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- EAIF- EAIF

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Emerging Africa Infrastructure Fund - EAIF

First dedicated debt fund for sub-Saharan Africa

Size: US$365 million

Original sponsor: UK Government – DFID

3 other European Governments joined (Sweden, Netherland, Swiss)

Debt from three development finance institutions and two private sector

international banks

Public/private sector partnership

Donor aid funds leveraged private sector capital for development

purposes

First multi-donor initiative by Private Infrastructure Development Group

(PIDG)

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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, agribusiness projects

Sub-Saharan Africa focus excluding Mauritius Investment Size:US$10 -36 million, however FMFM can arrange US$ 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 - sample transactions

Project: Ethiopian Airlines Sector: Transport Country: Ethiopia Description and Financing

Parameters:– this is a unique project, EAIF has

committed a US$ 36 million loan to the airline expansion project.

– Ethiopian Airlines is a 100% publicly-owned entity often held up as a model business for other airlines in Africa.

– The EAIF financing is bridging a crucial gap enabling the airline to purchase additional, new aircraft at a cost of US$ 460 million.

Project: AES Sonel Sector: Power Country: Cameroon Description and Financing

Parameters:– EAIF provided a US$ 30 million

medium term loan facility with a 10-year tenor for the construction of a US$ 75 million, 85MW power

– plant.  EAIF's financing bridged an important initial gap enabling the project to move forward, prior to participation from a much larger financing group

– In 2007 a restructuring took place as part of a larger syndicated financing of approximately Euro 300 million from various DFIs. 

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EAIF - sample transactions (contd’)

Project: 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$ 24.5 million of senior and subordinate debt (total debt package of US$270 million) as Senior and Subordinated Lender. The project received deal of year awards from both the Mining Journal and Project Finance International publications.

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

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

– EAIF provided USD 35m debt financing to a special purpose vehicle controlled by Industrial Promotion Services (Kenya) Ltd, one of the sponsors and a subsidiary of the Aga Khan Fund for Economic Development.

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EAIF - deals pipeline

EAIF has a strong diversified pipeline across countries and sectors including among others

– Power projects in Uganda, Kenya and Nigeria

– Manufacturing projects in Kenya, Tanzania and Nigeria

– Mining projects in DRC, Congo and Mozambique

– Transport projects in Kenya, Nigeria and Senegal

– Telecom Projects in Tanzania, Guinea and Pan-African

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GuarantCo

Credit enhancement of local currency debt issuance

by the private, municipal and Parastatal

infrastructure sectors in emerging markets

Covers similar infrastructure sectors to EAIF

Operates globally

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GuarantCo offers

Guarantees covering default risk on underlying debt service

- partial credit guarantees

Guarantees covering default risk due to specific events

- partial risk guarantees

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

carbon credits

Other methods of risk transference e.g. insurance / reinsurance or CDS /

derivatives

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

Acceptance of certain local currency risks

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GuarantCo - sample transactions

Celtel Kenya

Partial Credit Guarantee (75%) of

a $50m equivalent 5 year bond

issue for network expansion. Only

the third commercial bond issued

in Kenya and largest at that time

– Closed Dec 05.

– Refinanced in Feb 07

Celtel Tchad 100% guarantee of $14m equivalent

bank loan. Local lenders, Afriland

First Bank and BDEAC, also lent

$20m equivalent without guarantee

– Closed April 2007

– Network expansion to more

rural areas, which will aid both

local communities and the

significant nomadic population

in Chad

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GuarantCo - deals pipeline

GuarantCo has a strong diversified pipeline across countries and sectors including among others

– bio ethanol project in Central Java– mobile phone mast financing in India– corrugated steel plant financing in Tanzania and Kenya– solid waste management project in Vietnam– toll roads in Nigeria and Kenya– new private sector utility in Uganda– steel plant in India– securitisation of housing micro finance mortgage receivables in

Central and Southern America

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Project Development FacilityProject Development Facility

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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

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Infrastructure projects financed or in the process of financing by FMFM(*)

* In Sub Saharan Africa

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An example of companies we worked and are working with

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Contact details

Orli Arav

DirectorFrontier Markets Funds ManagersT: +44 (0) 20 7815- 2782M: +44 (0) 77254 - 29177E: orli.arav@frontiermarketsfm.com