Transport & Logistics – EBRD financing

Houda Lahrech

CGEM, Casablanca, 2 May 2017

Agenda

2

• EBRD overview

• EBRD in the Transport sector

• Why transport

• Our vision in the transport sector

• How to deliver sustainable transport

• Logistics: area of increasing focus

• Why sustainable logistics

• Solutions for Green Logistics

• Barriers

• Examples of tools available

EBRD in a snapshot

• IFI to promote transition to market

economies in 36 countries;

• Over 117 € bln invested in 4,700+ projects

since 1991;

• 9.4 € bln invested in 400 projects in 2016;

• Owned by 65 countries and two

intergovernmental institutions (AAA rated);

• HQ in London, it has 36 regional offices;

• Across all business sectors (Infrastructure,

Energy, Industry & Agri, Financial

Institutions, etc.)

• Private sector oriented (80%)

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Industry Commerce & Agribusiness

17%

Energy21%

Infrastructure29%

Financial Institutions

33%

€ 1.2 bn

EBRD’s Activities since 2012 in Morocco

4

EBRD’s portfolio (1) EBRD’s activities

• Financing capabilities in hard & local currency for

debt & equity investments

• Indirect & Direct Financings:

✓Credit lines with Moroccan banks (TFP, MORSEFF,

SME)

✓ Limited Partner Investor in Equity Funds

✓Flexible financings tailor-made to the project’s

needs (Senior debt, Project finance,

Fixed/Floating rates)

✓Anchor investor in Bonds

• Financing SME, Family Group & International

Sponsor

• 300 Technical Assistance projects

• Supported Innovative financing structures

• Promoted “Green” investments

• € 1.2 bn invested since 2012

✓€ 920 m invested in 32 projects

✓€ 250 m for Trade Finance credit lines

• Investments from € 3 m to € 200 m across FI,

Infrastructure, Energy & ICA

(1) Based on signed transactions as of 31/12/2016. TFP: Trade Finance Programme.

EBRD in the Transport Sector

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Over EUR 13 billion invested in 270+ projects

Why Transport?

• Safe and efficient transport networks fundamental to

economic growth and well-functioning markets

• Infrastructure gap

• Severe constraints on public budgets: Private sector

participation is key

• Emphasis on regional integration: Increased risk of cross-

border projects

• Sector reforms needed

• Innovation and multimodality are crucial for sustainable

development

• Transport is fundamental to deliver climate policies

(COP22): only major sector in the EU where GHG missions

are still rising.

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Our vision in the Transport Sector

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“EBRD promotes and finances safe, secure and sustainable transport systems across the region which embody market principles” (Transport Strategy)

Areas of increasing focus:

• Sustainable Transport: Energy Efficiency, Gender Inclusion, Road Safety

• Logistic Development & Intermodal Transport

• Small Business Initiative

Traditional strategic approach:

• Transition gaps: Sector reform and Private Sector Participation, Market Orientation, Commercialisation, Financial Sustainability, Corporate Governance

• Bridging infrastructure gap: regional integration and trade facilitation

+

How to deliver Sustainable Transport?

• Improve business environment and

regulatory framework

Stakeholder engagement (eg. IFIs,

CAREC, TRACECA, etc.)

• Wide range of

financing instruments

for public and private

clients

• Risk mitigation –

catalyst (IFI status)

• Mobilize EU and

climate funds

Projects & Investments

Technical Cooperation

Policy Dialogue

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• Over EUR 20 mln p.a.

mobilized to support

sector reforms and

challenges

• TCs for project

identification (eg.

Energy Audits) and

preparation (IPPF)

Logistics: Area of increasing focus

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Over the last 5 years the EBRD has invested €2billion

in 35 Projects about Intermodal Transport & Logistics

The demand for freight transport is growing and the Bank

aims to bridge the infrastructure gap and facilitate the

sustainable development of the sector:

• Logistics Centres

• Intermodal Terminals

• Road Fleet modernization

• Port Development

• Rolling stock and railcars

• Short-Sea Shipping & Inland River Transport

• Capital markets and financial restructuring (IPO,

private placement, etc)

• Modernization and Green Logistics

• About 2,800 million tonnes CO2 p.a. caused by

logistics sector;

• Carbon emissions are forecasted to grow at 2.3% p.a.

until 2050

• Despite improvements, energy intensity in the EBRD

region remains on average over three times higher

than in the EU

• High and volatile energy costs as an obstacle for

competitiveness

• Pressure from clients, requiring stronger

environmental performance and stricter reporting

• Pressure from policy makers and stakeholders aiming

for modal shift to rail

Why Sustainable Logistics?

Time for Action

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11

Solutions are out there

Eco-driving

Electric handling equipment

BMS, insulation,

cogeneration, etc.

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Intermodal solutions

CNG, aerodynamics,

low rolling tires, etc.

New generation

railcars

LED lighting

ITS systems

12

Barriers for Sustainable Logistics

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• Lack of local financing for early

movers

• Inadequate policies and tax

disincentives

• Lack of information (or

sometimes too much

information!)

• No MRV carbon footprint

systems implemented to

understand the results and

impact of measures

• Changeable policy environment

• Misunderstanding of risks (too

much focused on construction)

• Weak standards of corporate

governance

• Few trained and skilled

professionals on Sustainable

Logistics, both in public and

private sector

• Low of penetration of

solutions and suppliers

• Infrastructure gap! Lack of

pipeline of projects

• Unsuitable appraisal

methodologies

Examples of tools available:

Donor funded TC available

13

Over EUR 20 mln mobilized from our donors to support

our clients.

