IFC in Sub-Saharan Africa FKI-IMF Conference November 07, 2013

Transcription

1 IFC in Sub-Saharan Africa FKI-IMF Conference November 07, 2013

2 IFC and the World Bank Group IBRD International Bank for Reconstruction and Development IDA International Development Association IFC International Finance Corporation MIGA Multilateral Investment and Guarantee Agency Est Est Est Est Role To promote institutional, legal and regulatory reform To promote institutional, legal and regulatory reform To promote private sector development To reduce political investment risk Clients Governments of member countries with per capita income between $1,025 and $6,055 Governments of poorest countries with per capita income of less than $1,025 Private companies in 182 member countries Foreign investors in member countries Products Technical Assistance Loans Policy Advice Technical Assistance Interest Free Loans Policy Advice Equity / Quasi-Equity Long-term Loans Risk Management Advisory Services Political Risk Insurance IFC is the private sector arm of the WBG Multilateral with a Private Sector Focus 2

3 IFC: Over $97 Billion Invested Since 1956 Largest multilateral source of loan/equity financing for the emerging markets private sector Founded in 1956 with 184 member countries AAA-rated by S&P and Moody s Equity, quasi-equity, loans, risk management and local currency products Takes market risk with no sovereign guarantees Promoter of environmental, social, and corporate governance standards Resources and know-how of a global development bank with the flexibility of a merchant bank Holds equity in over 756 companies worldwide, 185 of which are funds 3

4 IFC Committed Portfolio by Region, FY13 Total Portfolio: $49.6 Billion, of which $7.4 Billion in SSA Middle East & North Africa 12% South Asia 11% Global 1% Sub-Saharan Africa 16% East Asia & the Pacific 16% Europe & Central Asia 22% IFC s Own Account, as of June 30, 2013 Latin America & the Caribbean 22% 4

5 IFC s Three Businesses IFC Investment Services IFC Advisory Services IFC Asset Management Company Loans Equity Other forms of financing Resource Mobilization Advice Problem-solving Training Wholly owned subsidiary of IFC Private equity fund manager Invests third-party capital alongside IFC 5

6 IFC s Three Industry Groups Principal Areas of Focus Cross-cutting Themes Infrastructure (INR) Physical Infra Power, Transport, Water, Utilities, Extractives, TMT, Oil & Gas Social Infra Health, Education, Agri Infra Manufacturing Agri & Services (MAS) Primary production Processing Food Retail Refinery/ Petrochemicals Investment Climate Fragile & Poor IDA Countries Infra funds Financial Markets (FM) Inclusiveness Access to Finance Farmers, Micro, SMEs, Insurance, Housing, Mobile Solutions Capital Market Development Climate Change & Standards South-South Partnerships &Regional Projects/Programs

7 with proximity to our clients Rabat Algiers Tunis Mediterranean Sea Beirut Jerusalem Cairo Amman Dubai Dakar Infra Conakry Bamako Freetown Monrovia Abidjan ATLANTIC OCEAN Ouagadougou N Djamena Abuja Lagos Accra Douala Bangui Juba Kigali Kinshasa Bujumbura Lusaka Nairobi Sana a Addis Ababa AGRI/M&S Dar es-salaam INDIAN OCEAN IFC Hub Offices IFC Country Offices Johannesburg A2F Antananarivo Maputo 7

8 Africa Committed Portfolio Committed by Industry Group Committed by Product Risk MGT 1% FM 38% INR 35% Equity 22% Guaranty 12% MAS 27% Quasi Equity 1% Quasi Loan 12% Loan 52% IFC s Own Account, as of June 30,

9 Africa Region Nigeria South Africa Ghana Kenya Uganda Guinea Cote D'Ivoire Cameroon Mauritania Togo Mozambique Mauritius Tanzania Eastern Africa Region Senegal Angola Zambia Western Africa Region Ethiopia Rwanda Southern Africa Region Mali Chad Madagascar Malawi Benin Botswana Burkina Faso Seychelles Congo, Democratic Republic of Liberia Central Africa Region Burundi Gambia, The Namibia South Sudan Sierra Leone Congo, Republic of Central African Republic Swaziland Niger Zimbabwe Sudan ,461 1,334 Africa Committed Portfolio (cont d) Committed by Country (US$ m) 1,600 1,400 1,200 1, IFC s Own Account, as of June 30,

