Financing your Investment in Mexico Energía Fotovoltaica: El Potencial de la Colaboración Mexicano-Alemana Dr. Stefan Blum, Representative, DEG Mexico Office México D.F., 10 September 2013
Mitigating your investment risks through a strong, experienced financing partner like KfW Challenges Mitigants Investment Risk (e.g. off-take price volatility) Long term tailor made financing solutions, network of co-financing partners Partnership & Responsibility KfW is a AAA-financing partner with a Buy and Hold Strategy New Market & Regulatory Framework In Mexico for the last 40+ years (DEG local office for 10 years), strong links to local authorities and business community Infrastructure, E&S Compliance Experienced internal experts, government grants FX-Volatility Long term financing instruments in USD and MXN Political Support KfW represents the Federal Republic of Germany 2
KFW International supporting economic development Target markets Entwicklungsbank Developing countries Industrialising countries Industrialised countries KfW Entwicklungsbank DEG KfW IPEX-Bank Sectoral focus Climate / Environment Financial systems Social infrastructure Economic infrastructure Climate / Environment, Energy Infrastructure Financial sector Manufacturing Agribusiness Climate / Environment, Energy Infrastructure / Mobility solutions Raw materials Industries and Services 3
Financing solutions for your challenges abroad (1 of 3) ECA covered financing for European equipment and services Investor/ Buyer Repayment Loan Agreement (85%) Supply Contract Down & Interim Payments (15%) Loan Cover (95%) German Exporter Export Cover Would best be used for Imports of German a/o European equipment Amounts typically from 20 to 200 Mio. USD Benefits + Long term financing + Lowering financing costs (subsidised fixed interest rate, CIRR) + European ECA-cover 4
Financing solutions for your challenges abroad (2 of 3) Long-Term Debt Finance covering corporate lending and project finance Exchange rate EUR/MXN Parent Company Guarantees (case by case) Equity Mexican Subsidiary/SPV Loan local collateral MXN lost 48% towards the EUR in 10 years 4,0% p.a. Max Loss: 65% April 03 to Oct 09 8,1% p.a. Would best be used for Project finance structure requiring long tenors Amounts typically from USD 10 to 100m Benefits + Tailor-made financing (4-20 years) in USD, MXN, EUR + Attractive market rates based on project risk + Showing the Bundesadler in local balance sheet 5
Equity Financing solutions for your challenges abroad (3 of 3) Mezzanine Instruments and equity participations Put / Call Agreement Parent Company Example: Financing an investment in Mexico with a total amount of USD 60m (20m equity), DEG could participate with a 10m USD mezzanine loan. Mexican Subsidiary/SPV Minority Stake Would optimally be used for Strategic sponsors optimizing own equity contribution Amounts typically from USD 10 to 25m Single project or portfolio of projects Benefits + Strengthening equity base, attracting local financing + Equity participations with limited voting rights, no operating influence, flexible exit + Mitigation of political risk 6
Government Grants & DEG Funds Government Grants: We support your dedication to make a difference Program How much for whom? Use of funds an targeted goal? From whom? developpp.de German and European corporates Co-Financing of projects with a structural development impact, e.g. training centers for employees or suppliers, community building etc. Feasibility Studies German and European corporates up to EUR 500 Mio. sales Co-Financing of external cost in connection with feasibility studies regarding investments in a DEG partner country Technical Assistance German and European corporates for DEG clients Co-Financing of measures with structural effects like increasing energy-efficiency, waste reduction, risk controlling and many more Climate Cooperations German, European and local corporates Co-Financing of measures regarding climate protection, e.g. pilot plants, introduction of innovative climate protection technologies etc. Transaction Manager German and European corporates up to EUR 500 Mio. sales Co-Financing of the external cost in connection with the efficient management of a structured finance transaction 7
Get in touch we are here to support you KfW DEG Kämmergasse 22 50676 Cologne Germany Tel.: +49 221 4986 0 Fax: +49 221 4986 1290 www.deginvest.de KfW DEG Rep. Office Mexico Arquímedes No. 19 4 piso Col. Bosque de Chapultepec Del. Miguel Hidalgo 11580 México, D.F.; Mexiko Tel.: +52 55 9172-9400 Fax: +52 55 9172-9404 KfW IPEX-Bank GmbH Palmengartenstrasse 5 9 60325 Frankfurt am Main Germany Tel.: +49 69 7431 3300 Fax: +49 69 7431 2944 www.kfw-ipex-bank.de DEG Representative Office Mexico Dr. Stefan Blum Representative Tel: +52 55 9172-9400 E-mail: Stefan.Blum@deginvest.de DEG Representative Office Mexico Alex Wegenast Coordinator European Business KfW Group Tel: +52 55 9172-9400 E-mail: Alex.Wegenast@deginvest.de 8