ebrd in latvia · 7 ebrd and latvia (1) results of active operation • ebrd closed its office in...
TRANSCRIPT
Riga
March 2012
© European Bank for Reconstruction and Development 2010 | www.ebrd.com
EBRD in Latvia
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What is the EBRD
AAA/Aaa rated multilateral development bank
Founded in 1991
Owned by 62 shareholders – 60 states, EU and EIB
Invested over €71 billion in more than 3,600 projects since 1991
Record year in 2010 - €9.0 billion invested in 386 projects
In 2011 €9.0 billion in 380 projects 77% in the private sector Debt 85% and Equity 15%
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1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
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sin
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(A
BV
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lativ
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Debt ABV Equity ABV Net Cumulative Business Volume
Note: Provisional data as at 30th June 2011
€ billion
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Annual Business Volume 2011 by Region
Russia
33%
Central Europe &
Baltics
15%
Turkey
10%
Central Asia
5%
Eastern europe
& Caucasus
20%
South-Eastern
Europe
17%
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A network of 33 offices in 29 countries
More than half our bankers based in the region
Where we operate
** Expansion of the Bank’s region of operations to include Southern and Eastern Mediterranean, initially Egypt, Morocco, Tunisia and Jordan
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How EBRD adds value
Private sector focused
Wide product range, currency, tenors, innovative financing programmes
Local presence in almost all countries of operations, detailed understanding of local business environment
Involved in policy dialogue with regard to regulatory, investment and policy matters
Work with locally owned companies as well as cross border investors
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EBRD in the Baltics
Annual Business Volume
Baltics 1999 - 2011
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50
100
150
200
250
€m
illi
on
Lithuania 64 108 83 5 26 52 19 21 31 0 29 99 2
Latvia 32 49 34 9 37 3 27 0 21 0 115 104 19
Estonia 49 57 24 73 27 23 8 0 11 1 28 8 20
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
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EBRD and Latvia (1)
Results of active operation
• EBRD closed its office in Riga at the end of 2007, but has remained engaged here.
• Since 1991 EBRD invested EUR 572 million in Latvia in 76 projects of total project value EUR 1.88 billion
• 65 % of the investments have been in the private sector
• Current portfolio represents EUR 271 million in 6 projects with Latvian entities (and 23 regional projects having allocations into Latvia)
• EBRD has invested through equity funds in Latvian 19 companies and is still invested in 8
Portfolio Distribution, €million
Financial
Institutions,
100.2Infrastructure,
16.5
ICA, 6.0
Regional, 44.3
Power and
Energy, 104.7
Cumulative Business Volume in Sectors
Infrastructure
26%
Power and
Energy
15%
ICA
20%
Financial
Institutions
39%
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EBRD and Latvia (2)
EBRD prepared to
• Enhance capital investment
• Help develop more technology and skill-intensive products
• Support export-oriented manufacturing and cross border investments
• Finance renewable energy generation
• Strengthen the stability of the financial sector
• Support the development of private equity financing
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EBRD Financing Solutions
• Senior, subordinated, convertible
• Long Term
• Working capital • Floating/ Fixed interest
rates • Major currencies and
some local currencies (e.g. Romania, Russia, Poland)
• Political risk guarantees
• Common/preferred shares
• Mezzanine financing
• Exclusively minority participations (up to 35%)
• “Portage Equity”
• In-house syndication unit
• Lender of record
• EBRD’s Preferred creditor status attracts other financiers
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Syndication Equity Loans
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Financing requirements How to obtain finance?
