Canada Infrastructure Bank. November 2018

Transcription

1 Canada Infrastructure Bank November

2 CIB Mandate Invest $35B Attract private capital Into new infrastructure projects In the public interest Transfer significant usage or demand risk Provide advisory services including best practices, data, information and Inventory of Canadian Infrastructure Projects 2

3 We will invest >$5bn in each of the focus areas Green Infrastructure Public Transit Transport and Trade 3

4 Building Blocks Expanding on success of PPPs RISKS RETAINED Construction Risk Financing Equity Debt Equity Government Financing Government Financing Government Financing Government Financing Debt CIB Investment Government Financing Design Bid Build Design Build Design Build Finance Design Build Finance Operate & Maintain Usage & Revenue 4

5 CIB Investment Criteria Type of Project Transformative Public Interest Sustainable Bankability Reasonable Prospect of earning returns on Investment Go to Market Procurement Strategy Level Playing Field Competing Infrastructure 5

6 CIB Investment Criteria Structure CIB seeks To finance projects Private sector risk sharing - Construction - Usage and revenue, ramp-up - Capacity - Regulatory - Operational Private investment = a multiple of CIB s Strong alignment of all partners Level playing field 6 CIB does NOT Provide recurring funding Take all of the risk Crowd-out private investment with cheap capital Allow first money out for private investors Create unfair market advantage

7 CIB will fill in gaps to improve viability of Projects FLEXIBLE INSTRUMENTS Debt or equity Investment Senior/preferred or subordinated NO Grants FLEXIBLE RETURNS Investment: 0% to market pricing Pricing will depend on the requirements of the project Long term or short term FLEXIBLE TERMS Protect CIB investment, but allow developer to manage project effectively Alignment of interests between all parties 7

8 CIB Market Roles CIB actively works with the Public and Private Sector Public Sector Sponsors (Government Sponsors and Procurement Agencies) Co-investment of Development Costs Advisory & Structuring Bankability Assessment Private Sector Risk perspective Backstop Commitment Stapled Investment Products Standardized Investments for Scalability Go to market strategy Canada Infrastructure Bank Private Sector Sponsors (Proponents, Bidders and Debt& Equity Investors) Market Sounding Stapled Investment Products Treeing with Bidders Co-Investment & Syndication Sell Down Unsolicited Projects Market Development Ideas CIB Investment Requests 8

9 Market Engagement Unsolicited Proposals Backstop Commitment Standardized Investments for scalability Develop a credible process for all levels of governments Credentials based procurement Early projects Appropriate market testing Market discovery of the financing gap for CIB investment Competitive process Maximize risk transfer Convene private sector capital Limit CIB investment to required financing gap 9 Develop a credible process for all levels of government to work with Debt or equity programs Smaller investments Create scale to syndicate

10 We have had over 120 outreach meetings Project Discussions > 55 projects 50% unsolicited Actively Engaged 10 projects Closed 1 investment 10

11 Réseau Express Métropolitain (REM) $1,283,000,000 Interest Rate =1% escalating to 3% $2.9 billion of private capital is more than two times CIB s Core investment area for CIB Senior Secured Lender 15-Year Term Loan August 2018 Meets CIB s public interest and bankability criteria Five months to negotiate and finalize 11

12 Inventory of Canadian Infrastructure Projects Objectives Promote opportunities to domestic and international service and capital providers Foster collaboration, sharing of best practices and coordination of procurement Content provided by project proponents, managed by CIB Accessible to any user, free of charge Comprehensive list, not just projects meeting CIB criteria Projects in all stages of development Submission details to include project description, cost, stage, timing Expected launch by mid

13 We are building more infrastructure for Canadians and a larger addressable market More large scale transformative projects More government demand for private investments More equity and debt Sophisticated unsolicited proposal process More revenue, usage and operating risks and returns 13

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