Download - IFC in Sub-Saharan Africa
IBRD
International Bank
for Reconstruction
and Development
IDA
International
Development
Association
IFC
International Finance
Corporation
MIGA
Multilateral
Investment and
Guarantee Agency
Est. 1945 Est. 1960 Est. 1956 Est. 1988
Role To promote
institutional, legal and
regulatory reform
To promote
institutional, legal and
regulatory reform
To promote private
sector development
To reduce political
investment risk
Clients Governments of member
countries with per
capita income between
$1,025 and $6,055
Governments of poorest
countries with per
capita income of less
than $1,025
Private companies in
182 member countries
Foreign investors in
member countries
Products • Technical Assistance
• Loans
• Policy Advice
• Technical Assistance
• Interest Free Loans
• Policy Advice
• Equity / Quasi-Equity
• Long-term Loans
• Risk Management
• Advisory Services
Political Risk Insurance
IFC is the private sector arm of the WBG – Multilateral with a Private Sector Focus
IFC and the World Bank Group
2
IFC: Over $97 Billion Invested Since 1956
• Largest multilateral source of loan/equity financing for the emerging
markets private sector
• Founded in 1956 with 184 member countries
• AAA-rated by S&P and Moody’s
• Equity, quasi-equity, loans, risk management and local currency products
• Takes market risk with no sovereign guarantees
• Promoter of environmental, social, and corporate governance standards
• Resources and know-how of a global development bank with the
flexibility of a merchant bank
• Holds equity in over 756 companies worldwide, 185 of which are funds
3
IFC Committed Portfolio by Region, FY13
4
Total Portfolio: $49.6 Billion, of which $7.4 Billion in SSA
Sub-Saharan Africa 16%
Europe & Central Asia 22%
Latin America & the Caribbean
22%
East Asia & the Pacific 16%
Middle East & North Africa
12%
South Asia 11%
Global 1%
IFC’s Own Account, as of June 30, 2013
IFC’s Three Businesses
IFC
Investment
Services
IFC
Advisory
Services
IFC Asset
Management
Company
Loans
Equity
Other forms of
financing
Resource
Mobilization
Advice
Problem-solving
Training
Wholly owned
subsidiary of IFC
Private equity fund
manager
Invests third-party
capital alongside IFC
5
Infrastructure (INR)
Physical Infra
Power, Transport, Water,
Utilities, Extractives, TMT,
Oil & Gas
Social Infra
Health, Education,
Manufacturing Agri
& Services (MAS)
Primary production
Processing
Food Retail
Refinery/ Petrochemicals
Infra funds
Agri
Infra
Financial Markets (FM)
Inclusiveness Access to Finance
Farmers, Micro, SMEs,
Insurance, Housing, Mobile
Solutions
Capital Market Development
IFC’s Three Industry Groups
Fragile & Poor
IDA Countries
Climate
Change &
Standards
Investment
Climate
South-South
Partnerships
&Regional
Projects/Programs
Principal Areas of Focus Cross-cutting Themes
7
…with proximity to our clients
IFC Hub Offices
IFC Country Offices
ATLANTIC
OCEAN
Mediterranean
Sea
INDIAN
OCEAN
Johannesburg Maputo
Antananarivo
Lusaka
Freetown
Nairobi Kigali
Douala
N’Djamena
Lagos Accra
Ouagadougou
Abidjan
Dakar
Cairo Amman
Jerusalem Beirut
Algiers
Rabat
Sana’a
Dubai
Monrovia
Kinshasa
Addis Ababa
Dar es-Salaam
Bujumbura
Bamako
Bangui Juba
Tunis
Abuja
Conakry
Infra
A2F
AGRI/M&S
Africa Committed Portfolio
8
INR 35%
MAS 27%
FM 38%
IFC’s Own Account, as of June 30, 2013
Risk MGT 1%
Guaranty 12%
Loan 52% Quasi Equity
1%
Quasi Loan 12%
Equity 22%
Committed by Industry Group Committed by Product
Africa Committed Portfolio (cont’d)
9
IFC’s Own Account, as of June 30, 2013
Committed by Country (US$ m) 1
,46
1
1,3
34
90
0
84
9
70
2
22
0
19
1
18
2
16
7
13
2
12
5
11
3
10
8
10
3
96
75
72
62
62
54
42
39
36
28
27
25
24
23
22
20
19
15
13
11
8
6
5
5
3
3
3
1
0
0
0
200
400
600
800
1,000
1,200
1,400
1,600
Afr
ica
Reg
ion
Nig
eria
Sou
th A
fric
a
Gh
ana
Ken
ya
Uga
nd
a
Gu
inea
Co
te D
'Ivo
ire
Cam
ero
on
Mau
rita
nia
Togo
Mo
zam
biq
ue
Mau
riti
us
Tan
zan
ia
East
ern
Afr
ica
Reg
ion
Sen
egal
An
gola
Zam
bia
Wes
tern
Afr
ica
Reg
ion
Eth
iop
ia
Rw
and
a
Sou
ther
n A
fric
a R
egio
n
Mal
i
Ch
ad
Mad
agas
car
Mal
awi
Ben
in
Bo
tsw
ana
Bu
rkin
a Fa
so
Seyc
hel
les
Co
ngo
, Dem
ocr
atic
Rep
ub
lic o
f
Lib
eria
Cen
tral
Afr
ica
Reg
ion
Bu
run
di
Gam
bia
, Th
e
Nam
ibia
Sou
th S
ud
an
Sier
ra L
eon
e
Co
ngo
, Rep
ub
lic o
f
Cen
