Multilateral Investment Guarantee Agency Enhancing Investments in Emerging Countries January, 2013

Transcription

1 Multilateral Investment Guarantee Agency Enhancing Investments in Emerging Countries January, 2013 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 1

2 1. MIGA in the World Bank Group 2. Typical Risks Faced by Investors in Developing Countries 3. Credit Enhancement Solutions 4. MIGA s Value Added 5. MIGA s Performance Appendix MIGA Underwriting Other project examples MIGA Contacts MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 2

3 World Bank Group IBRD International Bank for Reconstruction and Development IDA International Development Association Est Est IFC International Finance Corporation Est Est MIGA Multilateral Investment Guarantee Agency Role: To promote institutional, legal and regulatory reform To promote institutional, legal and regulatory reform To promote private sector development To promote cross-border investments Clients: Products: Governments of member countries with per capita income between $1,025 and $6, Technical Assistance - Loans - Policy Advice Governments of poorest countries with per capita income of less than $1,025 - Technical Assistance - Interest Free Loans - Policy Advice Private companies in member countries - Equity/Quasi-Equity - Long-term Loans - Advisory Services Foreign investors in member countries Credit Enhancement and Political Risk Insurance for Financial Institutions (loans) and Investors (equity & shareholders loans) Shared Mission: End extreme poverty and build shared prosperity MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 3

4 1. MIGA in the World Bank Group 2. Typical Risks Faced by Investors in Developing Countries 3. Credit Enhancement Solutions 4. MIGA s Value Added 5. MIGA s Performance Appendix MIGA Underwriting Other project examples MIGA Contacts MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 4

5 Perceived Risks in Emerging Market Investment by Investors Percent of respondents Source: MIGA-EIU Political Risk Survey MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 5

6 Typical Risks Faced by Investors and PRI Solutions Inability to convert or transfer dividends or loan payments due to FX restrictions Transfer and Convertibility Cover Failure of government to honor obligations under key project documents (e.g. concessions, off take agreements) Breach of Contract Cover Government nationalizes or otherwise makes it impossible to operate the project through discriminatory measures Expropriation Cover Destruction or interruption of business due to political violence War and Civil Disturbance Cover MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 6

7 Political Insurance Breach of Contract, Energy Sector Azito Energie S.A., Côte d Ivoire Hyundai Engineering & Construction Co. (EPC Contractor) Azito O&M-affiliated to Globeleq (Operator) Alstom Power Systems SA (Major Maintenance) Obligor Guarantee holder Shareholder Loan Globeleq, IPS (Sponsors) Azito Energie S.A. Concession Agreement Proparco, BIO, DEG, FMO, EAIF, BOAD, BICICI (Lenders) Loan Irrevocable Instruction to Offtake and pay Gas Sales Agreement Compagnie Ivoirienne de l Electricité - CIE (Electricity Off-taker) Government of Côte d Ivoire Direct Agreement Project: Conversion of the existing Azito Thermal Power Plant from simple-cycle to combined-cycle 20-year power purchase agreement with CIE MIGA s BoC cover on a shareholder loan from Globeleq Tenor: 20 years Amount: US$116.1m MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 7

8 Political Insurance Breach of Contract, Transportation sector Doraleh Container Terminal Project, Djibouti Direct Agreement DP World Djibouti FZCO Shareholder Musharaka (Financing) Guarantee Dubai Islamic Bank PJSC Project: Development, design, construction, management, operation, and maintenance of a new container port terminal in Doraleh, Djibouti Port Autonome International de Djibouti State Owned Enterprise Government of Djibouti Obligor Guarantee holder Project Company Doraleh Container Terminal S.A. Concession Contributes X% DCT Musharaka JV Financiers Investment Agent Shareholder Project Enterprise Doraleh Container Terminal Project Contributes X% Standard Chartered Bank WestLB AG 30-year concession from Govt. of Djibouti to DP World, UAE; and Port Autonome International of Djibouti MIGA s BoC, EXPRO, WCD & TR covers. MIGA s first guarantee for an Islamic financing structure Tenor: 10 years Amount: $427m ($5m DP World equity and $422m Islamic project financing ) MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 8

9 Political Insurance Breach of Contract Cover, Energy sector Thika Power Ltd., Kenya Melec Power Gen (BVI) Minority Investor AfDB ABSA Capital Loan under Common Terms Agreement MAN Diesel + Melec Power Gen EPC Equity Thika Power Ltd. Letter of Support Power Purchase Agreement L/C Govt. of Kenya Indemnity Guarantee L/C Bank KPLC (SOE) Reimbursement agreements Project: Construction of a heavy fuel oil plant near Nairobi (87 MW) 20-year power purchase agreement with Kenya Power and Lightning Co. MIGA cover Breach of Contract of a loan from ABSA Tenor: 15 years Amount: US$62m MAN Diesel + Turbo France SAS O&M Obligor Guarantee holder MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 9

