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The Experience of a Technology and Service Provider
GE
Ahmed RamadanSenior Vice PresidentSales & Project Finance
Iraq Finance ConferenceSeptember, 2012
GE
4
DO NOT FURTHER DISTRIBUTE© General Electric Company, 2010
Energy ServicesOil & GasPower & Water
AviationHealthcareTransportation
EnergyTechnology Infrastruct
ure
AmericasAsiaEurope, Middle East &
AfricaCapital Aviation ServicesEnergy Financial ServicesReal Estate
GE Capital
• The only company listed in the Dow Jones Industrial Index today that was also included in the original index in 1896
• Employee: +300,000, Existing: +100 countries• Rev. $156.8B, Earning $11.2B
GE Home & Business Solutions
Appliances & Lighting
Intelligent PlatformSecurity
NBC Universal
CableFilmInternationalNetworkSports & Olympics
A diversified infrastructure, finance and media company taking on world’s
toughest challenges
Who we are
5
DO NOT FURTHER DISTRIBUTE© General Electric Company, 2010
GE in the Middle East by the numbers
• Over 4,000 employees• ‘11 revenues: $8.6B
‘08
2.8
‘06 ‘07
3.65.4
’09
6.4
‘04
2.4
8.4
’10 ’11
8.6
‘11‘10‘09‘08‘07Year
4000
2000
500
0
Em
plo
yees
‘12
Middle East Employee Growth
Revenues ($ in billions)
Year
• 16 facilities completed• 4 facilities under construction
Accelerating our growth, executing on growth, and investing in human
resources
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DO NOT FURTHER DISTRIBUTE© General Electric Company, 2010
GE in IraqIn Iraq since 1950’s … all divisions operating since 2004 …In country team since 2009
GE HC has provided more than• 1500 clinical equipment • 180 conventional and mobile X-Ray • 20 Digital X-Ray• 14 CT scanners/3 MR systems
Awarded CF34-8C engines to power 10 CRJ900 planes ordered from Bombardier and CFM56-7 engines to power 30 Boeing 737 aircrafts
Mega Water injection project for State Company Oil Production (SCOP), main supplier for fuel treatment additive chemicals
More than 130 installed GE turbines with another 72 turbines being supplied to add over 7,000 MW to the grid
Active since the 50’s O&G sector providing power, compressors and pumping equipment to Iraq refineries, compression stations and pipelines
Healthcare
Water
Energy
O&G
Aviation
Others
GE presence in Iraq extent to all other GE divisions from light bulbs, appliances to rail and sensing and inspection equipment, all have been actively supporting the needs for Iraq infrastructure
Iraq Localization2012-2015
• More than 300 employee dedicated to Iraq
• Iraq is identified as one of the top 5 countries for GE focus within MENAT
• Continuous expansion of local presence
• Offices in Baghdad, Basra and Erbil• 10-15 O&G, healthcare project sites• Service centers at Basra operational
baseCurrent
Future
GE Iraq not GE in IraqWe Make Progress Together
Project Finance
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DO NOT FURTHER DISTRIBUTE© General Electric Company, 2010
Global Project Finance Loan Volume
Market trends
• Global project finance activity increased
• Rebound beginning to look sustainable?
• Energy remains biggest chunk of PF activity (~$29B) but decreased by 9.4% to H1 ’09
• Driven by Indian deals, Asia continues to dominate PF market
• Returning bank appetite spurs sponsors to seek longer tenors and higher leverage levels
• ECAs being replaced by local funding in some markets
Global Project Finance Volume by Sector
Source: Thomson Reuters
4%1%
29%
18%
9%
8%
6%
Global project finance
EMEA
Americas
Asia Pacific
1H04 1H05 1H06 1H07 1H08 1H09 1H10
Pro
ceed
s (
US
$)
$160
$140
$120$100$80
$60
$40$20
$0
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DO NOT FURTHER DISTRIBUTE© General Electric Company, 2010
MEA Project finance trends
• $100B ($85B in ‘09) … Total volume of projects
• $62B ($52B in ‘09) … Total debt… Govt and Multilateral: $18B
• in MEA volume by 50% (from $8B to $4B)
• Sustained H2 activity in GCC should make up for the gap
Environment (H1 ’10):
0102030405060708090
100110
Western Europe Middle-East& Africa
North America
H1 20102006 2007 2008 2009
Project Finance – Regional Volume 2005-2009
US$bn
Source: Infrastructure Journal
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DO NOT FURTHER DISTRIBUTE© General Electric Company, 2010
• Need for credible Developers, EPC & investors’ interest and capabilities
• IPP Regulatory framework still in progress
• Scarcity of long term funding…even more challenging on Project Recourse basis
• ECAs although opening up mainly under corporate/sovereign recourse basis, remain off cover under PF structures
• We are seeing appetite from equity investors for Infrastructure Project development
• Regional banks & International Banks with local presence start to consider longer term commercial lending.
