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Working with the European Bank
for Reconstruction and Development (EBRD)
Infrastructure Sector: Investments
September 2016
Porto, Portugal
1. EBRD OVERVIEW – EBRD’S MANDATE, CONTEXT AND COUNTRIES OF OPERATIONS;
2. EBRD’S INFRASTRUCTURE INVESTMENTS
3. COLLABORATING WITH PORTUGUESE SPONSORS: OPPORTUNITIES AND TRACK RECORD
4. SEMED AND TURKEY– OPPORTUNITIES AND CHALLENGES
5. PPP MARKET IN EBRD COUNTRIES
6. CASE STUDIES
7. 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.
People’s Republic of China most recent
shareholder (Jan 2016).
Capital base of around EUR 38 billion.
Strong office network (> 45 locations) in
the region coupled with solid sector
expertise.
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%
Business approach of EBRD
4
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.
Public sector, private sector, PPP focus
Support to local clients through
technical assistance
Amid economic and political turbulence,
EBRD remains a strong, resilient and
trusted partner.
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40
60
80
100
120
0
1
2
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5
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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
Kyrgyz Republic
EBRD financing instruments
28 September, 2016 5
Loans
Senior, subordinated, convertible
Long term (up to 10y or more) or short term
revolving
Floating/Fixed rates
Choice of currencies (€, US$, RUB etc.)
Equity
Common stock or preferred
Minority position only (up to 35%)
Mezzanine debt
Technical Cooperation
As a Multilateral Development Bank, EBRD brings in additional financial capital
and technical assistance to economically viable projects
Other: guarantees, currency swaps, etc.
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—
EBRD country coverage
Greece
Cyprus
Russia
EBRD’s approach is flexible and investment driven
7
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 (IN EUR MILLION) 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
8
GDP: ~EUR 190 billion
GDP: ~EUR 90 billion
GDP: ~EUR 1.5 trillion
GDP: ~EUR 3 trillion
Market potential of the EBRD region for Portuguese companies
Fundamentals of EBRD region
9
Total Population: 76m
Average 2015/ 2016F
GDP change: 2.7% / 3%
EBRD portfolio: EUR 6.2 bn
EBRD Infra portfolio growth
2013-2015: -5%
Total Population: 146m
Average 2015 / 2016F
GDP change: 3% / 2.9%
EBRD portfolio: EUR 3.1 bn
EBRD Infra portfolio growth
2013-2015: 418%
Total Population: 71m
Average 2015 / 2016F
GDP change: 2.8% / 3.1%
EBRD portfolio: EUR 4.0 bn
EBRD Infra portfolio growth
2013-2015: 43%
Total Population: 79m
2015 / 2016F GDP
change: 4% / 3.1%
EBRD portfolio: EUR 6.3bn
EBRD Infra portfolio growth
2013-2015: 86%
EBRD covers a region of 500 million people(*) with a combined GDP of €3 trillion(*)
(*) Excluding Russia
Fundamentals of EBRD region
10
Total Population: 44m
Average 2015/ 2016F
GDP change: 2.9% / 3.3%
EBRD portfolio: €8.2 bn
EBRD Infra portfolio growth
2013-2015: -10%
Total Population: 75m
Average 2015 / 2016F
GDP change: -1.2% / -0.3%
EBRD portfolio: €7.4 bn
EBRD Infra portfolio growth
2013-2015: 21%
Total Population: 12m
Average 2015 / 2016 F GDP
change: -0.1% / 0%
EBRD portfolio: €0.5 bn
EBRD Infra portfolio growth
2013-2015: 326%
EBRD total portfolio and Infra portfolio amounts to €40 billion and €10 billion
Total Population: 146m
Average 2015 / 2016 F GDP
change: -3.7% / -1.2%
EBRD portfolio: NA
EBRD Infra portfolio growth
2013-2015: NA
Sector coverage of EBRD
11
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
Infrastructure sector organisation in EBRD
12
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)
Ekateryna
Miroshnik
NATURAL
RESOURCES
Eric Rasmussen
POWER & ENERGY
UTILITIES
Nandita Parshad
ENERGY & NATURAL
RESOURCES RUSSIA
AND CENTRAL ASIA
Aida Sitdikova
1. EBRD OVERVIEW – EBRD’S MANDATE, CONTEXT AND COUNTRIES OF OPERATIONS;
2. EBRD’S INFRASTRUCTURE INVESTMENTS
3. COLLABORATING WITH PORTUGUESE SPONSORS: OPPORTUNITIES AND TRACK RECORD
4. SEMED AND TURKEY– OPPORTUNITIES AND CHALLENGES
5. PPP MARKET IN EBRD COUNTRIES
6. CASE STUDIES
7. CONTACTS
13
Contents
EBRD Infrastructure Business Group
14
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
15
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 an
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
16
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. EBRD OVERVIEW – EBRD’S MANDATE, CONTEXT AND COUNTRIES OF OPERATIONS;
2. EBRD’S INFRASTRUCTURE INVESTMENTS
3. COLLABORATING WITH PORTUGUESE SPONSORS: OPPORTUNITIES AND TRACK RECORD
4. SEMED AND TURKEY– OPPORTUNITIES AND CHALLENGES
5. PPP MARKET IN EBRD COUNTRIES
6. CASE STUDIES
7. CONTACTS
17
Contents
EBRD financing with Portuguese Companies
18
VALUE OF JOINT PORTUGAL-EBRD INVESTMENT
€2.1 billion As of 31 December 2015
• €0.72billion from Portugal
• €1.6 billion from EBRD
Dominant investment
sectors:
• Financial Institutions:€830m
• Energy: €700 m
• Infrastructure: €360 m
• Industry, Commerce and
Agribusiness: €230 m
Major countries: Poland,
Romania and Hungary
Selected clients: Mota Engil,
EDP, EDP Renovaveis,
Millennium BCP, Frulact,
Logoplaste
Strategic Fit between EBRD and Portuguese construction
firms
19
Mota Engil
MSF
EBRD has financed some of the Portuguese construction companies – Mota Engil (direct)
and MSF (indirect).
