Islamic Development Banks experience in the Financing Infrastructure - PDF document

UNCTAD 17th Africa OILGASMINE, Khartoum, 23-26 November 2015 Extractive Industries and Sustainable Job Creation Islamic Development Bank’s experience in the Financing Infrastructure in the extractive Industry in Africa By Mustapha Corr Energy and ICT Division, Infrastructure Dept., Islamic Development Bank, Saudi Arabia The views expressed are those of the author and do not necessarily reflect the views of UNCTAD.

The Islamic Development Bank Group Together We Build A Better Future IsDB’s experience in the Financing Infrastructure in the extractive Industry in Africa 1 7 t h U N C TA D A f r i c a O i l , G a s a n d M i n e s Tr a d e a n d F i n a n c e C o n f e r e n c e a n d E x h i b i t i o n 2 3 - 2 6 N o v e m b e r 2 0 1 5 K h a r t o u m , S u d a n I s l a m i c D e v e l o p m e n t B a n k I s l a m i c D e v e l o p m e n t B a n k

Outline • IsDB Group in Brief A • IsDB involvement in extractive industries in Africa B • Takeaways from the Bank’s experience C • Role of Banks / Financial Institutions in financing the industry D I s l a m i c D e v e l o p m e n t B a n k 2 I s l a m i c D e v e l o p m e n t B a n k

IsDB Group in Brief I s l a m i c D e v e l o p m e n t B a n k 3 I s l a m i c D e v e l o p m e n t B a n k

IsDB Group at a Glance 40+ Years in the Service of Development  1975 - 2015G 2015 ICD 1999 IsDB Group 1981 Key Features 1975  MDB of the Islamic World  South-South 2008 1994 Development Financing Institution  Solidarity-based  Shariah -compliance  Pioneer in Trade Finance I s l a m i c D e v e l o p m e n t B a n k 4 I s l a m i c D e v e l o p m e n t B a n k

IsDB Membership Europe: 2 Asia: 26 Africa: 27 Africa: 27 Latin America: 1 • A Unique Model of South-South Cooperation • All Member Countries can benefit form IsDB Financing • MDB: Membership 56 Countries spreading over 4 continents I s l a m i c D e v e l o p m e n t B a n k 5 I s l a m i c D e v e l o p m e n t B a n k

Our Clients 56 Member Countries across 4 Continents  Government +  Private Sector Muslim Communities in Non-Member Countries  NGOs 1. Afghanistan 20. Indonesia 38. Pakistan 2. Albania 21. Iran 39. Palestine 3. Algeria 22. Iraq 40. Qatar 4. Azerbaijan 23. Jordan 41. Saudi Arabia 5. Bahrain 24. Kazakhstan 42. Senegal 6. Bangladesh 25. Kuwait 43. Sierra Leone 7. Benin 26. Kyrgyz Republic 44. Somalia 8. Brunei 27. Lebanon 45. Sudan 9. Burkina Faso 28. Libya 46. Suriname 10. Cameroon 29. Malaysia 47. Syria 11. Chad 30. Maldives 48. Tajikistan 12. Comoros 31. Mali 49. Togo 13. Cote d’Ivoire 32. Mauritania 50. Tunisia 14. Djibouti 33. Morocco 51. Turkey 15. Egypt 34. Mozambique 52. Turkmenistan 16. Gabon 35. Niger 53. Uganda 17. Gambia 36. Nigeria 54. United Arab Emirates 18. Guinea 37. Oman 55. Uzbekistan 19. Guinea Bissau 56. Yemen I s l a m i c D e v e l o p m e n t B a n k 6 I s l a m i c D e v e l o p m e n t B a n k

Access to IsDB Group: Geographic / Field Presence 5 COUNTRY GATEWAY Dubai Office OFFICES + 14 Field 4 REGIONAL OFFICES Representatives Nigeria Bangladesh  Afghanistan +  Azerbaijan  Bangladesh Senegal Kazakhstan  Burkina Faso  Guinea HEADQUARTERS  Indonesia Jeddah  Iran  Mali Egypt Indonesia  Nigeria  Morocco Malaysia Pakistan  Sudan  Turkmenistan  Uzbekistan  Yemen Turkey I s l a m i c D e v e l o p m e n t B a n k 7 I s l a m i c D e v e l o p m e n t B a n k

IsDB involvement in extractive industries in Africa I s l a m i c D e v e l o p m e n t B a n k 8 I s l a m i c D e v e l o p m e n t B a n k