10 Opportunities 10

11 Strong macroeconomic trends set to continue Robust growth Lower inflation FDI ex. RSA at new peak 6 5 Real Growth in GDP Annual Average % change Inflation Annual Average % change FDI Inflows into SSA ex. RSA US$ billion

12 yet major challenges remain to be resolved Infrastructure Gap Africa Infrastructure Spending Needs vs Estimate ($ billion, annual) Soaring Food Demand 0 ICT Irrigation Power Transport Water and Sewage Spending Estimates - Public Total Needs (Capex + Maintainance) Total Spending Estimates - Private Low Access to Finance Fragile States; Weak Private Sector Widening poverty gap between conflict affected and other countries Countries with major violence Countries with minor violence Countries with negligible or no violence Source: WDR calculations based on Chen, Ravallion, and Sangraula 2008 poverty data

13 Track record 13

14 Some key clients By Sectors Power Transport vuela Renewable Energy Utilities and Gas 14

15 New Global Sponsors Expected to be Key Players in Emerging Markets Power Emerging markets countries are originating significant global players Global Sponsor Home Country Selected International Countries of Operation Total Assets (US$bn) China Laos, Nepal, Pakistan, Sudan, Mozambique $62 Brazil Argentina, Nicaragua, Uruguay $64 Russia Armenia, Georgia, Kazakhstan, Lithuania, Moldova, Turkey $16 China Brazil, Cambodia, Indonesia, Vietnam $375 India Indonesia, Mauritius, South Africa, Vietnam 1 $78 1 Source: Company filings and websites, GlobalData 1 Countries based on Tata Power operations. Total assets represent assets for Tata Group. 15

16 Our projects: a snapshot Africa Cameroon Côte d Ivoire Senegal Kenya South Africa Abengoa Khi Solar One Uganda KPDC A Loan: 64 million Parallel loans: 70 million Mandated Lead Arranger December 2011 Azito Phase 3 A Loan: $125 million Parallel loans: $220 million Lender October 2012 Comasel Louga Equity: $800,000 Shareholder June 2011 Thika Power A Loan: 28 million Parallel loans: 56 million Lender May 2012 A Loan: $57 million C Loan: $12 million Parallel loans:$220 million Blended Finance:$15 million Mandated Lead Arranger November 2012 Umeme Ltd A Loan:$25 million Equity:$10 million Lender/Shareholder June 2009 November 2012 Rwanda Kenya Togo Kenya Senegal Africa Region Lake Kivu IV Equity: $4 million KPLC A Loan:$50 million Lome Container Terminal A Loan: 85 million Parallel loans: 170 million Kenya Airways Equity:$24 million Dakar Toll Road A Loan: 10 million C Loan: 11 million Parallel loans: 40 million AKFED Aviation A loan $25 million Corporate Loan Shareholder November 2009 Lender August 2012 Lender June 2011 Shareholder April 2012 Lender November 2010 Lender March 2010 Mix of global sponsors and regional / local leading companies; Senior debt, subordinated debt and equity. 16

17 Case Study 17

18 Dakar-Diamniadio Toll Road Project Description A 30-year develop, build, finance and operate concession of a 25 km toll road from Dakar to Diamniadio Sponsor: Eiffage Total Project Cost: EUR230 m Closing: November 15, 2010 IFC Role: Global Coordinator & lead financier Tranche Product Amount Tenor A Loan C Loan Senior Debt IFC s Account Subordinated Debt IFC s Account EUR12.5 million EUR10 million 15 years 15 years Co-financiers Parallel loans Senior loans EUR37.5 million years 18

19 IFC Added Value 1) Making the Cash Flow Work : (i) Long Tenor Senior Debt Tranche (15 years); and (ii) 15-y Subordinated Loan with a 10-year grace period 2) Strengthening the Concession Contract 3) Dealing with traffic risk 4) Dealing with Environmental & Social Issues ( 30,000 people to relocate) 5) Identifying and fixing issues specific to the local context based on past experience 6) Creating a momentum, fixing issues and reaching closing under a tight time schedule Completed in eight months door-to-door: a record for such a complex, first of its kind deal Feb 10 April 10 July 10 September/November 10 Initial Discussion Management Committee Approval Mandate Letter Appraisal Negotiations Credit Approval Legal Documentation Board Approval Financial Closure Commitment 19

