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Infrastructure
CapitalMarket
IDB
Fin
an
cin
g S
olu
tio
ns
Development
Mobilizing Investment
Kelle Bevine – IDB/Private Sector Dept. October 26, 2006
IDB: Financing with the Private Sector
Coverage: Project Finance Corporate Finance Capital Markets Trade Finance
Presence in the Market: Operations in 15 countries & a regional fund 71 projects closed in financial markets US$17.8 billion of new investments US$2.7 billion of direct financing US$2.9 billion of commercial participations More than 80 banks and institutional investors
Date of Creation: 1995
IDB has achieved highly catalytic results
IDB Approved amount$4,935 million
Total Project Costs$26,183 million
IDB Approved Amounts and Total Project Costs (cumulative 1995-2006)
Mobilization ratio of total project cost is 5.3 times amount of IDB participation
B u i l d i n g p h y s i c a l & fi n a n c i a l i n f r a s t r u c t u r e t o i n c r e a s e t h e r e g i o n ’ s c o m p e t i t i v e n e s s & j o b c r e a t i o n – e x a m p l e s o f t a n g i b l e r e s u l t s f r o m I D B p r i v a t e s e c t o r p o r t f o l i o
I D B T r a c k R e c o r d
E l e c t r i c i t y g e n e r a t i o n 2 3 1 0 , 3 0 0 M W 6 0 m i l l i o n b e n e f i c i a r i e s $ 6 . 6 0
t r a n s m i s s i o n 1 3 1 1 4 , 0 0 0 k m 9 8 , 0 0 0 M W i n c r e a s e d c a p a c i t y $ 3 . 7 0
T r a n s p o r t a t i o n t o l l r o a d s 1 0 9 7 1 k m 1 0 % r e d u c t i o n i n a c c i d e n t s $ 2 . 7 0
W a t e r & S a n i t a t i o n
d i s t r i b u t i o n 43 0 0 , 0 0 0 n e w
c o n n e c t i o n so v e r 1 m i l l i o n b e n e f i c i a r i e s $ 0 . 7 0
C a p i t a l M a r k e t s h o u s i n g 6u p t o 1 m i l l i o n
n e w m o r t g a g e so v e r 4 m i l l i o n b e n e f i c i a r i e s $ 1 . 5 0
S e c t o rS u b -s e c t o r
# o f p r o j e c t s O u t p u t O u t c o m e
T o t a l p r o j e c t c o s t
IDB’s New Business Model adopted in 2006 Non-Sovereign Guaranteed Operations:
Expanding IDB impact in the region:
New clients: state-owned-enterprises, financial institutions, sub-national /municipal entities, & PPPs are now eligible for IDB financing
Expanded Sectors: all sectors now eligible for IDB financing
New Products: refinancing and local currency guarantees
Increased Lending Limits: up to US$200 million/US$400 million*
Streamlined Procedures for improved response capacity
IDB Financing: Products & Parameters
Financial Products:
Syndicated A/B Loan Facilities
Political Risk Guarantees
Local Currency Financial Guarantees
Local Currency Financing options
Financing Parameters:
Project Finance, Corporate Finance, Structured Finance & Trade Finance solutions
New projects, capital expansions and re-financing all eligible
Financing up to 25-40% of total cost for Greenfield transactions
Financing up to 50% in expansions and re-financing
Project limits at US$200 million or US$400 million/exceptional basis
Tenors up to 20+ years
Market-based pricing
PRIVATE SECTOR DEPARTMENTINTER-AMERICAN DEVELOPMENT BANK
P R
O D
U C
T S
A
N D
S
E R
V I C
E S
Local Currency Financial Guarantees, typically without recourse to the originator, for:
Mortgage-backed securitizations (MBS), for both residential and commercial mortgages
Future flow securitizations for credit card receivables, trade receivables, etc.
Warehousing facilities for accumulation of receivables (e.g. construction loans)
Structured FinanceStructured Finance
Direct Credit and/or Local Currency Financial Guarantees for on-balance sheet financing via banking and/or bond markets by corporations, financial institutions, or utilities. Structures include issues of secured and unsecured senior and/or subordinated debt
Corporate FinanceCorporate Finance
Direct Credit and/or Local Currency Financial Guarantees for limited recourse off-balance sheet financing via banking and/or bond markets by special purpose companies. Private, Public and Mixed Ownership (PPP) utility companies and project sponsors
Project FinanceProject Finance
Investment FundsInvestment Funds
Trade Finance Facilities (TFFs)Trade Finance Facilities (TFFs)
Unsecured loans to leading financial institutions, for on-lending to importers and exporters. Facilities mobilize commercial bank funding through B-loan participation
First generation of deals focused on largest banks in Brazil; second generation is expanding to smaller banks throughout the region
Debt Financing for private equity funds and real estate investment trusts (REITs)
Debt Financing for investment funds for infrastructure, education, export-based businesses, etc.
IDB Focus: Client Driven Financial Solutions
IDB Financing: Questions & Answers
Questions Raised during July 13, 2006 meeting:
Can IDB provide re-insurance to national development banks?
Can IDB assist in attracting monoline insurers to companies in Latin America?
Additional questions