Mining and Downstream infrastructure: SNIM (Iron Ore Mining Company), Mauritania  SNIM – Mauritania: 2 nd Largest Iron ore producer in Africa  Majority shareholder: Government of Mauritania  Sales 2014: USD 800 million / 40 % of the country’s exports   Project objective: increase iron ore concentrate production  The project includes:  Extension of the existing mine operation  Installing a new beneficiation line  Extending and modernising existing utilities and workshops  Building a new tailings disposal area and Opening a new water well field area  Corporate Finance Transactions:  Total Project Cost: US$ 760 m (PPP)  2 Operations:  Mining: (Guelb-2: US$ 80 m); completed November 2015  Support infrastructure: (Railway Modernization: US$ 28 m); completed Nov 2015 I s l a m i c D e v e l o p m e n t B a n k 9 I s l a m i c D e v e l o p m e n t B a n k

DOWNSTREAM INFRASTRUCTURE: OCP- Morocco  OCP - Morocco:  World leader in the entire Phosphate value chain  Majority shareholder: Government of Morocco  Product range:  Phosphorus rock  Phosphate Acid  Fertilizer  Operations:  Employees: 23,000 people  JVs: Brazil, USA, India, Pakistan and China  Sales June 2015 (6-months): USD 2.5 bn  IDB Financing: USD 150 m (PPP)  Jorf Lasfar port rehabilitation & expansion I s l a m i c D e v e l o p m e n t B a n k 1 0 I s l a m i c D e v e l o p m e n t B a n k

MINING VALUE ADDITION: Tunisian Indian Fertilizer- TIFERT, Tunisia  Project: Phosphoric Acid plant  Project cost: USD 535 m  Financing:  IDB: USD 120 m (PPP)  Sponsors:  CPG/GCT (company in mining/value-addition) :70%  CFL/GSFC (exclusive Indian off-takers) :30%  Project completed in August 2013  So far 165,000 tons of Phosphoric Acid exported to India generating high dollar value exports for the country  Creation of 466 permanent job positions I s l a m i c D e v e l o p m e n t B a n k 1 1 I s l a m i c D e v e l o p m e n t B a n k

Takeaways from Bank’s experience I s l a m i c D e v e l o p m e n t B a n k 1 2 I s l a m i c D e v e l o p m e n t B a n k

Takeaways from Bank’s experience  Involvement of Private sector  Local ownership  Facilitation (downstream infrastructure)  Value addition (downstream industries) Quote: “Life can be understood only looking behind, but can be lived only looking ahead.” (Soren Kierkegaard) I s l a m i c D e v e l o p m e n t B a n k 1 3 I s l a m i c D e v e l o p m e n t B a n k

Role of Banks / Financial Institutions in financing the industry I s l a m i c D e v e l o p m e n t B a n k 1 4 I s l a m i c D e v e l o p m e n t B a n k

Role of Banks / Financial Institutions in financing the industry  Financing  Infrastructure (Public or PPP; Equity participation etc.)  Trade (ITFC)  SMEs (ICD)  Facilitation / catalyst:  Content development (long term development planning)  Guarantees (ICIEC)  Pre-screening of potential investors  Knowledge sharing / Reverse Linkages (capacity development) (CCD)  Mobilization of financing / leveraging (ACG) I s l a m i c D e v e l o p m e n t B a n k 1 5 I s l a m i c D e v e l o p m e n t B a n k

Co-Financing Highlights Arab Coordination group Arab Gulf Program for Development • More than 120 MOUs/Agreements with 90 Institutions (MDBs, Bilaterals, UN Institutions, Regional Orgs, OIC and Affiliates, NGOs, etc. • Partnership arrangements:  Partnership Platforms: CAREC, CG, …  Framework Co-finaning Agreements: AsDB, AfDB, KDB, WBG MDBs / Bilaterals / International Organizations I s l a m i c D e v e l o p m e n t B a n k I s l a m i c D e v e l o p m e n t B a n k 1 6

Concluding remarks: Quote: “Nothing can be taught to a man, but it’s possible to help him find the answer within himself.” (Galileo Galilei ) Thank You The Islamic Development Bank Group Providing resources  Fighting poverty  Restoring dignity http://www.isdb.org I s l a m i c D e v e l o p m e n t B a n k I s l a m i c D e v e l o p m e n t B a n k