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Mobilizing Investment

Kelle Bevine – IDB/Private Sector Dept. October 26, 2006

IDB: Financing with the Private Sector

Coverage: Project Finance Corporate Finance Capital Markets Trade Finance

Presence in the Market: Operations in 15 countries & a regional fund 71 projects closed in financial markets US$17.8 billion of new investments US$2.7 billion of direct financing US$2.9 billion of commercial participations More than 80 banks and institutional investors

Date of Creation: 1995

IDB has achieved highly catalytic results

IDB Approved amount$4,935 million

Total Project Costs$26,183 million

IDB Approved Amounts and Total Project Costs (cumulative 1995-2006)

Mobilization ratio of total project cost is 5.3 times amount of IDB participation

B u i l d i n g p h y s i c a l & fi n a n c i a l i n f r a s t r u c t u r e t o i n c r e a s e t h e r e g i o n ’ s c o m p e t i t i v e n e s s & j o b c r e a t i o n – e x a m p l e s o f t a n g i b l e r e s u l t s f r o m I D B p r i v a t e s e c t o r p o r t f o l i o

I D B T r a c k R e c o r d

E l e c t r i c i t y g e n e r a t i o n 2 3 1 0 , 3 0 0 M W 6 0 m i l l i o n b e n e f i c i a r i e s $ 6 . 6 0

t r a n s m i s s i o n 1 3 1 1 4 , 0 0 0 k m 9 8 , 0 0 0 M W i n c r e a s e d c a p a c i t y $ 3 . 7 0

T r a n s p o r t a t i o n t o l l r o a d s 1 0 9 7 1 k m 1 0 % r e d u c t i o n i n a c c i d e n t s $ 2 . 7 0

W a t e r & S a n i t a t i o n

d i s t r i b u t i o n 43 0 0 , 0 0 0 n e w

c o n n e c t i o n so v e r 1 m i l l i o n b e n e f i c i a r i e s $ 0 . 7 0

C a p i t a l M a r k e t s h o u s i n g 6u p t o 1 m i l l i o n

n e w m o r t g a g e so v e r 4 m i l l i o n b e n e f i c i a r i e s $ 1 . 5 0

S e c t o rS u b -s e c t o r

# o f p r o j e c t s O u t p u t O u t c o m e

T o t a l p r o j e c t c o s t

IDB’s New Business Model adopted in 2006 Non-Sovereign Guaranteed Operations:

Expanding IDB impact in the region:

New clients: state-owned-enterprises, financial institutions, sub-national /municipal entities, & PPPs are now eligible for IDB financing

Expanded Sectors: all sectors now eligible for IDB financing

New Products: refinancing and local currency guarantees

Increased Lending Limits: up to US$200 million/US$400 million*

Streamlined Procedures for improved response capacity

IDB Financing: Products & Parameters

Financial Products:

Syndicated A/B Loan Facilities

Political Risk Guarantees

Local Currency Financial Guarantees

Local Currency Financing options

Financing Parameters:

Project Finance, Corporate Finance, Structured Finance & Trade Finance solutions

New projects, capital expansions and re-financing all eligible

Financing up to 25-40% of total cost for Greenfield transactions

Financing up to 50% in expansions and re-financing

Project limits at US$200 million or US$400 million/exceptional basis

Tenors up to 20+ years

Market-based pricing

PRIVATE SECTOR DEPARTMENTINTER-AMERICAN DEVELOPMENT BANK

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Local Currency Financial Guarantees, typically without recourse to the originator, for:

Mortgage-backed securitizations (MBS), for both residential and commercial mortgages

Future flow securitizations for credit card receivables, trade receivables, etc.

Warehousing facilities for accumulation of receivables (e.g. construction loans)

Structured FinanceStructured Finance

Direct Credit and/or Local Currency Financial Guarantees for on-balance sheet financing via banking and/or bond markets by corporations, financial institutions, or utilities. Structures include issues of secured and unsecured senior and/or subordinated debt

Corporate FinanceCorporate Finance

Direct Credit and/or Local Currency Financial Guarantees for limited recourse off-balance sheet financing via banking and/or bond markets by special purpose companies. Private, Public and Mixed Ownership (PPP) utility companies and project sponsors

Project FinanceProject Finance

Investment FundsInvestment Funds

Trade Finance Facilities (TFFs)Trade Finance Facilities (TFFs)

Unsecured loans to leading financial institutions, for on-lending to importers and exporters. Facilities mobilize commercial bank funding through B-loan participation

First generation of deals focused on largest banks in Brazil; second generation is expanding to smaller banks throughout the region

Debt Financing for private equity funds and real estate investment trusts (REITs)

Debt Financing for investment funds for infrastructure, education, export-based businesses, etc.

IDB Focus: Client Driven Financial Solutions

IDB Financing: Questions & Answers

Questions Raised during July 13, 2006 meeting:

Can IDB provide re-insurance to national development banks?

Can IDB assist in attracting monoline insurers to companies in Latin America?

Additional questions