african development bank as a business partner

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African Development African Development Bank as a Business Bank as a Business

PartnerPartner

Engine of growthEngine of growth…… platform for developmentplatform for development……

African Development BankPrivate Sector Operations

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This presentation is organized in 4 parts:

o Who We Are

o What We Do

o How to Work With Us

o Operational Results


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o Who We Are

o What We Do



In the first part of this presentation…


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Introduction

The African Development Bank has two lending windows:

o Sovereign Guaranteed Operations (public sector projects through governments at concessionary terms)

o Non sovereign Guaranteed Operations - OPSM (private sector projects at commercial terms)


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Mr. Tim TurnerPRIVATE SECTOR DIRECTOR

MiningMining

Mr. Mouhamadou Niang,

Division Manager, INDUSTRIES &

SERVICES

Mr. Mouhamadou Niang,

Division Manager, INDUSTRIES &

SERVICES

ManufacturingManufacturing

Ms. Neside Tas Anvaripour

Division Manager,INFRASTRUCTURE

FINANCE

Ms. Neside Tas Anvaripour

Division Manager,INFRASTRUCTURE

FINANCE

Oil & GasOil & Gas

Health & EducationHealth & Education

Energy Energy

TranportTranport

ICTsICTs

Water & SanitationWater &

Sanitation

Mr. Samuel Mivedor,Division Manager

PORTFOLIO MANAGEMENT

Mr. Samuel Mivedor,Division Manager

PORTFOLIO MANAGEMENT

Transaction Administration

Transaction Administration

Project Management

Project Management

WorkoutsWorkouts

Exposure Management

Exposure Management

Mr. Yaw Kuffour,(Acting Manager)

FINANCIAL INTERMEDIATION & SME DEVELOPMENT

Commercial Banks

Regional DFIs

Microfinance

Migration and development

Mr. Alfred Helm,Division ManagerTRANSACTION

SUPPORT

Partnerships

Financial ModelingResults

Management

Syndication

Technical AssistanceTechnical Assistance

Private Sector TeamPrivate Sector Team

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In the second part of this presentation…

o Who we are

o What We Do




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ActivitiesActivitiesThe activities of the Private Sector comprise two categories:

o Non-sovereign guaranteed (NSG) lending activities (assistance to private entities) in the area of Financial Intermediation, Industries & Services, PPPs & Infrastructure, and Microfinance;

o Non-lending activities include studies, initiatives and new programs.


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The AfDB Strategy for private sector development (PSD)

Two primary levels:

A. Assist African governments to improve the enabling environmentfor the private sector:- Improve essential physical infrastructure (e.g. power, ICT, transportation)- Improve “soft infrastructure” (e.g. regulatory and legal frameworks, financial sector, trade liberalization, BDS)

B. Create a catalytic and demonstration effects by assisting entrepreneurs with specific transactions:- Infrastructure (e.g. power, transportation, telecoms, water)- Industries and Services (e.g. mining, O&G, cement, agribus, hotels)- Financial Intermediation (e.g. banks, MFIs, insurance, leasing)


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The Bank will seek opportunities across the full spectrum of countries

Geographical Distribution Objectives

o Low Income Countries & Fragile States (at least 40%)Infrastructure, mining, banking, micro-financePPP opportunities with ADF resources, scale up public goods

o Middle Income Countries (up to 40%)Infrastructure, public utilities, renewables, bankingRisk management, knowledge acquisition opportunities, partnerships

o Regional and Multinational (at least 20%)Infrastructure, industries, financial institutionsFunds, programs


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PartnershipsPartnershipsPartnershipsPartnerships

Diagnostics & Strategy“Understanding thebusiness-enablingenvironment”

Research, Country and Regional teams

Public Sector Operations

Public Ops“Improving thebusiness-enablingenvironment”

Private Sector Operations

Private Ops“Showing thatentrepreneurshipworks”

With donors and other IFIs




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Critical Impact Dimensions

• Strategic Alignment – The degree of alignment with all relevant strategies and policies.

• Commercial Viability – Likelihood of sustainable financial success.

• Development Outcomes – Expected economic, environmental and social benefits.

• Additionality & Complementarity – The Bank’s “value added”and synergy with the efforts of other development partners.