10 Political Insurance Coverage for Private Equity, Agribusiness sector Chayton Africa, Zambia Norfund (Norway) Zeder/PSG (South Africa) Chayton Africa Chayton Management 21.8% 73.4% 4.8% Equity Project: Master contract for Chayton Africa for investments in farming 3-year master contract leading to 3 specific investments projects (wheat and barley) Commercial Lenders Equity (100%) Chobe Agrivision Company Ltd. IPPA Government of Zambia and Zambia Development Agency MIGA cover: BoC, TR, EXPRO and WCD Tenor: 15 years for specific projects Amount: US$50m Project #1 Project #2 Project #3 Obligor Guarantee holder MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 10

11 Political Risk Insurance Capital Optimization, Financial sector Parent or Holding Bank (consolidated level) Equity and/or Shareholder loan Provisions for capital adequacy Subsidiary Bank in County A Mandatory Reserves Central Bank Holding Bank's Country Central Bank Country A (Emerging Market) Product: designed for global retail banks with significant emerging market operations Coverage against expropriation of mandatory reserves held at Central Banks Reduction of associated risk weights at the consolidated level, improving Capital Adequacy Ratios Subsidiary Bank in County B Mandatory Reserves Central Bank Country B (Emerging Market) Relief of capital provisions allow banks to increase capital deployment for other strategic purposes Obligor Guarantee holder MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 11

12 1. MIGA in the World Bank Group 2. Typical Risks Faced by Investors in Developing Countries 3. Credit Enhancement Solutions 4. MIGA s Value Added 5. MIGA s Performance Appendix MIGA Underwriting Other project examples MIGA Contacts MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 12

13 Credit Enhancement Solutions Lower funding costs for sovereign and sub-sovereign borrowers Non Honoring of Sovereign Financial Obligations (NHSFO) Long term financing for sovereign and sub-sovereign borrowers Lower funding costs and access to long term financing for public entities (SOEs) Non Honoring of Financial Obligations / SOEs (NHFO-SOE) MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 13

14 Credit Enhancement Non-Honoring of Sovereign Financial Obligations Cambambe Hydropower Plant, Angola MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 14

15 Credit Enhancement Non-Honoring of Sovereign Financial Obligations, Energy sector Cambambe Hydropower Plant, Angola HSBC Socgen BHF HSBC Facility Agent Hermes ECA Cesce ECA Project: Expansion of a hydropower dam in Angola Loan Cover: NHSFO on a loan provided to the MOF by a consortium of banks, with HSBC acting as the Facility Agent ENE MINEA Ministry of Finance Tenor: 10.5 years Operation Ownership Contract Funding Amount: US$512m (incl. principal & interest) Cambambe Hydropower Dam Construction Odebrecht EPC Obligor Guarantee holder MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 15

16 Credit Enhancement Non-Honoring of Sovereign Financial Obligations, Financial sector Magyar Export-Import Bank Zrt., Hungary MIGA Covered Noteholders Uncovered Noteholders Obligor Guarantee holder 380m AAArated notes 20m BB+ notes Magyar Eximbank Secured Funding (Ireland SPV) 400m debt issue Proceeds from AAA and BB+ notes Ministry for National Economy of Hungary Eximbank Hungarian Exporters 100% unconditional Sovereign Guarantee Financing and Insurance Facilities Project: Expansion of medium and long-term lending by the Hungarian Export-Import Bank through bond issue MIGA Cover: NHSFO of Government of Hungary guarantee for Hungary Exim s 400m debt issue Amount: 424.4m, covering principal & interest Tenor: 5.5 years Issue rated AAA instead of BB+ (Hungary Sovereign Rating) resulting in lower funding costs and wider investor base MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 16

17 Credit Enhancement Non-Honoring of Sovereign Financial Obligations Kadikoy-Kartal-Kaynarca Metro, Turkey MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 17

18 Credit Enhancement Non-Honoring of Sovereign Financial Obligations, Transport sector Kadikoy-Kartal-Kaynarca Metro, Turkey UniCredit ING Operator Ulasim Ownership Credit Agricole Contract Société Générale WestLB Loan Municipality of Istanbul Funding BNP Paribas Facility Agent Project: Expansion of underground metro system on Asian side of Istanbul, Turkey MIGA Cover: NHSFO on a loan provided to MMI by a consortium of banks, with WestLB acting as Facility Agent Tenor: 9.5 years Amount: 280m, including principal, interest & premium Kadikoy-Kartal-Kaynarca Metro Construction Astaldi-Gulermak- Makyol JV (EPC) Obligor Guarantee holder MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 18

19 Non Honoring of Financial Obligations State owned enterprises New product, available since June 2013 Reserved for creditworthy/highly rated SOEs SOE must be controlled by Government SOE must be carrying out a public function No counter-guarantee from sovereign government needed MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 19

