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1 Frontier Markets Fund Managers US$ 944 million committed to 52 projects Roland Janssens, Director

Frontier Markets Fund Managers

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Page 1: Frontier Markets Fund Managers

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Frontier Markets Fund Managers US$ 944 million committed to 52 projects

Roland Janssens, Director

Page 2: Frontier Markets Fund Managers

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Frontier Markets Fund Managers- FMFM

FMFM is the fund manager of Emerging Africa Infrastructure Fund (EAIF); and

GuarantCo

The fund manager is owned by Standard Bank (70%), FMO (18%) and EMP

(12%)

The fund management team is based in London

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EAIF & GuarantCo are part of the Private Infrastructure Development Group – PIDG

UK; SWEDEN; NETHERLANDS; SWITZERLAND; GERMANY; AUSTRIA; IRELAND; WBG

PIDG Trust

EAIF GurantCo ICF TAF InfraCo DevCo

provides funding along side

EAIF & GurantCo

EAIF & GuarantCo can finance projects

developed by

InfraCo & DevCo

Management agreement with

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Emerging Africa Infrastructure Fund - EAIF

First dedicated debt fund for sub-Saharan Africa (started in Jan.2002; 10 years old)

Current Size: US$ 710m

Shareholders: 4 European Governments (UK, Netherlands, Switzerland and

Sweden) - US$ 160m

Equity leveraged through a combination of Senior and Subordinated Debt from 7

DFIs (FMO, DBSA, KFW, DEG, IFC, AfDB and OeEB) and 2 commercial banks

(Standard Bank SA and Barclays)

Approval process takes between 8-12 weeks from the in principle approval to

Board approval

Operates on commercial basis

Financed 38 projects to date with a total exposure of US$ 758m

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EAIF – investment policy

Lend to private sector owned, managed and controlled entities with infrastructure sector focus Power Transport Telecoms Water Manufacturers of components of infrastructure e.g. cement Infrastructure within mining and agribusiness projects

Sub-Saharan Africa focus excluding Mauritius Investment Size:US$10 – US$30 million FMFM can arrange US$200 million and more through its financing partners Tenor: up to 15 years Instruments: Senior and Mezzanine Debt (possibly with equity features) Does not require a Political Risk Insurance (PRI)

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EAIF’s Portfolio is Spread Over 7 Sectors & 15 Countries

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EAIF - selected transactions

Rabai Sector: Power Country: Kenya Description and Financing Parameters:

EAIF was the lead arranger of Euro85 million facility for the Rabai Power Project in Kenya, developed by Aldwych International together with BWSC

Debt package comprised of a Senior and Subordinated Debt. Lender Group included, FMO, Proparco, DEG and EAIF

The project received Africa power deal of the year awards from Project Finance International and Project Finance magazine

African Foundries Limited - PARCO Sector: Industrial goods Country: Nigeria Description and Financing Parameters:

EAIF committed US$ 20m of senior debt to African Foundries Limited, Nigeria The Debt package comprised of: (i) a 7¼-year DFI tranche, (ii) a 3 year Comercial Banks tranche

and a working capital facility form Nigeria banks The plant would be the only Nigerian facility with the capability to produce TMT rebars

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EAIF - selected transactions (continued)

Seacom Sector: Telecom Country: Pan African Description and Financing Parameters:

The US$600m Seacom project is the first undersea fiber optic cable project along the east coast of Africa, the only region in the world not currently served by such an infrastructure

EAIF provided US$36.5m debt financing to a special purpose vehicle controlled by Industrial Promotion Services (Kenya), one of the sponsors and a subsidiary of the Aga Khan Fund for Economic Development

The project received deal of the year award from Project Finance International

MOMA Sector: Mining Country: Mozambique Description and Financing Parameters:

The developers of this titanium mineral sands project approached EAIF as a ‘lender of last resort’.

Located in one of the most under-developed regions of Mozambique, the US$413 million project is the second lowest cost producer of titanium in the world

EAIF committed US$36.5 million of senior and subordinate debt (total debt package of US$270 million)

The project received deal of the year awards from both the Mining Journal and Project Finance International publications

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Pipeline: 26 additional NBC approve projects US$488 m exposure

Sector Number Amount

of Projects US$ m

Agribusiness 4 72.5

Power 8 161.2

Telecoms 3 32.1

Transport 2 47.5

Water 1 28.3

Waste 1 20.0

Gas 2 21.0

Manufacturing 3 60.0

Mining 2 45.0

Total 26 487.6

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Projects financed or in the process of financing by EAIF

Page 11: Frontier Markets Fund Managers

EAIF Summary of transactions (2003-2008)