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� Infrastructure (at least 40%)◦ Focus on Power, Renewable Energy, ICT, Transport, Water◦ Encourage PPP operations◦ Develop SME linkages

� Industries & Services (up to 30%)◦ Manufacturing (e.g cement), mining, O&G, agro-industries, hospitality,

health◦ Mostly medium, large and mega enterprises/project finance◦ Develop SME linkages

� Financial Intermediation (up to 30%)◦ Banks, DFIs, MFIs, housing finance, leasing, insurance, trade facilitation◦ Medium, small and micro enterprises, capital markets

Sector Distribution Objectives


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Instruments

o Senior Debt– Up to 15 years (5 years grace period), foreign or local currencies

o Guarantees– partial risk, partial credit (long tenors)

o Subordinated Debt– foreign or local currencies

o Equity – direct, equity funds, up to 25%

o Technical Assistance– grants for studies, capacity building


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Maximizing Strategic Fit(the “sweet spot”)

Public Private

Strategic Fit


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� Who we are

� What We Do

� How to Work With Us

� Operational Results


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� An enterprise/project must be located and incorporated in the Regional Member Countries (RMCs) of the Bank, whether promoted by African or non-African investors

� An enterprise/project must be majority-owned (51% +) by private-sector investors, or publicly owned with strong financial standing and proven managerial autonomy.

� Projects for the establishment, expansion, diversification and modernization of productive enterprises. No direct financing of trade.

� Maximum investment of 1/3 of total project cost


1. Description of the project (sector, location, production volumes, etc.);2. The sponsors, including financial and managerial background;3. Cost estimates, including foreign exchange requirements;4. Financing plan, indicating the amount of ADB financing desired;5. Key technical and environmental features;6. Feasibility indicators;7. Business climate, market prospect, including proposed marketing arrangements;8. Implementation plan, including the status of required licenses, permits,certificates, etc.

Having determined the eligibility of a project financing application, the Bank will initiate a full application review. To facilitate this, the Bank would require the following:

1. Feasibility study;2. Business plan;3. Environmental impact assessment (depending on the nature of the project).

To enable the Bank to promptly assess the eligibility of a project for investment, interested enterprises should submit a preliminary application covering, in general, the following information:

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� Who we are

� What We Do

� How to Work With Us

� Operational Results


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� Power– thermal, hydro, wind, solar

� Transport – ports, roads, airports

� ICT – submarine cable, satellite, telephony

� Oil & Gas – exploration, extraction, refining, pipelines

� Mining – extraction, refining, smelting

� Agribusiness– sugar, oils, timber, bio-fuels, fishing

� Health & Education – hospitals, schools

� Financial sector– banks, insurance, leasing, microfinance

Sector Coverage


� Project Cost :� Euro 92 Million

� AfDB Loan : � Euro 22 Million

� Benefits:� Improvement of Cameroonian firms

competitiveness

� Improvement of delivery of social services, such as healthcare and water supply;

� The availability of reliable and affordable electricity supply will support SME development,

� The creation of additional jobs in the project’s construction phase and during operation

� Potential reduction of emissions from obsolete private diesel generators

.

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Senegal: Sendou Power Project (125MW)

� Project Cost :� EUR 183 Million

� AfDB Loan :� EUR 55 Million Senior loan.

� Mandated Lead Arranger EUR70 Million

� Benefits:� The project will increase annual production of

electric power, supplying 40% of current production.

� It will significantly reduce the cost of energy, thereby enhancing competitiveness.

� It will improve the quality of power supply,

� It will create jobs and improve the living environment.

� It will stimulate further development of the industrial zone in the region.

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Uganda : Buseruka Hydropower Project

� Project Cost : � USD 27 Million

� AfDB Loan :� USD 9 Million Senior loan

� Benefits:� It will provide reliable electricity at

lower cost to the rural community and local businesses.

� It will address the loss of environmental resources

� Contribute to Jobs Creation Production,

� Improving water supply andImproving health services and primary and secondary educations.

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Ghana: Tema Osonor Power Limited (TOPL)



� Benefits:� It will improve supply and reliability of

electricity

� It will carry a competitive infrastructure conducive to economic activities.

� It will facilitate the growth of industrial activity

� It will help create additional employment opportunities for the local workforce.

� Project Cost :� USD 99,36 Bilion


� Benefits:� Improved transport networks and

regional and international trade

� Improved reliability of social services and industrial production in the sub-region

� Competitiveness growth in South Africa and sustainable economic development

� The generation of jobs

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Senegal: Dakar-Diamniadio Highway

� Project Cost :� Euro 225 Million� AfDB Loan :

� Euro12 Million Senior loan � Benefits:

� It will reduce congestion in Dakar

� It will create employment opportunities during the construction and operation phases

� It will improve the living standards of the stakeholders

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Senegal: Dakar Container Terminal


� AfDB Loan :� Euro 47,5 million Senior loan

� Benefits:� Reduced cost of delivery of goods for import

as export

� Knowledge Transfer

� Local capacity building

� Creating new jobs

� Project Cost :� Euro 524.81 Million

� AfDB Loan : � Euro15 Million Senior loan

� Benefits:� Alleviate air traffic congestion at Dakar

airport

� Promote the development of neighboring regions

� The recruitment and skills development of local capacity

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� AfDB Loan : � USD 50 Million Senior loan

� Benefits:� Will enable operators in emerging

countries to access international bandwidth at prices well below those currently available.