POLAND
BULGARIA ROMANIA MOROCCO
Other Portuguese construction companies are also present in the some of the EBRD
Countries of Operation
MOLDOVA
Project
Summary
Poland: Wrocław Parking PPP
Client
SPV supervised by Mota-Engil group, one of the leading construction companies in Europe
EBRD / other Finance
A loan of PLN 31.3 million (equivalent to EUR 8 million)
Use of funds:
Design, construction and operation of an underground parking facilities of 331 places in close proximity to the historical centre of Wroclaw.
EBRD added value/impact
This was the first public-private partnership undertaken by the City of Wroclaw and one of very few PPP projects implemented in Poland. The Project will provide a platform for other projects based on the PPP formula, not only in the parking sector but in other sectors with high visibility and transition impact potential.
28 September, 2016 20
2011 Signed in
Project
Summary
Romania: EDPR Solar
Client
EDP Renovaveis (EDPR). EDPR is a global leader in the renewable energy sector
EBRD / other Finance
EBRD – EUR 20 million loan
BTSB – parallel facility of EUR 10 million
Use of funds:
Construction and operation of six solar photovoltaic (PV) parks totalling 50 MW in southern Romania.
EBRD added value/impact
The investment is supporting Romania to increase its renewable energy capacity and to meet the EU’s renewable energy targets.
28 September, 2016 21
2014 Signed in
Project
Summary
Romania: EDPR Wind Farms (Sarichioi
and Vutcani WPPs)
Client
EDP Renovaveis (“EDPR”), the third largest wind energy producer in the world
EBRD Finance
Up to EUR60 million with an A/B loan structure
Use of proceeds:
Commissioning and operation of Vutcani (24MW) and Sarichioi (33 MW) wind firms, located in the Moldova and Dobrogea regions, respectively
EBRD added value/impact
EBRD financing contributed to increase the generation of renewable energy capacity in Romania meeting EU’s green energy quotas
28 September, 2016 22
2012 Signed in
1. EBRD OVERVIEW – EBRD’S MANDATE, CONTEXT AND COUNTRIES OF OPERATIONS;
2. EBRD’S INFRASTRUCTURE INVESTMENTS
3. COLLABORATING WITH PORTUGUESE SPONSORS: OPPORTUNITIES AND TRACK RECORD
4. NORTH AFRICA AND TURKEY– OPPORTUNITIES AND CHALLENGES
5. PPP MARKET IN EBRD COUNTRIES
6. CASE STUDIES
7. CONTACTS
23
Contents
EBRD Snapshot in North Africa/Jordan
• 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.
24
49% Egypt
27% Morocco
16% Jordan
8% Tunisia
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
EBRD in Turkey (1) Key EBRD figures
26
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
Strong presence through offices in Istanbul, Ankara and Gaziantep
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 (Military coup attempt, 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
1. EBRD OVERVIEW – EBRD’S MANDATE, CONTEXT AND COUNTRIES OF OPERATIONS;
2. EBRD’S INFRASTRUCTURE INVESTMENTS
3. COLLABORATING WITH PORTUGUESE SPONSORS: OPPORTUNITIES AND TRACK RECORD
4. SEMED AND TURKEY– OPPORTUNITIES AND CHALLENGES
5. PPP MARKET IN EBRD COUNTRIES
6. CASE STUDIES
7. CONTACTS
28
Contents
EBRD in Turkey (1) Key EBRD figures
29
The EBRD has been investing in the PPP market since 1993 with EUR 2.8 billion investments
and 46 projects signed
Dominant sectors: Road, Water/Wastewater, Airport, Healthcare
PPP success stories: Turkey, Slovakia
Infrastructure PPP market in EBRD region
EBRD INVESTMENT IN INFRASTRUCTURE PPP MARKET
TOP 5 COUNTRIES/REGIONS OF EBRD INVESTMENT IN
PPP PROJECTS
Note: Cross-regional refer to investments in companies or SPVs which sponsor
various PPP projects in EBRD Countries of Operations
1. EBRD OVERVIEW – EBRD’S MANDATE, CONTEXT AND COUNTRIES OF OPERATIONS;
2. EBRD’S INFRASTRUCTURE INVESTMENTS
3. COLLABORATING WITH PORTUGUESE SPONSORS: OPPORTUNITIES AND TRACK RECORD
4. SEMED AND TURKEY– OPPORTUNITIES AND CHALLENGES
5. PPP MARKET IN EBRD COUNTRIES
6. CASE STUDIES
7. CONTACTS
30
Contents
Project
Summary
28 September, 2016 31
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
28 September, 2016 32
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.
28 September, 2016 33
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.
28 September, 2016 34
2015 Signed in
Project
Summary
28 September, 2016 35
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
36
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
37
Thomas Maier
Managing Director, Infrastructure
Tel: +44 20 7338 7924
Email: MaierT@ebrd.com
Goncalo Correia
Associate Banker, Infrastructure
Tel: +44 20 7338 6175
Email: CorreiaG@ebrd.com
EBRD
One Exchange Square
London, EC2A 2JN
UK
www.ebrd.com
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