PORT AND LOGISTICS DEVELOPMENT: Working with IFC IFC: A MEMBER OF - - PowerPoint PPT Presentation

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PORT AND LOGISTICS DEVELOPMENT: Working with IFC

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IFC: A MEMBER OF THE WORLD BANK GROUP

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IBRD

International Bank for Reconstruction and Development

IDA

International Development Association

IFC

International Finance Corporation

MIGA

Multilateral Investment and Guarantee Agency

ICSID

International Center for Settlement of Investment Disputes

• Est. 1945
• Est. 1960
• Est. 1956
• Est. 1988
• Est. 1966

To promote institutional, legal and regulatory reform To promote institutional, legal and regulatory reform To promote

private sector development

To reduce political investment risk To provide dispute resolution to mitigate non-commercial risks Governments of member countries with per capita income between $1,025 and $6,055 Governments of poorest countries with per capita income of less than $1,025 Private companies in member countries Foreign investors in member countries International investors

• Technical

assistance

• Loans
• Policy Advice
• Technical

assistance

• Interest Free

Loans

• Policy Advice
• Equity
• Quasi-Equity
• Long-term Loans
• Risk Management
• Advisory

Services

• Political Risk

Insurance

• Tribunals
• Arbitration
• Dispute

Resolution

Shared Mission: To Promote Economic Development and Reduce Poverty

R O L E T A R G E T P R O D U C T

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• Wholly-owned

subsidiary of IFC

• Private equity fund

manager

• Invests third-party

capital alongside IFC

• Firm-level advice
• Investment Climate
• PPP transaction advice
• In partnership with

World Bank, advice on broader market development and enabling environment for private sector

• Equity
• Loans
• Syndications
• Trade Finance and

Supply Chain

• Securitized Finance
• Risk Management
• Blended Finance

IFC ASSET MANAGEMENT COMPANY INVESTMENT SERVICES $55 bn Committed Portfolio (FY17) ADVISORY SERVICES

Note: IFC year-end is June 30th.

Over 700 projects valued at $1.5 bn (FY17) $9.8 bn under management (FY17)

Note: IFC year-end is June 30th.

IFC: WHAT WE OFFER

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• Over six decades of experience in emerging markets
• Largest global development institution focused on private sector
• Founded in 1956 with 184 member countries
• AAA-rated by S&P and Moody’s
• Equity, quasi-equity, loans, risk management and local currency products
• Takes market risk with no sovereign guarantees
• Promoter of environmental, social, and corporate governance standards
• Resources and know-how of a global development bank with the flexibility of a merchant

bank

• Infrastructure and Natural Resources accounted for 18.1% of commitments in FY17

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FY 2017 Commitments by Region FY 2017 Highlights

* Includes 3rd parties

Portfolio (IFC’s account) $55 billion New Commitments $11.9 billion Core Mobilization* $7.4 billion # of Companies 2,006 # of Countries 78

Note: IFC year-end is June 30th

OVER $245 BILLION INVESTED SINCE 1956

Latin America & the Caribbean 23% Sub- Saharan Africa 20% Europe & Central Asia 18% South Asia 17% East Asia & the Pacific 15% Middle East & North Africa 8% Global 1%

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IFC’S GLOBAL REACH

Global presence through 100+ regional

• ffices in 94 countries, AAA credit rating

3,860 staff (56% are based outside

Washington, DC)

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• Advising the public sector partner
• Turn-key project development:
• Project identification
• Selection of the project structure
• Development of the legal documentation
• Presentation of the project to potential investors
• Negotiations and financial closing
• Development of the project monitoring mechanism for the public partner

What can we do for the public sector?

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IFC – SUPPORT FOR PORT AND LOGISTICS DEVELOPMENT

Consulting on Public-Private Partnership Projects

Example: TIBAR BAY – East Timor

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• Equity (including early equity – InfraVentures)
• Quasi-equity
• Loans (including in certain local currencies)
• Syndication / mobilization
• Risk Management
• Blended Finance

What can we do for the private sector?