20 Contour Global Togo Project Description Project: a 100 MW tri-fuel (Heavy Fuel Oil/Gas/Diesel) thermal power plant on a 25-year Build Own Operate Transfer concession Total Project Cost: $190 million Closing: March 31, 2010 IFC Role: subordinated lender and shareholder Co-financier: OPIC IFC s Value Addition: 1) Engaging the Government of Togo on the broader Togolese electricity sector jointly with the World Bank and other Development Finance Institutions 2) Leading structuring and negotiations 3) Making the cashflows work by providing a mix of equity and subordinated debt Co-financier 20

21 TAV Tunisia Project Description Build a new airport at Enfidha, with an initial capacity of 7 mmpa, rehabilitate the existing airport at Monastir (3.5 mmpa capacity) and operate both under a 40-year concession Total Project Cost: EUR560 million Closing: April 24, 2008 Tranche Product Amount Tenor A Loan Senior Debt IFC s Account EUR105 million 20 years B Loan Senior Debt Syndicated * EUR265 million 14 years Airports in North EastTunisia C Loan Subordinated Debt IFC s Account EUR30 million 20 years * Mandated Lead Arranger: ABN AMRO, SOCIETE GENERALE, STANDARD BANK Existing airport at Monastir 21

22 IFC Added Value 1) Making the Cash Flow Work : (i) Very Long Senior Debt Tranche; and (ii) Subordinated Loan with a 15-year grace period 2) Strengthening the Concession Contract 3) Mitigating country related/political risk 4) Creating a momentum, fixing issues and reaching closing under a tight time schedule Completed in three months: Feb 08 Mars 08 April 08 April May 08 Initial Discussion Management Committee Approval Mandate Letter Appraisal Negotiations Credit Approval Legal Documentation IFC Board Approval Financial Closure Commitment and First Disbursement 22

23 New Product that may be attractive to Korean Industrial players 23

24 IFC s Innovate Corporate Facilities Products Help to Meet Emerging Markets Financing Needs During Uncertainty IFC offers a broad range of corporate-style financial products that are not limited-recourse or projectspecific financing/ project-finance loans Illustrative Examples of IFC Corporate Facilities Fund Projects Corporate Loan Mezzanine Loan The Borrower is an Operating Parent Company, i.e. an operating entity with robust operating revenue/cash-flow on an un-consolidated/stand-alone basis. The loan proceeds are to fund its projects directly or to on-lent to or invest in its product subsidiaries respectively as shareholder s loan or equity. The Borrower is a holding company whose revenues are solely from dividend distributions from its subsidiaries. The loan proceeds are to be on-lent to or invest in its project subsidiaries as shareholder s loan or equity respectively to fund their projects which will be project-financed. The loan may or may not be supported by the Parent Guarantee. IFC Corporate Facilities Hybrid Portfolio Loan The Co-Borrowers are (a) the Holding Company to be either in existence or created for undertaking a portfolio of projects through its project subsidiaries and (b) the project subsidiaries. To be supplemented by a Parent Guarantee which will be phased out as each project reaches Project/Financial Completion. Fund Working Capital, Bonds, etc. Medium-term Loan Risk Sharing Facilities The Borrower can be either the Operating Parent Company or the Holding Company, whose assets are primarily in the emerging economies (i.e., IFC eligible countries). The cash proceeds can be used as a liquidity cushion and/or working capital purposes and/or a cash collateral for bid, performance, or LD bonds (or L/Cs). Still at a pilot stage. As above; but, IFC is to provide a Risk Sharing Facility to commercial bank(s), the Issuing Banks (i.e., a partial guarantee up to, say, [40%] of total amount) that will issue bid, performance, or LD bonds (or L/Cs) on behalf of the Client to the beneficiaries in the emerging economies. When the bond or the L/C is drawn and the Client fails to pay the equivalent amount to the Issuing Banks, IFC pays the Issuing Bank its guaranteed portion which becomes an IFC loan to the Client. Still at a pilot stage 24