AnbarAnbar
NynawaNynawa
DuhukDuhuk
ErbilErbil
Ta’amimTa’amim
Salah Al-deenSalah Al-deen
SulimaniyaSulimaniya
DiyalaDiyala
BagdadBagdad
KarbalaKarbala
NajafNajaf
BabilBabil
QadisiyahQadisiyah
WasetWaset
MaysanMaysan
Thi-QarThi-Qar
MuthanaMuthana
BasrahBasrah
Project finance: “The Iraq case”
GE Experience in Sales & Project
Finance
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DO NOT FURTHER DISTRIBUTE© General Electric Company, 2010
• Global customer finance unit acting as an advisor to the GE Industrial businesses... not a profit center
• Reporting into Corporate Finance with shared objectives with the GE businesses
• A team of ~70 professionals
• Located in 16 countries
Sales & Project Finance
Profile
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DO NOT FURTHER DISTRIBUTE© General Electric Company, 2010
Focus Areas
Financial Advisory Support– Financial Structuring– Debt arranging and
syndication– Access to private equity
investors
Project Development Support in parallel with business tech teams– Contract expertise – Technology/market familiarity– Consortium agreements
Funding Support – Debt Products – Mezzanine Products – Derivatives
Project Development Support for Our Customers
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DO NOT FURTHER DISTRIBUTE© General Electric Company, 2010
Leveraging global funding sources
• China (CCB, ICBC, SDB)
• Russia (Sberbank)
• Gulf (Al Baraka)• Brazil (Unibanco
Aymore, Banco do Nordeste)
Regional/ LocalBanksECAs
• U.S. Ex-Im• Coface• SACE• JBIC• BNDES
MLAs
• OPIC• World Bank• EBRD• IFC
Int’l Banks, Ins,Pension & Finance Co
• SocGen• BNP Paribas• HSBC
Grants
• Brussels/EU• U.S. DOE,
DOD• Millennium
Challenge Corp
Islamic Finance
• IDB• AFESD• ICD – Private• ABC Islamic
Bank/ Retail Pools
Equity
• EPC/developers• Private equity funds
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DO NOT FURTHER DISTRIBUTE© General Electric Company, 2010
Expertise in multiple product areas
• Private• Bank guarantees• Letters of credit• Deferred
payments• Forfaiting• Short/med term
TradeFinanceTrade
FinanceProjectFinanceProjectFinance
• SPC• No/limited
guarantees• Financing
dependant on cash flows
• Frequently requires ECA/ MDB support
Leasing/LendingLeasing/Lending
• Financing typically equipment specific
• Applicable for more developed markets
• Financing frequently requires int’l bank support
ExportFinanceExportFinance
• Mainly public buyer• Gov’t agency• Sovereign, bank
guarantee• Long term• Sourcing issue Political Risk
& Credit
Insurance
Political Risk &
Credit Insurance
• Insure against expropriation, currency inconvertibility, war, etc.
• Insure against corporate risk
• Credit Default Swaps
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DO NOT FURTHER DISTRIBUTE© General Electric Company, 2010
• Technical expertise - Access to “world-class” Technical Support Group
• People – 35 person global team; expertise in development, deal structuring and development finance and return
• Access to developers - Strong relationships with wind and thermal project developers
• Knowledge- Project development expertise to support new product launches
• Products - Diverse energy solutions: Thermal, IGCC, Wind, Solar (photovoltaic), Jenbacher engines powered with biofuels
When a piece of the puzzle is missing …
• Asset management- Long term asset management of GE owned projects
GE global development
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DO NOT FURTHER DISTRIBUTE© General Electric Company, 2010
GE support on IPPs/PPPs
• Global network of access to International and local EPC & Developers
• Dedicated Expertise team to support Iraq
• EPC Screening & Matrix model to evaluate EPC capabilities
• Strong Access to international & regional developers
• Identify gaps and suggest solutions
• Tailor make Funding solutions
• Long term asset management of GE equipment
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DO NOT FURTHER DISTRIBUTE© General Electric Company, 2010
• Expanding capacity to help the Kingdom meet soaring power demand
• More than 300 GE turbines installed
• Generating half (>14GW) of SEC power generation capacity
• GE technology operating in 37 power plants across 4 operating areas
• Developing comprehensive long term financing solutions with US Eximbank since ‘08
• Pilot transaction $1.1B Direct loan to SEC for 3GW(PP8, Feras, Qurrayah)
• Largest ever Loan in the history of US Exim: “Landmark”
• Extended support under direct loans for Al Dur and PP11
+ +
ECA for utilities …
+
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DO NOT FURTHER DISTRIBUTE© General Electric Company, 2010
Working together on future projects
•Regional track record: winning IPP power projects
•Developed relationships: leveraging 30 years of local presence
•Financing: facilitating ECA financing to increase developer capability
•Execution: seasoned regional project capability
… to win and execute successfully
GE is committed to support Iraq meet its infrastructure needs