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IFC – SUPPORT FOR PORT AND LOGISTICS DEVELOPMENT

Financing of Investment Projects

Plus selective lending to state-owned enterprises

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Total Investments: US$4.4 billion since 2005

IFC PORT INVESTMENTS WORLDWIDE

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MPS TEMA PORT PROJECT OVERVIEW

• IFC’s largest port investment to date and the

largest debt mobilization committed in Sub- Saharan Africa

• Given its strategic location in relation to Accra,

Tema handles over 90% of the country’s container traffic and serves as an outlet for landlocked neighbors (i.e. Burkina Faso, Niger, Mali)

• Development Impact: Improving logistics to

reduce transportation costs and increase Ghana’s competitiveness

• Construction and operation of a new container

terminal in the Port of Tema, approximately 30 km east of Accra, Ghana. After project completion, the Port will have capacity for 1 million TEUs

• 35-year concession granted by the Ghana Ports

and Harbors Authority

• In FY16, IFC committed US$195 million for its
• wn account and mobilized US$472 million in

funds from commercial banks as part of a US$1.4 billion project cost

PROJECT HIGHLIGHTS

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SEMEIKHON (SMK) RIVERSIDE PORT PROJECT OVERVIEW

• The

finished container port will feature warehousing and a mixed use Industrial Zone to help create an integrated logistics hub

• The investment is in line with IFC’s strategy to

support Myanmar’s infrastructure to enable it to do business more efficiently and unlock the country’s potential for international trade

• The investment will also help develop the use of

the Ayeyarwady river as a viable alternative to long-haul trucking within Myanmar

• Construction and operation of a new riverside port

with cargo and container capacity along the bank

• f Ayeyarwady river southwest of Mandalay,

Myanmar’s second largest city

• In FY18, Infraventures, IFC’s infrastructure project

development fund, invested US$3.85 million in early stage development equity and also provided experienced project development support for the port’s construction

PROJECT HIGHLIGHTS

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SNOWMAN LOGISTICS PROJECT OVERVIEW

• IFC provided the first round of private institutional

capital to a small but market-leading company in a nascent, rapidly growing sector, which signaled confidence in the company’s management and helped with subsequent fundraising

• Snowman completed an IPO in 2014, 60x
• versubscribed and IFC presence as an equity

investor was crucial

• Provided long-term financing when the company

was in the process of implementing a turnaround

• Improved environmental and social standards
• One of the leading cold chain logistics providers in

India, operating a network of temperature- controlled warehouses and refrigerated trucks

• IFC has made several investments in Snowman,

supporting its expansion

• In FY09, IFC invested US$5.4 million for a 20%

equity stake

• In FY12 and FY13, IFC invested US$6.6 million

and US$ 2.8 million in two 8-year corporate loans

• Snowman has grown from a storage capacity of

9,142 pallets in 2007 to 98,000 pallets in 2016

PROJECT HIGHLIGHTS

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CONTINENTAL WAREHOUSING CORPORATION PROJECT OVERVIEW

• IFC’s

investment will help increase rail transportation in India, which is cheaper, safer and more efficient over long distances

• This

represents an alternative to existing dilapidated government-run freight terminals and complements public investment in new railway lines to encourage freight movement on the rail network

• Integrated logistics player with 7 operational multi

modal terminal facilities and an express logistics / 3PL business

• CWC has 4 Container Freight Stations around

major ports in India and 3 rail-linked inland terminals, which will cater to container and bulk traffic for both Exim and Domestic purposes

• In FY16, IFC invested US$ 25 million equity and

provided a US$ 35 million A-loan, to finance the expansion of 2 new inland terminals and refinance existing debt, aligning it to projected cash flows

PROJECT HIGHLIGHTS

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• IFC invests exclusively in for-profit projects and charges market rates for its products and

services

Commercially Sound

• IFC generally finances no more than 25-50% of total project cost
• Never the largest shareholder, typical stake up to 20%
• Typical ticket size $20-50m, but can go to $100m +
• Able to mobilize additional debt (B loan program) and equity funds (AMC)

Market Catalyst

• IFC invests for the medium-to-long term

Long-term Horizon

• Each investment assessed for E&S risks by in-house team of experts, and action plan put

in place to mitigate risks

• Increasingly relevant for clients, i.e. land acquisition, carbon footprint, community buy-in
• Facilitates debt raising (Equator Principles)

Environmentally & Socially Responsible

• Detailed corporate governance assessment carried out (dedicated internal resources)
• Work on governance issues with companies pre-IPO and those already listed
• Roster of quality independent directors
• Facilitates exit, especially in public markets

Corporate Governance

WHAT IFC LOOKS FOR IN POTENTIAL PROJECTS:

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Annex

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Long-Term Partner Role Financing Not Readily Available Elsewhere Stamp of Approval Advice based

• n Global

Expertise and Knowledge Worldwide presence Affiliation with the World Bank Group Ability to Mobilize Additional Funds Social, Environmental and Corporate Governance Expertise

WHAT CLIENTS VALUE ABOUT IFC

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• IFC’s total financing (for its own account) must be less than 25% of total company

capitalization

• IFC can also mobilize additional financing through:

