Involvement of Evangelische Bank in climate and sustainable finance: Roles, partnerships and tools Dr. Bernhard Graeber 23.04.2018
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 23.04.2018 Austrian Climate Change Workshop 2
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 23.04.2018 Austrian Climate Change Workshop 3
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. 23.04.2018 Austrian Climate Change Workshop 4
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. 23.04.2018 Austrian Climate Change Workshop 5
Example for SMEs: asparagus processing in Peru 23.04.2018 Austrian Climate Change Workshop 6
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 23.04.2018 Austrian Climate Change Workshop 7
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. 23.04.2018 Austrian Climate Change Workshop 8
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 23.04.2018 Austrian Climate Change Workshop 9
Your Contact to Evangelische Bank Dr. Bernhard Graeber Head of Infrastructure / Renewable Energies Telefon: +49 561 7887 3535 Telefax: + 49 561 7887-4658 E-Mail: bernhard.graeber@eb.de Dieter Hornung Dipl. Volkswirt Director Institutional Sales Telefon: 0561 7887-3561 Telefax: 0561 7887-4661 E-Mail: dieter.hornung@eb.de 23.04.2018 Austrian Climate Change Workshop 10
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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 23.04.2018 Austrian Climate Change Workshop 12