20 1. MIGA in the World Bank Group 2. Typical Risks Faced by Investors in Developing Countries 3. Credit Enhancement Solutions 4. MIGA s Value Added 5. MIGA s Performance Appendix MIGA Underwriting Other project examples MIGA Contacts MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 20

21 MIGA s Value Added Strong pre-claim management Management of risks at pre-claim level (100+ pre claims among 750 guarantees -2 claims paid for Expro, 4 for WCD) Leveraging the World Bank network Highly rated Highly rated multilateral by Basel II Committee Financially stable Frontier markets risk mitigator Strong capital base Access to reinsurance markets Mitigate different risks in emerging markets Longer tenors (up to 20 years) Protects clients social obligations Best practices in environmental and social standards MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 21

22 1. MIGA in the World Bank Group 2. Credit Enhancement Solutions 3. NHSFO Projects in Emerging Countries 4. MIGA s Value Added 5. MIGA s Performance Appendix MIGA Underwriting Other project examples MIGA Contacts MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 22

23 MIGA s Gross Exposure (US$ billion) Supported more than 750 projects Issued record $2.8 billion of guarantees in FY13 ended June 30 Note: CAGR (05-13): 9.8% MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 23

24 MIGA s Issuances Gross Exposure By Region FY13 Sector Breakdown FY13 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 24

25 1. MIGA in the World Bank Group 2. Credit Enhancement Solutions 3. NHSFO Projects in Emerging Countries 4. MIGA s Value Added 5. MIGA s Performance Appendix MIGA underwriting Other project examples MIGA contacts MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 25

26 Underwriting Process and Timeline Initial Conversations Engaging MIGA Investment Due Diligence (Underwriting) Investments Due Diligence Contract Negotiation & Issuance Contract Negotiations Monitoring Environmental and Social Due Diligence Disclosure period 30/60 days Technical and Commercial Due Diligence Initial Management Approval Management & Board Approvals Contract Execution MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 26

27 Credit Enhancement Non-Honoring of Sovereign Financial Obligations, Transport sector Panama City Metro Project, Panama Citi (Guaranteed by COFACE, CESCE); Andean Dev. Corp; GoP cash & T Notes BTMU Citi Mizuho Project: Construction of first line of Republic of Panama metro-rail, connecting northern and southern Panama City Line One Consortium EPC TMB-Ayesa-Inelectra O&M Loan EPC Contract O&M Contract Loan Government of Panama Secretariat of the Metro MIGA Cover NHSFO on a joint loan provided by Citi, BTMU, and Mizuho to the Government of Panama Tenor: 12 years Guarantee Amount: $320m, including principal & interest and premium Obligor Guarantee holder Line 1 Metro Project MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 27

28 Political Insurance Expropriation, Transfer and Convertibility, Breach of Contract, War and Civil Disturbance, Transport sector Konan Bédié Bridge, Abidjan, Côte d Ivoire Local Equity Total CI Bouygues, PAIDF, AFC Equity Banque Nationale d Investissement Senior Lenders FMO, BMCE, AFC SOCOPRIM S.A. Loans Junior Lenders Bouygues, PAIDF, AFC Senior Multilateral Lenders AfDB, BOAD, ECOWAS Project: Design, construction and operation of a toll bridge in Abidjan, Côte d Ivoire First PPP in Côte d Ivoire since civil war and one of the first in West Africa MIGA covering equity and subordinated loans - Expro, W&CD, TR and BoC (incl. cover on State minimum revenue guarantee) State of Côte d Ivoire Concession Agreement with Minimum Revenue Guarantee Tenor: years Amount: US$145m Obligor Guarantee holder MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 28

29 MIGA Contact Senior Management Team, Washington DC Keiko HONDA Executive Vice-President Michel WORMSER Vice-President, Chief Operating Officer Edith QUINTRELL Director, Operations Ana-Mita BETANCOURT Director and General Counsel Ravi VISH Director and Chief Economist Lakshmi SHYAM-SUNDER Director and Chief Financial Officer Marcus WILLIAMS Chief Officer, Strategy, Communications & Partnerships Kevin LU Regional Director Asia Sector Managers, Washington DC Antonio BARBALHO Energy & Extractive Industries (Climate change) Nabil FAWAZ Agribusiness, Manufacturing, Services Olga SCLOVSCAIA Finance, Telecom Margaret WALSH Infrastructure (Water & Transport) MIGA Hubs - Asia and Europe offices Kevin LU Regional Director Asia klu@worldbank.org Muhamet Bamba FALL Infrastructure, Singapore mfall3@worldbank.org Olivier LAMBERT Regional Manager - Europe olambert@worldbank.org MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 29

30 I N S U R I N G I N V E S T M E N T S E N S U R I N G O P P O R T U N I T I E S MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 30