1139

Oct 2004

MOMAGBP 594 million

Construction and operation of a Greenfield mineral sands project (ilmenite, rutile, zircon)

near Moma, northern Mozambique

US$ 5m - Senior Debt US$ 24.5m - Mezz. Facility

Jan 2003

MSI-Cellular / CeltelUS$ 260 million

Expansion of a GSM network across selected countries in Arica

US$ 30m Mezzanine debt facility

Feb 2007

Eleme PetrochemicalsUS$ 400 million

Financing of a post privatisation turnaround program for a petrochemical plant in Nigeria

US$ 20m Senior Debt facility

February 2007

Celtel NigeriaUS$ 190 million

Corporate facility for the expansion of Celltels GSM network in Nigeria

US$ 35mSenior Debt Facility

June 2007

Celtel AfricaUS$ 320 million

Corporate facility for expansion of GSM network in 5 African countries

US$ 24mSenior Debt Facility

Nov 2007

SeacomUS$ 600 million

Debt financing for equity participation of IPS Kenya (AKFED) in Seacom, the first submarine

fibre optics cable along the eastern coast of Africa

US$ 36.5m lender to IPS CSH for Seacom equity

Jan 2008

Orpower 4US$ 180 million

Expansion of the Olkaria III Geothermal power project to 48 MW

US$ 15m Senior Debt Facility

Mar 2008

Safal InvestmentsUS$ 211 million

Construction of a 13 MW run of river hydro power plant in Uganda

US$ 15m - Senior DebtUS$ 14m - Sub Debt

May 2008

Tronder PowerUS$ 56 million

Construction of a 13 MW run of river hydro power plant in Uganda

US$ 35m Senior DebtUnderwriter and Arranger

Sept 2008

Rabai Power ProjectEUR 120 million

Construction of a 90 MW HFO fired power plant in Kenya

EUR 22.5m Arranger –Senior Debt Facility

September 2008

SAEMSUS$ 85 million

US$ 14m Senior Debt Facility

Corporate facility for a portfolio of 12 small hydro power plants in Sri Lanka and Uganda

Aug 2003

AES SonelEUR 240 million

Construction of an 85 MW HFO fired power plant in Cameroon; in 2006 the facility was

increased to EUR 240 million and EAIF acted as a co-lender

EUR 24m Arranger –Senior Debt Facility

Nov 2004

MTN NigeriaUS$ 200 million

Corporate facility for the expansion of MTN’s GSM network in Nigeria

US$ 10mSenior Debt Facility

September 2005

Obajana CementUS$ 798 million

Construction and commissioning of a greenfield cement production plant with a capacity of 4.4 million tons per annum in

Nigeria

US$ 30m Senior Debt Facility

Nov 2004

SPM GhanaUS$ 47.3 million

Financing of a Single Point Mooring system and a conventional buoy mooring system in

the waters outside Tema Port, Ghana

US$ 12m Senior Debt Facility

Page 12: Frontier Markets Fund Managers

EAIF Summary of transactions (2009-2011)

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July 2010

ALAF LimitedUS$ 35 million

Construction of a Metal Coating and Roofing facility in Tanzania

US$ 5mSenior Debt Facility

October 2010

Tema Osonor Power LtdUS$ 128 million

Construction of a 126MW gas-fired power plant in Tema, Ghana

US$ 15mCo-Arranger –Senior Debt Facility

November 2010

DPW Dakar EUR 216 million

Upgrade & expansion of the container terminal in the Port of Dakar, Senegal

EUR 12.5mSenior Debt Facility

November 2010

O3b NetworksUS$ 1.2 billion

Orbit Satellites and ground facilities to deliver fibre quality broad band

communications services to emerging markets

US$ 12.5m Senior Debt US$ 12.5m Sub Debt

December 2009

African Foundries LimitedUS$ 130 million

Construction of a 150MT p/a rolling mill that will produce TMT Rebars, Nigeria

US$ 20mSenior Debt Facility

African Foundries Limited

December 2009

Helios Towers NigeriaUS$ 250 million

Corporate facility for the expansion of Helios’ tower network in Nigeria

US$ 19mSenior Debt Facility

October 2009

Bisha Mining Share CompanyUS$ 460 million

Construction and operation of the first modern mine in Eritrea mining gold and

copper in Eritrea

US$ 25m Mezzanine debt

June 2009

Zain GhanaUS$ 523 million

Construction and operation of a greenfield mobile network in Ghana

US$ 17.5m Senior Debt Facility – B Loan

Jan 2009

SPA MaghrebUS$ 24 million

Construction of green field steel pipe manufacturing company in Algeria

US$ 17mSenior Debt Facility

February 2009

Aldwych InternationalGBP 44 million

Round B equity and high yield debt financing for start up power plant developer Aldwych

International

EUR 6m - Senior debtUS$$ 1m - Equity

June 2011

Tower Power Abeokuta LtdUS$ 21.3 million

Constriction of Greenfield 12.5MW gas fired combined cycle power plant in Nigeria