Some examples:

• Detailed energy audit to identify opportunities for EE

(terminal modernization, handling equipment, etc.);

• Feasibility Studies of new products and services

• Sector reform

• Capacity Development, training, etc.

• Environmental Management Systems,

• Road Safety Management,

(etc.)

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Examples of tools available:

Green Logistics Programme

• Funded by EBRD and Global Environment Facility (GEF): 16 mln USD

• Programme to facilitate implementation of innovative practices and technologies in the sector

• Components:

• Concessional finance. Subject to eligibility criteria (carbon savings, BAT,

governance practices, etc.), the facility can cover up to 35% of the loan at

LIBOR+75bps in Mediterranean and Black Sea Countries (non-EU)

• Projects also benefit from donor funded Technical Assistance to prepare

and implement green solutions

• Policy Dialogue: GLP will partner with professional institutions to transfer

skills about Green Logistics in the region (certified training programmes)

and develop transparent MRV methodologies

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1- Eligible countries: Albania, Armenia, Azerbaijan, Belarus, Bosnia, Egypt, FYR Macedonia, Georgia, Jordan, Moldova, Montenegro, Morocco Serbia, Tunisia, Turkey, Ukraine

2 – Subsectors: Logistic terminals/centres, ITS, Road fleet modernization, Port development, Short sea shipping, Inland river transport, Rail rolling stock

• EBRD is working with local banks to offer a Green Transport Line in

Morocco

• Transport sector needs financing for fleet renewal. The idea is to offer a

new dedicated product taking in consideration sector characteristics

thanks to a package including financing and technical assistance.

• Part of the line will benefit from the GLP concessional funding

• We are currently talking with the banks and we intend to share the

progress of the project and discuss it with you

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GEF EBRDMoroccanBank

Borrower

Examples of tools available:

Green Transport Line

Examples of tools available:

FinteccFinance and Technology Transfer Centre for Climate Change

• Funded by Global Environment Facility (GEF) and EU

• FINTECC is a programme that helps companies in Kazakhstan, Ukraine, Early Transition

Countries and SEMED1 to implement innovative climate technologies with low penetration.

• Components:

• Donor-funded technical audits to evaluate opportunities

• Incentive fees for private companies to introduce eligible technologies

(grants for up to 25% of the eligible costs, capped at 0.5 mln EUR)

• Policy support on a range of policy topics

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http://fintecc.ebrd.com/index.html

1- Early Transition Countries: Armenia, Azerbaijan, Belarus, Georgia, Kyrgyz Republic, Moldova, Mongolia, Tajikistan, Turkmenistan and Uzbekistan

SEMED: Morocco, Tunisia, Jordan, Egypt

Annexes

Case Studies

17

a

a

18

Client: Kazakhstan Temir Zholy, National Railways

Company (KTZ)

EBRD

finance:

Eurobond issue

Total Project

cost:

CHF 285 million

Year: 2014

Project

description:

Development of a logistic hub to attract additional

transit cargo traffic to the country (China-EU route)

Impact: • Development of vital infrastructure to facilitate

Eurasian connectivity by rail

• TC support to improve corporate governance

and management practices of KTZ’s logistics

operator JSC KTZ Express,

• TC to help KTZ Express to structure a pilot

logistic hub with the private sector participation

KTZ Dry Ports, Kazakhstan

a

a

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Client: EKOL Lojistik, A.S.

EBRD finance: Senior loan EUR 12 million

Total Project

cost:

EUR 30.0 million

Year: 2012

Project

description:Acquisition of three Ro-Ro Vessels to provide Short

Sea Shipping between Haydarpasa (Turkey)

and Trieste (Italy)

Impact: 50,000 + trucks shifted from road to sea per

annum (thus saving 19,000 ktonnes CO2)

Adoption of best practices to raise the standards

of the Turkish shipping industry: ISO 50000, ISO

14000, and Safety & Disaster Response Plan

Ekol Ro-Ro services, Turkey

a

a

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Client: Inpost

EBRD finance: EUR 10 mln

Total Project

cost:

EUR 82 million

Year: 2014

Project

description:

Participation in IPO. Expansion of Automated Parcel

Collection Network (4,000 lockers)

Approach: Significant environmental benefits: 30 k tonnes CO2

p.a. compared to traditional delivery to door. With

EBRD support, the company will also:

Develop carbon neutral courier services

Develop of carbon reporting system in line with EN

16258 principles and GHG Protocol.

Implement Road Safety System (ISO 39001) and

Environmental Management System (ISO 14001)

Increase gender diversity at senior positions

Case Study

InPost, Poland

a

a

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Client: Akel Logistics: Provider of point-to-point transport

services throughout Turkey primarily in food & beverage

and related sectors

EBRD finance: Senior Loan EUR 4.4 million

Total Project

cost:

EUR 4.4 million

Year: 2013

Project

description:Working capital financing and development of two

logistics centres

Impact: Provision of integrated logistics solutions combining

warehousing services with point to point logistics and

transportation solutions

Improving corporate governance, including

simplification of ownership structures, adoption of

IFRS accounts, and first time audit

It was structured through Local Enterprise Facility, a

vehicle for investments in small and medium-sized

enterprises (SMEs);

Akel Logistics, Turkey

Contacts

22

David Allan, Principal Banker

Tel.: +44 20 7338 8789

David.allan@ebrd.com

Houda Lahrech, Associate Banker

Tel.: +212 5 22 64 91 72;

GSM: +212 6 31 00 08 70

Houda.lahrech@ebrd.com