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BoD IDB Private Sector Presentation 03 16 07

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Information about BoD IDB Private Sector Presentation 03 16 07
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Published on October 22, 2007

Author: Nathaniel

Source: authorstream.com

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Slide1:  Third Annual “Banking on Development” Conference March 16, 2007 – New Orleans, LA Lori Kerr Investment Officer Private Sector Department, IDB Tel: (202) 623-3184 lorik@iadb.org Inter-American Development Bank Slide2:  Inter-American Development Bank IDB is oldest and largest regional development bank PRI created in 1995 to support private sector in LAC with long-term financing options Began operations as a basic infrastructure lender Evolved to include broad variety of products and sectors IDB’s Private Sector Department (PRI) Slide3:  Inter-American Development Bank Support to the Private Sector Lending Activities: Corporate and Project Finance A/B Loan Programme Co-Financing Guarantee Programme: Political Risk Guarantees Partial Credit Guarantees Technical Assistance: Pre-feasibility, feasibility studies, environmental studies, market studies Infrastructure Project Preparation Fund – US$20M available Trust Fund Programme – US$30M in approvals annually Slide4:  Inter-American Development Bank A-Loan (own account): Long-term, direct lending (tenor up to 20 years) Maximum of US$200M (or US$400M in exceptional cases) 25-40% percent of total investment for greenfield projects 50% for expansions and refinancings Market-based terms, conditions, pricing PRI’s Lending Activities B-Loan (market participation): IDB is lead lender and Lender of Record Syndicated loan participations with commercial banks and institutional investors Work with Arranger or Placement Agent Same terms and conditions under A/B Loan structure Advantages for commercial banks Slide5:  Inter-American Development Bank Political Risk Guarantee: Convertibility, transferability, funds expropriation Breach of contract, other political risks 50% of investment, to a maximum of US$200M (or US$400M in exceptional cases) PRI’s Guarantee Programmes Partial Credit Guarantee: Enhancements for bond placements, securitizations, other structured securities Flexible in structure (e.g. comprehensive “wrap”, rolling, selected risk, selected tenor, local currency, USD) Tailored on a case-by-case basis to provide most effective enhancement Maximum of US$200M (or US$400M in exceptional cases) 25-40% percent of total investment for greenfield projects 50% for expansions and refinancings Slide6:  Private Sector Department’s Track Record Inter-American Development Bank Market Coverage: Infrastructure Sectors Agribusiness, Chemicals & Petrochemicals, Manufacturing, Mining, Oil & Gas, Pulp & Paper, Tourism Capital Markets & Trade Finance Portfolio in the Marketplace: Operations in 17 countries and two regional funds 87 transactions closed in the markets US$24.3 billion in investment cost US$4.9 billion in direct financing/guarantees US$3.7 billion in syndicated/placed participations 90+ banks and institutional participants Slide7:  Inter-American Development Bank PanAm Thermal Generating Ltd., Panama 96MW thermal facility resulting from an international bid conducted in 1998 by local distribution company for the supply of power under a 5-year PPA Total Project Cost of US$92M IDB A-Loan of US$23M complemented by B-Loan of US$41.5M IDB provided comfort relating to the recently restructured energy sector with untested regulatory framework Facilitated 12-year financing with commercial bank and institutional investor Case Study – A/B Loan Slide8:  Inter-American Development Bank Light Serviços de Eletricidade, Brazil Bond issuance of electricity distribution company serving Rio de Janeiro for the expansion and upgrade of network (2000-2005) Total 5-year investment programme of US$200M IDB PRG covered US$100M MITI covered US$77M and MIGA covered US$23M Standard PRG coverage facilitated international commercial bank notes purchase, as private insurance was unavailable “2000 Deal of the Year” by Trade Finance magazine Case Study – Political Risk Guarantee Slide9:  Inter-American Development Bank San Pedro de Macoris, Dominican Republic Development, construction and operation of a 300MW combined cycle thermal generating facility under a 20-year PPA with public offtaker Total project costs of US$318M IDB PRG covered up to US$140M of total debt US$238M Standard PRG coverage plus contract frustration coverage facilitated full debt placement with institutional investors and commercial banks Case Study – Political Risk Guarantee Slide10:  Inter-American Development Bank Santiago-Valparaíso-Viña del Mar, Chile 30-yr BOT concession awarded in 1998 to a consortium lead by ACS and Sacyr (Spain) for upgrade, expansion and operation of 109-km inter-urban toll road Total Project Cost of US$450M Local bond issuance of US$300M (USD equivalent) IDB PCG covered US$75M, balance covered by monolines (“full wrap”) PCG improved credit rating of issuance to AAA from BBB- Bond investors included Chilean pension funds and insurance companies Facilitated largest placement and 23-year maturity, longest to-date at the time “2002 LatAm Deal of the Year” by Project Finance International “Transportation Deal of the Year 2002” by Project Finance Magazine Case Study – Partial Credit Guarantee Slide11:  Inter-American Development Bank Two phases in transaction cycle: Detailed due diligence Ongoing administration and monitoring Areas of expertise: Technical • Economic Market • Environmental and Social Financial • Insurance Process of engagement: Request for Proposals Proposal evaluation Consultant selection Consultant Services Agreement Consulting Opportunities Slide12:  Inter-American Development Bank PanAm Thermal Generating Ltd., Panama Due Diligence: Power market study (expansion plan, simulations), environmental and social, economic (cost-benefit analysis), independent engineer, insurance Monitoring: Engineering (semi-annual, annual reporting, site visit) E&S (semi-annual, annual reporting, site visit) Insurance (annual compliance report) Consulting Opportunities Slide13:  Inter-American Development Bank Santiago-Valparaíso y Viña del Mar, Chile Due Diligence: Traffic study (growth, composition, ramp-up, etc.), environmental and social, economic (cost-benefit analysis), independent engineer, insurance Monitoring: Engineering (semi-annual, annual reporting, site visit) E&S (semi-annual, annual reporting, site visit) Insurance (annual compliance report) Consulting Opportunities Slide14:  Inter-American Development Bank Apply to PRI’s on-line Consultant Database at: http://IADB.org/pri. Consulting Opportunities Slide15:  Lori Kerr Investment Officer, IDB Private Sector Department Tel: (202) 623-3184 Fax: (202) 623-3837 lorik@iadb.org Inter-American Development Bank

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