� O3b links will facilitate access of landlocked countries to broadband through submarine cables

� Enhance the access of Africans to online banking.

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� Project Cost :� USD 300 million

� AfDB Loan : � USD 66 million

� Benefits� Connectivity

� Cheaper international calls

� Improved access services to Internet

� Development of offshore services, mobile banking services

� E-governance

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Tunisia: Hasdrubal Oil and Gas FieldDevelopment Project (ETAP)

� Project Cost :� USD 1, 318 Million

� AfDB Loan :� USD 150 Million

� Benefits :� Meet growing national demand for gas

� Creation of 1,200 local jobs

� Generate foreign exchange through import substitution

� Project Cost :� USD200 Million

� AfDB Loan :� USD 25 Million Equity Investment

� Benefits:� Multiply the governments

income of private sector development in Africa

� Permanent and short term jobs

� It will promote transparency through the initiative for the Extractive Industries Transparency Initiative (EITI)

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� Project Cost :� USD 133,4 Million

� AfDB Loan :� USD30 Million Senior loan

� Benefits:� It will develop the construction sector

� It will encourage economic growth.

� It will create 285 jobs during its production phase,

� It will improve social infrastructure health, education, access to water for surrounding populations.

Rwanda: La Cimenterie du Rwanda (CIMERWA)

� Project Cost :� USD300 Million

� AfDB Loan : � USD 40 Million Equity Investment

� Benefits:� AAF will have a positive impact on

strengthening food security

� Jobs creation,

� Reducing poverty

� Project Cost :� Euro 212.5 Million

� AfDB Loan : � Euro 30 Million Senior loan

� Benefits:� It will inject capital into the Segou District

economy

� Help increase the living standards of the rural population.

� job creation

� Enhance food security,

� Income generation,

� Poverty alleviation,

� Skills transfer

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Morocco : OLEA CAPITAL, agro-industrial project aimed at producing olive oil

� Project Cost :� Euro 1,871 Million

� AfDB Loan :� Euro 34 Million

� Benefits:� The development of the Moroccan

agriculture

� Increased productivity,

� Reduced costs

� Greater competitiveness.

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Sub-Saharan Africa : the Global Environment Fund (GEF) Africa Forestry Fund

� Project Cost :� 150 USD Million

� AfDB Loan :� USD 20 Million Equity Investment

� Benefits:� Jobs creation

� Income generation

� Poverty reduction

� Private sector development

� Skills transfer


� AfDB Loan : � Euro 10 Million Equity investment

� Benefits:� Extend health insurance coverage across the

continent

� Improve utilization of health services

� Increase and streamline local production and distribution of quality pharmaceutical products

� Job creation

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� Project Cost :� USD 300 Million

� AfDB Loan : � USD10 Million Equity Investment

� Benefits:� Economic growth in Africa

� Creating new job opportunities

� The financial market development

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Mauritania: Mauritania Leasing(ML)


� AfDB Loan :� USD5 Million Line of credit ( LOC)

� Benefits� Strengthening local financial markets

in Africa

� Promoting alternative financial instruments

� Facilitate credit to the underserved SME sector.

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West Africa: West African Development Bank ( BOAD)

� Project Cost :� € 522 Million

� AfDB Loan : � €67.05 Million

� Benefits� The creation of at least 63,000

temporary and 4,000 permanent jobs,

� Generate € 55.906 million net revenue for the governments of the area

� additional € 212.845 million income for households.

� Poverty reduction

� Regional economic integration

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Kenya :K-Rep Bank


� AfDB Loan :� USD 1 Million

� Benefits� Access to finance for the poor

� Contributing to the deepening of the microfinance industry

� Supporting the creation and growth of viable micro enterprises;

� Increasing income among micro-entrepreneurs and

� Generating employment

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� There are huge opportunities for profitable investment in Africa.

� Although the investment climate may be improving, it is still quite challenging.

� The African Development Bank is a partner that can help investors/project sponsors achieve business success and ensure sustainable and equitable development.


African Development Bank

Private Sector and Microfinance Department

BP 323, 1002, Tunis Belvedere, Tunis- Tunisie

Tel:+216 7110 3227/ Fax:+216 71 834 17

Email: [email protected]

Website: www.afdb.org/privatesectordevelopment


african development bank as a business partner

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