tral
Afr
ican
Rep
ub
lic
Swaz
ilan
d
Nig
er
Zim
bab
we
Sud
an
Strong macroeconomic trends set to continue…
11
2.6
2.2
5.5
5.2
5.7
0
1
2
3
4
5
6
Real Growth in GDP Annual Average % change
16.9
27.4
10.1 8.6
6.0
0
5
10
15
20
25
30
Inflation Annual Average % change
Robust growth Lower inflation FDI ex. RSA at new peak
9.2
12.2
10.1
12.0
13.9
21.6
26.8
29.4
26.6
33.1
34.0
0
5
10
15
20
25
30
35
40
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
FDI Inflows into SSA ex. RSA US$ billion
0
20
40
60
80
100
ICT Irrigation Power Transport Water and Sewage
Total
Africa Infrastructure Spending Needs vs Estimate($ billion, annual)
Spending Estimates - Public Spending Estimates - PrivateTotal Needs (Capex + Maintainance)
…yet major challenges remain to be resolved
Infrastructure Gap Soaring Food Demand
Low Access to Finance Fragile States; Weak Private
Sector
1981 1984 1987 1990 1993 1996 1999 2002 2005 35
60
40 45 50 55
65
Countries with major violence Countries with minor violence Countries with negligible or no violence
between conflict–affected and other countries Widening poverty gap
Source: WDR calculations based on Chen, Ravallion, and Sangraula 2008 poverty data
14
Some key clients By Sectors
Power
Renewable Energy Utilities and
Gas
Transport
vuelavuelavuelavuelavuelavuela
New Global Sponsors Expected to be Key Players
in Emerging Markets Power
15
Emerging markets countries are originating significant global players
Global Sponsor
Home
Country
Selected International Countries
of Operation Total Assets (US$bn)
China Laos, Nepal, Pakistan, Sudan,
Mozambique $62
Brazil Argentina, Nicaragua, Uruguay $64
Russia Armenia, Georgia, Kazakhstan, Lithuania,
Moldova, Turkey $16
China Brazil, Cambodia, Indonesia, Vietnam $375
India Indonesia, Mauritius, South Africa,
Vietnam1 $781
Source: Company filings and websites, GlobalData 1 Countries based on Tata Power operations. Total assets represent assets for Tata Group.
16
Our projects: a snapshot
Africa
•Mix of global sponsors and regional / local leading companies;
• Senior debt, subordinated debt and equity.
Senegal
Dakar Toll Road
A Loan: €10 million
C Loan: €11 million
Parallel loans: €40
million
Lender
November 2010
Equity: $800,000
Senegal
Shareholder
June 2011
Comasel Louga
A Loan: $125 million
Parallel loans: $220
million
Côte
d’Ivoire
Azito Phase 3
Lender
October 2012
Cameroon
A Loan:€64 million
Parallel loans: €70
million
Mandated Lead
Arranger
December 2011
KPDC
South Africa
Abengoa Khi Solar One
A Loan: $57 million
Parallel loans:$220
million
Blended Finance:$15
million
Mandated Lead
Arranger
November 2012
C Loan: $12 million
Kenya
KPLC
A Loan:$50 million
Lender
August 2012
Equity:$24 million
Kenya
Shareholder
April 2012
Kenya Airways
Kenya
Thika Power
A Loan: €28 million Parallel loans: €56
million
Lender
May 2012
Equity: $4 million
Rwanda
Lake Kivu IV
Shareholder
November 2009
Lender
March 2010
A loan $25 million
Corporate Loan
AKFED Aviation
Africa Region
Lome Container
Terminal
A Loan: €85 million
Parallel loans: €170
million
Lender
June 2011
Togo
A Loan:$25 million
Equity:$10 million
Uganda
Lender/Shareholder
June 2009
November 2012
Umeme Ltd
18
Dakar-Diamniadio Toll Road
• A 30-year develop, build, finance and operate concession of a 25 km toll road from Dakar to Diamniadio
• Sponsor: Eiffage
• Total Project Cost: EUR230 m
• Closing: November 15, 2010
• IFC Role: Global Coordinator & lead financier
Tranche Product Amount Tenor
A Loan Senior Debt
IFC’s Account
EUR12.5
million
15 years
C Loan Subordinated Debt
IFC’s Account
EUR10 million 15 years
Parallel
loans
Senior loans EUR37.5
million
13.5-15
years
Co-financiers
Project Description
19
IFC Added Value
September/November 10 July 10 April 10 Feb 10
Board Approval
Financial Closure
Commitment
Credit Approval
Legal
Documentation
Appraisal
Negotiations Initial Discussion
Management
Committee Approval
Mandate Letter
1) ‘Making the Cash Flow Work’: (i) Long Tenor Senior Debt Tranche (15 years); and
(ii) 15-y Subordinated Loan with a 10-year grace period
2) Strengthening the Concession Contract
3) Dealing with traffic risk
4) Dealing with Environmental & Social Issues (≈ 30,000 people to relocate)
5) Identifying and fixing issues specific to the local context based on past experience