US$ 15m Arranger –Senior Debt Facility

June 2011

Addax BioenergyEUR 267 million

The development of a 10,000ha sugarcane plantation, an ethanol distillery producing 82,000 m3 of ethanol p.a. and a 32MW

cogeneration power plant in Sierra Leone

EUR 20m Co-Arranger –Senior Debt Facility

US$ 25mCo-Arranger –Senior Debt Facility

August 2011

KivuWatt LtdUS$ 140 million

The development of an Integrated Methane Gas to Power Project in Rwanda utilizing

Lake Kivu’s unique methane gas resources. The project will consist of a Gas Extraction

Facility plus a 25MW power plant

December 2011

Helios Towers TanzaniaUS$ 85 million

Acquisition of >1000 telecom towers from Millicom Tanzania Ltd. Debt facility for

refurbisment and expansion of the tower network

US$ 15mSenior Debt Facility

December 2011

Kalangala InfrastructureUS$ 54 million

Development of road, ferry, water supply and power services for Kalangala District in

Uganda

US$ 7mSenior Debt Facility

Page 13: Frontier Markets Fund Managers

EAIF Summary of transactions (2012-)

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January 2012

SAEMS IIUS$ 30 million

Increase of the corporate facility to facilitate the development of SAEMS’s 2nd hydro

power project in Uganda

US$ 6mSenior Debt Facility

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GuarantCo

GuarantCo’s business is:

“Credit enhancement of local currency debt issuance by the private, municipal and parastatal infrastructure sectors in lower income countries”

In addition to enabling infrastructure this approach also builds sustainable financing capacity in domestic capital markets through partnering with local institutions and introducing new approaches to project risk evaluation and financing

Initial capital of US$100m leveraged to US$200m by KFW and Barclays Additional backing from KfW / Barclays up to total of US$400m Covers similar infrastructure sectors to EAIF plus urban infrastructure Can include refinancing to local currency Operates globally

Financed 14 projects to date with a total exposure of US$ 185.5m

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GuarantCo offers

Partial credit guarantee covering default risk on a portion of a loan or bond - generally on demand and unconditional

Partial risk guarantee covering default risk due to specific events - such construction failure or revenue shortfall

Cover for senior, mezzanine or sub debt; maturity, coupon or principal strips; Loans, bonds or securitisation

Other methods of risk transference considered (e.g. insurance / reinsurance or CDS / derivatives)

Preference for risk sharing - defined on a case-by-case basis

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Case Study – Tower Aluminium Limited

Tower Aluminium Group Limited (“Tower”), the largest manufacturer of aluminium roofing in West Africa

In late 2008 the Naira devalued by c 25% against the USD. Tower’s revenues are mostly in Naira and the impact of the devaluation was to significantly increase the cost of servicing its USD financial liabilities.

Tower decided to refinance its USD liabilities by issuing a 7 year Naira denominated corporate bond.

Tower was however unable to secure the “A” local rating required to be able to access local pension funds. GuarantCo was able to use its local AAA rating in Nigeria to credit enhance Tower’s bond issue.

This was the first time such a structure had been used in Nigeria. GuarantCo’s support also stretched the tenor to 7 years from the typical 5 years for previous

corporate bonds. Following a request for assistance, GuarantCo is also working with the Nigerian Securities &

Exchange Commission to set up training and mentoring of their staff.

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GuarantCo - Summary of transactions (2005-2009)

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GuarantCo - Summary of transactions (2010-2011)

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Potential Transactions

Up to $15m partial guarantee for an integrated wood fuel manufacturing and power

generation project in Liberia

Guarantee of Thai Baht financing for biogas projects in Mekong region

Partial guarantee of $7m finance for a new private sector utility on Bugala Island,

Uganda

$17m partial guarantee for a new factory producing steel pipes for the water sector

in Algeria

Partial guarantee of a $22m broadband backbone service financing in Niger

$20m partial guarantee for a 128km gas pipeline in Nigeria

Credit enhancement of a $13m programme for financing sub-national providers of

water and waste water services in Kenya

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Through PIDG we can provide grant funding to new projects

The grant funding supports the following activities

Infrastructure Development Strategies: Studies intended to support go/no decision for new projects

Environmental Studies: Studies intended to support the Project’s environmental aspects

Pioneering or Pilot Transactions: Support to the design and implementation of particular projects or transactions such as feasibility

studies Capacity Building:

Activities aimed at policy development and initial legal work

Page 21: Frontier Markets Fund Managers

Contact details

Roland JanssensDirectorFrontier Markets Fund Managers (FMFM)

Add: 20 Gresham Street, London, EC2V 7JETel: +44 203 145 8611Mob: +44 7825 504 290Mail: [email protected]

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www.frontiermarketsfm.com www.emergingafricafund.com www.guarantco.com