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EBRD: Financing opportunities for Natural Resources projects in Central AsiaMINEX Central Asia 2015, Astana, Kazakhstan19 March 2015
2
Agenda
• What is EBRD• EBRD in Central Asia• Energy and Natural Resources, Russia and Central Asia
team• EBRD goals• The New Subsoil Use Code• EBRD products and approval process
3
EBRD in numbers
0
25
50
75
100
0
2
4
6
8
10
12
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014*
Ne
t cum
ulati
ve b
usin
ess vo
lum
eAn
nu
al
bu
sin
ess
vo
lum
e (
AB
V)
Debt ABV Equity ABV Net Cumulative Business Volume
• €95bn invested since 1991
• 4,188 projects
• €38,7bn portfolio in 2014
• 85% debt and 10% equity and guarantee 5%
• 70% of portfolio in the private sector in 2014
• €8.6bn invested in 2014
• 377 projects signed in 2014
• AAA/Aaa rated institution
EBRD goalsERCA teamEBRD in Central Asia
What is EBRD
Subsoil Use Code
Project Support Instruments
Contacts
4
Where do we operate?
38 offices and 34 countries. Half of banking team in the region.
EBRD goalsERCA teamEBRD in Central Asia
What is EBRD
Subsoil Use Code
Project Support Instruments
Contacts
© European Bank for Reconstruction and Development 5
Present in Central Asia since 1993
EBRD goalsERCA teamEBRD in Central Asia
What is EBRD
Subsoil Use Code
Project Support Instruments
Contacts
Presence on the ground 6 offices
Number of projects to date 547
Net cumulative Bank investment €9,178*m
Portfolio€3,263*m
Operating assets€2,248*m
Private share of portfolio 59%
Number of projects in 201471
Annual Bank Investment in 2014 €803*m
* data for January 2015
Portfolio Composition
Annual Bank Investment & Operations
ERCA: Dedicated sector approach and multidisciplinary teams
EBRD goalsERCA teamEBRD in Central Asia
What is EBRD
Subsoil Use Code
Project Support Instruments
Contacts
Mining & Services
Our Team
• 11 professional bankers focused on Russia and Central Asia Permanent presence in: Almaty, Astana, London, Moscow
• Technical expertise through in-house engineers Power, petroleum, downstream, mining engineers
Key sectors
O&G extraction, transportation, refining
Power
• Support of the private sector and transition to market economy
• Environmental and Social Policy plays a crucial role (IED, BAT)
• Energy, Resource and Material Efficiency, helping companies to advance on the cost curves
• Supporting transparency in the sector (e.g. EITI, PWYP)
• Attraction of other lenders and third party finance
• Regulatory best practices
• Long-term agenda to reduce GHG emissions through market based mechanisms, Gas Flaring Reduction
EBRD goals
EBRD goalsERCA teamEBRD in Central Asia
What is EBRD
Subsoil Use Code
Project Support Instruments
Contacts
The New Subsoil Use Code
8
The Bank is engaged with the Government, industry associations and companies to develop a new Subsoil Use Code. The new Subsoil Code will regulate all operations covering exploration and production activities for oil, gas, metals and commonly occurring mineral resources.
• Ministerial Working Group. The Bank invited as a participant to focus on:
− Preparation of the plan for transfer from the Soviet GKZ reserves and resources evaluation standards to internationally recognised standards;
− Improvement of HSE regulations in subsoil use;
− Improvement of administration of the subsoil use contract and decreasing the level of Government regulation in the subsoil sector.
• What would help to make projects bankable:
− Guaranteed transition from exploration into production stage
− Subsoil users shall have more freedom in making investment and engineering decisions when the Government would focus on HSE and social aspects of the project
− Introduction of international standards, including reserve and resources evaluation standards
− Possibility to pledge subsoil use contract to banks
− Tax incentives to early stage prospecting or exploration projects
EBRD goalsERCA teamEBRD in Central Asia
What is EBRD
Subsoil Use Code
Project Support Instruments
Contacts
Market conditions and trends in financing
This type of investment project is very rare in the current market conditions and availability of investments
New asset development
EBRD goalsERCA teamEBRD in Central Asia
What is EBRD
Subsoil Use Code
Project Support Instruments
Contacts
01/01/10 01/04/11 01/07/12 01/10/13 01/01/150
2,000
4,000
6,000
8,000
10,000
12,000
0
50
100
150
200
Copper Brent Iron Ore
01/01/10 01/04/11 01/07/12 01/10/13 01/01/150
500
1,000
1,500
2,000
0
10
20
30
40
50
60
Gold Silver
Price dynamics of certain commodities
The companies are interested in improvements of existing assets to reduce cost base (cost curve) and increase efficiency of operations: investments in new mining equipment; energy efficiency and increased production efficiencies at processing and metallurgical stages, EHS aspects, etc.
Modernisation and improvements of an
existing asset
EBRD Product Flexibility and Approval process
10
Loans• Project-based financing to
public or privately-owned companies and concessionaries
• Senior, subordinated, convertible
• LT (up to 10 years or more) or ST revolving
• Floating / Fixed rates.
• Choice of currencies (€, $, KZT)
• Possibility to structure A/B financings and syndicate to market
Equity• Common stock or preferred
• Minority position only(up to 35%)
• Mezzanine
Other
• Partial guarantees
• Currency swaps
• Bonds
• TCs and facilities
Concept Review
Structure Review
FinalReview
Board Approval
Signature
Due DiligenceTechnical/Commercial feasibility
Final negotiation
Approval Process
EBRD goalsERCA teamEBRD in Central Asia
What is EBRD
Subsoil Use Code
Project Support Instruments
Contacts
Contacts
21
For all further enquiries, please contact:
Aida SitdikovaDirectorEnergy & Natural ResourcesRussia & Central AsiaTel: +7 495 787 1111 (ext. 103)Email: [email protected]
Yerlan RamazanovPrincipal BankerEnergy & Natural ResourcesRussia & Central Asia+7 7172 580 204 (ext. 113)Email: [email protected]
EBRD, One Exchange SquareLondon, EC2A 2JN United Kingdomwww.ebrd.com
EBRD goalsERCA teamEBRD in Central Asia
What is EBRD
Subsoil Use Code
Project Support Instruments
Contacts