frontier markets fund managers by orli arav
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Frontier Markets Fund Managers
Orli Arav
Senior Investment Advisor
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Private Infrastructure Development Group - PIDG
PIDGU.K. SWEDEN NETHERLANDS SWITZERLAND AUSTRIA WBG
GUARANTCOTAF
EAIF ASPIFF
INFRACO
FMFM
Management Agreement
Management Agreement will be signed soon
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- FMFM- FMFM
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Frontier Markets Fund Mangers -FMFM
A Fund Management Team Managing transactions for
– Emerging Africa Infrastructure Fund; and– GuarantCo
A group of multi nationals fluent in English; French; Dutch; Italian and Russian
Based in London
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- EAIF- EAIF
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Emerging Africa Infrastructure Fund - EAIF
First dedicated debt fund for sub-Saharan Africa Size: US$305 million, refinanced to US$360 at the end of
2006 Original sponsor: UK Government – DFID 3 other European Governments joined (Sweden,
Netherland, Swiss) Debt from three development finance institutions and two
private sector international banks Public/private sector partnership Donor aid funds leveraged private sector capital for
development purposes First multi-donor initiative by Private Infrastructure
Development Group (PIDG)
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EAIF – investment policy
Lend to private sector owned, managed and controlled entities with infrastructure sector focus
– Power– Transport– Telecoms– Water– Manufacturers of components of infrastructure e.g. cement– Infrastructure within mining, agribusiness projects
Sub-Saharan Africa focus excluding Mauritius Investment Size:US$10 -36 million Tenor: up to 15 years Instruments: Senior and Mezzanine Debt (possibly with equity features) Dose not require a Political Risk Insurance (PRI)
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EAIF - sample transactions
Project: Ethiopian Airlines Sector: Transport Country: Ethiopia Description and Financing
Parameters:– this is a unique project, EAIF has
committed a US$ 36 million loan to the airline expansion project.
– Ethiopian Airlines is a 100% publicly-owned entity often held up as a model business for other airlines in Africa.
– The EAIF financing is bridging a crucial gap enabling the airline to purchase additional, new aircraft at a cost of US$ 460 million.
Project: Celtel Nigeria Sector: Telecoms Country: Nigeria Description and Financing
Parameters:– EAIF has committed a US$ 35
million loan to Celtel Nigeria, the third largest mobile operator in Nigeria.
– The financing is part of a US$ 350 million financing package for the expansion and upgrading of their entire network.
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EAIF - sample transactions (contd’)
Project: Moma Sector: Mining Country: Mozambique Description and Financing Parameters:
– The developers of this titanium mineral sands project approached EAIF as a ‘lender of last resort’.
– Located in one of the most under-developed regions of Mozambique, the US$ 413 million project is the second lowest cost producer of titanium in the world.
– EAIF committed US$ 24.5 million of senior and subordinate debt (total debt package of US$270 m
– illion) as Senior and Subordinated Lender. The project received deal of year awards from both the Mining Journal and Project Finance International publications.
Project: Mnazi Bay Energy Sector: Power Country: Tanzania Description and Financing Parameters:
EAIF arranged US$ 35 million – This is the first integrated utility project in
Sub Saharan Africa, the project includes:– the development of an existing
natural gas reserve; – the construction, operation and
maintenance of a pipeline and gas processing facilities;
– the installation, construction, operation and maintenance of a power plant;
– the upgrade, operation and maintenance of a transmission and distribution system
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GuarantCo
Credit enhancement of local currency debt issuance by the private, municipal and Parastatal infrastructure sectors in lower income countries
Covers similar infrastructure sectors to EAIF Operates globally
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GuarantCo offers
Guarantees covering default risk on underlying debt service - partial credit guarantees
Guarantees covering default risk due to specific events - partial risk guarantees
Cover for senior, mezzanine or sub debt; maturity, coupon or principal strips, carbon credits
Other methods of risk transference e.g. insurance / reinsurance or CDS / derivatives
Preference for risk sharing (defined on a case-by-case basis) Acceptance of certain local currency risks
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GuarntCo - sample transactions
Celtel Kenya
Partial Credit Guarantee (75%) of
a $50m equivalent 5 year bond
issue for network expansion. Only
the third commercial bond issued
in Kenya and largest at that time
– Closed Dec 05.
– Refinanced in Feb 07 without
credit enhancement
Celtel Tchad 100% guarantee of $14m equivalent
bank loan. Local lenders, Afriland
First Bank and BDEAC, also lent
$20m equivalent without guarantee
– Closed April 2007
– Network expansion to more
rural areas, which will aid both
local communities and the
significant nomadic population
in Chad
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TECHNICAL ASSITANT FACILITYTECHNICAL ASSITANT FACILITY
- TAF- TAF
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We can provide TAF funding
TAF provides grant funding to support the following activities; Infrastructure development strategies
– studies intended to guide governments on options for financing of infrastructure
Policy, regulatory and institutional reforms – advice and training on the design and implementation of specific reforms
aimed at facilitating infrastructure financing by the private sector Pioneering or pilot transactions
– support for the design and implementation of particular projects or transactions that are pioneering in some important respect or reflect some measure of innovation
Capacity building– activities aimed at building government capacity and/or the capacity of
local capital markets, financial institutions, and/or quasi-public enterprises
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Infrastructure projects financed or in the process of financing by FMFM(*)
* In Sub Saharan Africa
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An example of companies we worked and are working with
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Contact details
Orli Arav
Senior Investment AdviserFrontier Markets Fund ManagersT: +44 (0) 20 7815- 2782M: +44 (0) 77254 - 29177E: [email protected]