6) Creating a momentum, fixing issues and reaching closing under a tight time schedule
Completed in eight months door-to-door: a record for such a complex, first of its kind
deal
20
Contour Global Togo
•Project: a 100 MW tri-fuel (Heavy Fuel Oil/Gas/Diesel)
thermal power plant on a 25-year Build Own Operate
Transfer concession
• Total Project Cost: $190 million
• Closing: March 31, 2010
• IFC Role: subordinated lender and shareholder
•Co-financier: OPIC
• IFC’s Value Addition:
1) Engaging the Government of Togo on the broader Togolese electricity sector jointly with the World
Bank and other Development Finance Institutions
2) Leading structuring and negotiations
3) Making the cashflows work by providing a mix of equity and subordinated debt
Co-financier
Project Description
21
TAV Tunisia
Project Description
• Build a new airport at Enfidha, with an initial
capacity of 7 mmpa, rehabilitate the existing
airport at Monastir (3.5 mmpa capacity) and
operate both under a 40-year concession
• Total Project Cost: EUR560 million
• Closing: April 24, 2008
Existing airport at Monastir
Airports in North EastTunisia
Tranche Product Amount Tenor
A Loan Senior Debt
IFC’s Account
EUR105 million 20 years
B Loan Senior Debt
Syndicated *
EUR265 million 14 years
C Loan Subordinated Debt
IFC’s Account
EUR30 million 20 years
* Mandated Lead Arranger: ABN AMRO, SOCIETE GENERALE, STANDARD BANK
22
IFC Added Value
April – May 08 April 08 Mars 08 Feb 08
Financial Closure
Commitment and
First Disbursement
Legal
Documentation
IFC Board Approval
Appraisal
Negotiations
Credit Approval
Initial Discussion
Management
Committee Approval
Mandate Letter
1) ‘Making the Cash Flow Work’: (i) Very Long Senior Debt Tranche; and
(ii) Subordinated Loan with a 15-year grace period
2) Strengthening the Concession Contract
3) Mitigating country related/political risk
4) Creating a momentum, fixing issues and reaching closing under a tight time schedule
Completed in three months:
IFC’s Innovate Corporate Facilities Products Help to Meet
Emerging Markets’ Financing Needs During Uncertainty
IFC offers a broad range of “corporate-style” financial products that are not limited-recourse or project-
specific financing/“project-finance” loans
24
Illustrative Examples of IFC Corporate Facilities
The Borrower is an Operating Parent Company, i.e. an operating entity with robust operating
revenue/cash-flow on an un-consolidated/stand-alone basis. The loan proceeds are to fund its
projects directly or to on-lent to or invest in its product subsidiaries respectively as shareholder’s
loan or equity.
The Borrower is a holding company whose revenues are solely from dividend distributions from its
subsidiaries. The loan proceeds are to be on-lent to or invest in its project subsidiaries as
shareholder’s loan or equity respectively to fund their projects which will be project-financed.
The loan may or may not be supported by the Parent Guarantee.
The Co-Borrowers are (a) the Holding Company to be either in existence or created for
undertaking a portfolio of projects through its project subsidiaries and (b) the project
subsidiaries. To be supplemented by a Parent Guarantee which will be phased out as each project
reaches Project/Financial Completion.
The Borrower can be either the Operating Parent Company or the Holding Company, whose assets
are primarily in the emerging economies (i.e., IFC eligible countries). The cash proceeds can be
used as a liquidity cushion and/or working capital purposes and/or a cash collateral for bid,
performance, or LD bonds (or L/Cs). Still at a pilot stage.
As above; but, IFC is to provide a Risk Sharing Facility to commercial bank(s), the Issuing Banks
(i.e., a partial guarantee up to, say, [40%] of total amount) that will issue bid, performance, or LD
bonds (or L/Cs) on behalf of the Client to the beneficiaries in the emerging economies. When
the bond or the L/C is drawn and the Client fails to pay the equivalent amount to the Issuing
Banks, IFC pays the Issuing Bank its guaranteed portion which becomes an IFC loan to the Client.
Still at a pilot stage
IFC
Corporate
Facilities
Fund
Working
Capital,
Bonds, etc.
Fund
Projects
Corporate Loan
Mezzanine Loan
“Hybrid”
Portfolio Loan
Medium-term
Loan
Risk Sharing
Facilities