers.
EBRD Finance A loan facility consisting of a EUR 100 million.
Syndicated amortized A/B loan and a EUR 50 million loan with bullet repayment
Use of Proceeds to partially finance the expansion of Gestamp Automocion in the EBRD Countries of Operations, namely in Russia, Turkey, Hungary and Poland.
EBRD value added The loan support implementation of Gestamp’s strategy of increasing its production capacities in the countries where its customer OEMs are moving their car assembly facilities. As a supplier of metal components, further expansion of Gestamp will create a critical mass of demand for the locally produced automotive steel that itself shall trigger the investment into the high quality automotive steels by major local steel manufacturers.
Signed in
2013
30
Project
Summary
Poland: Golice Wind Farm
6 May, 2016 31
Client Golice Wind Farm - fully owned by Acciona Energy Poland, itself a subsidiary of Acciona Energía
EBRD Finance Senior loan of PLN 97.2 million (EUR 22 million equivalent) and representing up to 50 per cent of the total debt financing, and up to 35 per cent of the total Project cost.
Use of Proceeds Develop the 38 MW Golice wind farm in Poland
EBRD value added Setting standards for business conduct, through communicating the viability of renewable energy financing in Poland to the market; expansion of renewable energy sector in Poland, through supporting Acciona’s participation in this and other renewable energy projects in the country
2011 Signed in
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Contents
1. INTRODUCTION TO EBRD
2. EBRD’S INFRASTRUCTURE BUSINESS GROUP (IBG)
3. SEMED, TURKEY AND KAZAKHSTAN – OPPORTUNITIES AND CHALLENGES
4. CASE STUDIES
5. CONTACTS
Contact
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Thomas Maier
Managing Director, Infrastructure
Tel: +44 20 7338 7924
Email: [email protected]
EBRD
One Exchange Square
London, EC2A 2JN
UK
www.ebrd.com