DBDH Seminar 5 December Tina Kollerup Hansen, Investment Director

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1 DBDH Seminar 5 December 2017 Tina Kollerup Hansen, Investment Director

2 DANIDA BUSINESS FINANCE AT A GLANCE WHAT? Subsidised, tied loans for investments in sustainable infrastructure which has limited access to commercial markets Financing The financing is partly ODA (subsidy), partly from a commercial Bank (commercial) Total outstanding commitment is DKK billion FL17 Annual frame (finanslov) (DKK million) FFL ELIGIBLE COUNTRIES DAC countries GNI/capita max USD Danish representation Now also when in relation to IFU investments!! PAGE 2 12/11/2017 IFU Board Meeting

3 Non-commercially viable DBF Strategic Principles for project selection Focus countries (income level DK representation) Country development strategy and sector plan in place Complementarity and synergy Acceptable guarantor/preferably Ministry of Finance Project related criteria: Projects will be assessed on the contribution to the SDGs, life cycle cost and sustainability including IFC standards and UNGP Projects should have a minimum size of preferably DKK 100 million. Upper limit depends on budget available. Involvement of Danish companies that are competitive based on life cycle cost :

4 DANIDA BUSINESS FINANCE SUBSIDY INTERESTS DURING IMPLEMENTATION AND REPAYMENT PERIOD EXPORT CREDIT PREMIUM MARGIN TO DANISH LENDING BANK TO BE PAID BY DANIDA BUSINESS FINANCE (TOTAL DANIDA SUBSIDY) CASH GRANT CONTRACT AMOUNT LOAN AMOUNT TO BE REPAID BY BORROWER/BUYER + COMMITMENT AND MANAGEMENT FEES TO DANISH LENDING BANK TO BE PAID BY BORROWER/BUYER

5 DANIDA BUSINESS FINANCE - SET UP

6 PROJECT IMPLEMENTATION - Monitoring and Verification Consultant - Quarterly reports from Contractor - Verification at taking over - Verification at End of Defect Liability - Reports on results and indicator for 5 years after taking over - Verification and review after 5 years (project completion report) 6

7 LOAN CONDITIONS LOAN MATURITY PERIOD AND CURRENCY 10 YEARS REPAYMENT AFTER TAKING OVER WITH 6 MONTHS GRACE PERIOD LOANS IN EUR OR USD GUARANTEE MINISTRY OF FINANCE MUST ACT AS GUARANTOR DECLARATIONS BUYER, BORROWER AND SUPPLIER MUST SIGN DANIDA DECLARATIONS TO BE PAID BY THE BORROWER BI-ANNUALLY INSTALMENTS OF THE FINANCED AMOUNT LESS THE CASH GRANT COMMITMENT FEE (SHALL NOT EXCEED 0.25 % P.A.) MANAGEMENT FEE (SHALL NOT EXCEED 0.375% FLAT)

8 APPROVAL PROCEDURE Identification Screening of project in Danida s Programme Comittee Feasibility study supported by Danida Business Finance Appraisal Approval in Danida s Council for Development Policy Procurement - carried out by buyer Contract and Loan agreement Final approval of support from Danida Business Finance Implementation

9 Danida Business Finance Metro Fiber Networks and Cloudband, Burkina Faso (50% subsidy) Contract amount: Cash grant: Loan amount: 55.7 million EUR 15.5 million EUR 40.2 million EUR

10 Danida Business Finance 93 MW Wind power project in Santa Cruz, Bolivia in tender (35% subsidy) Estimated contract amount: Estimated cash grant: Estimated loan amount: million EUR 26.3 million EUR 92.0 million EUR

11 DBF pipeline Contract Grant Country Project titel Sector (1,000 kr.) (1,000 kr.) Bolivia Warnes, San Julian and El Dorado Wind Projects Wind 854, ,000 Vietnam Son La Radio Comm. 44,624 22,500 Vietnam Vi Thanh Drainage and Water Treatment Project Water 86,200 33,800 Ghana Road Bridges in Northern Ghana Transport 380, ,690 Bangladesh Saidabad III Water 1,350, ,600 Bangladesh Saidabad I upgrading Water 126,474 63,237 Kenya Thika and Githunguri Water & Sanitation Improvement Project Water 350, ,500 Tanzania Waste management Facilities in Dar es Salaam Env. 45,000 22,500 Tanzania Sewerage Treatment Project in Dar es Salaam Water 1,138, ,133 Pakistan Faislabad Waste Water Treatment Plant Project Water 750, ,500 Uganda Kampala South Water Treatment Plant Project Water 700, ,000 Uganda Hoima and Masindi Water & Sanitation Project Water 350, ,000 Ethiopia Assala Wind Power Project Wind 1,264, ,370 Total 7,440,224 3,774,830

12 Further contacts: Tina Kollerup Hansen Investment Director Tel: IFU Fredericiagade Copenhagen K Denmark Tel Fax ifu@ifu.dk