Involvement of Evangelische Bank in climate and sustainable finance: Roles, partnerships and tools. Dr. Bernhard Graeber

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1 Involvement of Evangelische Bank in climate and sustainable finance: Roles, partnerships and tools Dr. Bernhard Graeber

2 We are there for our customers We are the leading bank for churches, christian and social welfare organisations, foundations as well as health care and social services organisations. Approximately 480 employees are working in our 14 nationwide branches. With our products and services we are a reliable partner for more than 19,000 institutional clients and about 72,000 retail clients. Since 1985, Evangelische Bank offers Asset-Management-Services with a sound sustainability focus. Approx. 4 Bn Assets under Management Austrian Climate Change Workshop 2

3 Cooperation EB and DEG Two strong partners Initiator and Advisor of Funds Due Diligence and selection of potential projects First point of contact for investors more than 20 years experience in Sustainable Asset Management Due Diligence and selection of projects considering environmental and social criteria Presentation of projects for cofinance and monitoring responsibilities 55 years experience in financing projects and enterprises in emerging markets Austrian Climate Change Workshop 3

4 EB-SME* Finance Fund Emerging Markets Conception and Objectives Conception Fund and DEG jointly provide loan-financing for financial institutions in Emerging Markets Fund will only co-invest together with DEG Loan-financing shall be used for financing of local small- and medium-sized enterprises Objectives Support the development of small- and midcap enterprises in Emerging Markets Provide developmental support Generation of attractive returns *Small- and medium-sized enterprises Austrian Climate Change Workshop 4

5 Financial gap for SMEs* Global Player (large) midcaps Financial gap for SMEs Venture Capital & Private Equity Funds SMEs are too small and too expensive. Banks SMEs are too risky and too expensive. Balance sheet < $ 15m Revenues < $ 15m < 300 employees Missing Middle Missing Middle Small Small and and medium-sized Medium Businesses (SMEs) enterprises (SMEs) Financing between $ 10k and $ 1 Mio. DEG-focus via financial intermediaries Mirco-enterprises Micro finance institutions SMEs are too large. The loan-financing supply for SMEs is a fundamental cornerstone for the further development of Emerging Markets. With increasing economic maturity higher growth rates are expected. *Small and medium-sized enterprises Austrian Climate Change Workshop 5

6 Example for SMEs: asparagus processing in Peru Austrian Climate Change Workshop 6

7 Sample financing case from Costa Rica Niche bank providing particular financing and consulting for SMEs Impact 45% of the total portfolio are SMEs, 18% micro Provision of particular consulting for small enterprises Project DEG-client since 2002 Subordinated loan of USD 10 Mil. Three assistant measures for SME-support: f.e. implementation of a SME-Supportcenter Austrian Climate Change Workshop 7

8 Investment concept Target portfolio Investment diversification 37,5% 62,5% Regional diversification 9% 9% 9% 5% 5% Senior Darlehen Loan Tier II Darlehen II Loan Ost- und Südafrika (exkl. Rep. Südafrika) West- / Zentralafrika Guatemala Bolivien Honduras Nicaragua Costa Rica El Salvador Panama Paraguay Mexico Usbekistan Sri Lanka Bangladesch Indicative Terms: Target-Return (USD): Net-Return (USD): Net-return after currency hedge (as applicable): approx. 7 % p.a.* approx. 6 % p.a.* approx. 4 % p.a.* Term: 10 years + Investmentphase Ø-Duration: Interest rate of loans: Fees: Structure: 5.1 years usually: variable interest rates (no interest rate risk) approx. 1.0% (no commitment fees) closed Luxembourg Specialized-AIF EB invests in Fund; DEG invests at min. the same volume as the fund in every investment à aligned interest with investors Application of sustainability criteria in line with defined sustainability principals *Return calculation results of a sample portfolio. The return cannot be garanteed Austrian Climate Change Workshop 8

9 EB-SME Finance Fund Emerging Markets Chances und Risks Chances Participation in the development of dynamic financial sectors in Emerging Markets Co-Investment with one of the leading Development Finance Institutions Generation of attractive returns by low volatilities (historically low default rates of DEGfinancial sector loans) Risks Shareprice decrease due to interest rate and currency risks Shareprice decrease due to repayment delay / -default of refinanced banks Higher country risks due to investments in Emerging Markets Austrian Climate Change Workshop 9

10 Your Contact to Evangelische Bank Dr. Bernhard Graeber Head of Infrastructure / Renewable Energies Telefon: Telefax: bernhard.graeber@eb.de Dieter Hornung Dipl. Volkswirt Director Institutional Sales Telefon: Telefax: dieter.hornung@eb.de Austrian Climate Change Workshop 10

11 Disclaimer This presentation is advertising material that is exclusively for Professional Clients. Reproduction of this presentation and / or transfer of this presentation to third parties is not permitted without our explicit consent. We generally assume that Professional Clients can recognize and financially bear the risks associated with an investment. This presentation is for informational purposes only and, in particular, does not constitute an offer or solicitation to make any offer to buy, sell or subscribe to any investment title or financial service. It does not constitute a financial analysis or investment advice and may not substitute for a personal consultation. This presentation only gives an overview of essential features of products and services. Further and only binding information as well as a complete presentation of the product features, opportunities and risks can be found in the respective information documents, which you can obtain from us after publication. Information and opinions contained in this presentation are from us or from others sources, which we consider reliable. Please be aware that historical performance data, forecasts and other simulations are not a guarantee or a reliable indicator for future performance. We don t accept any liability for the economic development of a product. The validity of any information contained in this presentation is limited to the time when this presentation was made as well as to our opinion at that time and it can change at any time. For a particular product, at any time, only the latest presentation, prospect or product information is valid Austrian Climate Change Workshop 11

12 Head of Infrastructure / Renewable Energies Bernhard Graeber More than 20 years experience in energy economics, renewable energy and infrastructure 12 years management experience Transaction and investment experience approx. 4 Bill. Head of Infrastructure Investments at TALANX Insurance Group repsonsible for approx. 1,3 Bill. Assets under Management in sectors renewable energy, electricity, gas and water utilities as well as social infrastructure 15 successful transactions with an investment volume more than 1 Bill. Head of Renewable Energies at the german utility company EnBW International project development experience in the area of renewable energies (wind, hydro and biomass/biogas) University degree in mechanical engineering and physics, PhD in energy economics Austrian Climate Change Workshop 12