EBRD Key Financing Requirements
Ensure appropriate returns by
carefully assessing the risks:
Management strength and strategy
Clear business plan and project
costs
Transparency of operations
Disclosed identity of final
shareholders and corporate structure
Identified and limited tax liability risk
Recourse to subsidiaries generating
profits and holding assets
Provide EBRD with an overview of
proposed investment
Commitment to cooperation
clarify role of EBRD
mandate to initiate transaction
mutual understanding of
corporate integrity issues
Project / business plan, market
analysis, strategy, ownership
structure, financial analysis, risk
assessment
Exit strategy
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Examples of Cross Border Investments within
the EBRD Region
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E Energija into Latvia and Ukraine
• Client: E Energija, a Lithuanian, privately owned multi-utility energy company providing heat and hot water services to residential and industrial customers in Lithuania and Latvia
• EBRD Finance: €5 mn equity and €15 mn debt
• Use of Proceeds: To support the company’s expansion in Ukraine and energy efficient investments in Latvia and Lithuania
• EBRD Added Value: country knowledge, local presence, risk sharing (equity), policy dialogue
Signed in 2011
Signed in 2007
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VMG into Belarus
•Sponsor: Vakaru Medienos Grupe, a Lithuanian privately owned wood- processing company with a long history of co-operation with IKEA
•EBRD Finance: Senior loan of €19.5 million and subordinated loan of €6.5 million
•Use of Proceeds: To finance the development of a green-field, integrated wood processing complex in Mogilev FEZ
• EBRD Added Value: Political, encouraging FDI into Belarus, needed maturities not available in commercial market, subordinated feature
•Associated TC: Energy audit and a ‘Belarus Forestry Sector Study’ Signed in 2011
Signed in 2011
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SBA into Belarus
• Client: Mebelain, a wholly owned subsidiary of Lithuanian SBA Furniture Group
• EBRD finance: Senior loan of €5 million
• Use of proceeds: to finance a green-field veneer-faced furniture plant in Mogilev FEZ
• EBRD Added Value: Political, encouraging FDI into Belarus, needed maturities not available in commercial market Signed in 2012
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Graanulinvest into Latvia
Client: Graanulinvest is an Estonian
privately owned pellet producer
Project description: Construction of two
CHPs adjacent to the company’s pellet
plants in Helme and Launkalne and energy
efficiency investments in the pellet plants
EBRD Finance: A loan of €34 million,
maturity 12 years
EBRD Value Added: long maturity,
supporting renewable energy and a privately
owned energy producer in Estonia and
Latvia
Signed in 2011
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Eskaro into Russia and Ukraine
Signed in 2011
Client: Regional manufacturer of architectural
coatings (paints and varnishes) with plants in
Estonia, Russia, Ukraine, Belarus and Finland
Project description: Construction of new
distribution centres in Russia and Ukraine;
completion of a new manufacturing plant in
Ukraine;
EBRD Finance: Equity investment of €1.25
million and mezzanine loan of €4.75 million
EBRD value added: Supporting further regional
expansion into the CIS of an originally Estonia-
based company and strengthening of
environmental standards in particular in the CIS
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Trade Facilitation Programme
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EBRD Trade Facilitation Programme - TFP
EBRD supports trade by providing
• guarantees that cover risks arising from trade finance
transactions
• short-term advances/financing to banks in the Countries of
Operation for trade finance purposes
• TC funded trade finance training and advisory service to
local banks
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TFP - Two Main Components
Trade Facilitation Programme
(EUR 800 million framework)
Trade Finance
Guarantee
Facility
(fully operational
since 1999)
Trade Finance
Cash
Facility
(launched in 2000)
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Buyer Seller
Banking Instrument
Application Confirmation
EBRD issues a Stand-By
Letter of Credit covering
the risks of Issuing Bank
towards the Confirming bank
Obligation Issuing Bank,
Country of Operation
Obligation Receiving
Bank,
World Wide
Underlying
Trade Transaction
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TFP – Cash facility
Local Company
Local Bank (EBRD’s borrower)
•Takes local company risk
•Borrows from EBRD
•On-lends to the local company
EBRD
•Takes local bank risk
•Lends to the local bank against
sub-loan reports
Loan repayment Loan disbursement
Repayment to EBRD EBRD’s disbursement
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Trade Facilitation Programme in numbers
• Active Issuing banks: 102
• Confirming Banks: 800+ in 77 countries
• Since 1999, more than 11,600 transactions
• Supporting €7.8 billion trade volume and
• Effectively covering €7.1 billion worth of trade finance.
Latvia in particular:
– 24 export transactions from and via Latvia totalling € xxx million
– 3 Latvian Confirming Banks (as of January 2012)
SEB
Swedbank
Unicredit
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Contact details:
Viesturs Bernans
Phone: +370 5 2638502
E-mail: [email protected]
Matti Hyyrynen
Head of Baltics
Phone: + 370 5 2638480
Fax: + 370 5 2638481
E-mail: [email protected]