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Project Type

Main Guidelines

IFC INVESTMENT GUIDELINES

Greenfield, total cost less than $50 million

Up to 35% of project cost for IFC’s own account

Greenfield, total cost more than $50 million

Up to 25% of project cost for IFC’s account

Expansion or rehabilitation

Up to 50% of project cost

B-loans from international commercial banks Parallel loans from development financial institutions Portfolio co- lending

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IFC Performance Standards

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Assessment and management of environmental and social risks and impacts

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Labor and working conditions

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Resource efficiency and pollution prevention

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Community, health, safety and security Land acquisition and involuntary resettlement Biodiversity conservation and sustainable management of living natural resources Cultural heritage Indigenous peoples

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ENVIRONMENTAL & SOCIAL STANDARD SETTING

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• Oldest

and largest syndicated program amongst MDBs, established in 1957

• Over US$50 billion mobilized from more than

500 financial institutions for over 1,000 projects in more than 115 emerging markets

• Co-financiers from developed and emerging

markets, include commercial banks, funds, insurance companies, development finance institutions (DFIs), and emerging market central banks

• As of June 30, 2017, IFC’s syndicated loan

portfolio under management totaled US$16 billion

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• Enables loans with longer tenors
• No withholding tax
• Completes financial package
• Introduces new banking relationships
• IFC’s “stamp of approval”
• IFC’s environmental and social leadership
• IFC is the Lender of Record:
• May allow lenders to reduce their

provisioning requirements

Benefits to Borrower Overview

IFC SYNDICATION’S PROGRAM

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SYNDICATIONS PRODUCTS

Different Products Target Different Investors Types of IFC Syndicated Lending

B Loans Parallel Loans Unfunded Risk Participation(s) MCPP Loans

Type of Investor Commercial Banks, Funds Development Finance Institutions & Sovereign Entities Insurance Companies Institutional Investors (public and private) Investment Approach Active Deal-by-Deal Selection Active Deal-by-Deal Selection Active Deal-by-Deal Selection Passive Portfolio Participation in Eligible Projects Investor’s Strategy Follow their own client strategy Developmental Mandate (DFIs) Follow their own credit strategy Follow IFC’s Strategy Investment Process Investor makes credit approval Investor makes credit approval Investor makes credit approval Full delegation to IFC post mandate Tenor Generally shorter than A Loan Generally matching A Loan Matching IFC A Loan Tenors Matching IFC’s A Loan Tenors Portfolio Rights Yes Yes Limited voting and consultation Follow IFC’s Decisions Documentation B Loan Participation Agreement Parallel Loan with a Common Terms Agreement Unfunded Risk Participation Agreement Administration Agreement/Common Service Agreement 19

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Myanmar

Myanmar Industrial Port (MIP)

$40,000,000 Subordin. Loan

FY 2016

Egypt

Sonker Bunkering Co.

$70,000,000 Senior Loan $21,800,000 Subordin. Loan $21,800,000 Syndication

FY 2016

Brazil

Brasil Port Logistica

$27,300,000 Senior Loan $20,400,000 MCPP

FY 2017 Port of Lazaro Cardenas FY 2014

$100,000,000 Senior Loan $200,000,000 Syndication Lender Arranger and Lender Arranger and lender

Terminal Contenedores Buenaventura

$54,000,000 Senior &Subord. Loan $187,000,000 Syndication

FY 2014-2011

Brazil

BTP Santos

$140,000,000 Senior Loan $582,000,000 Syndication

FY 2014-2011

Peru

$75,000,000 Senior Loan $142,000,000 Syndication

FY 2013

Ukraine

Asyaport FY 2012

Turkey

Callao Norte Port FY 2013

Arranger and Lender $75,000,000 Senior Loan Arranger and Lender Lender Lender Arranger and Lender Arranger and Lender

Pakistan

HPC Odessa

$32,000,000 Senior Loan

Togo

Lome Container Terminal

$133,644,500 Senior Loan

FY 2016-2011

Nigeria

OIS Indorama Port

$52,500,000 Senior Loan $21,000,000 Syndication

FY 2017

Ukraine

MV Cargo

$37,000,000 Senior Loan

FY 2017

Lender Lender Arranger and Lender

Colombia Ghana

MPS Tema Port

$195,000,000 Senior Loan $472,000,000 Syndication

FY 2016

Arranger and Lender

Mexico

Contecon de Manzanillo FY 2016

$65,000,000 Senior Loan $52,500,000 Syndication Arranger and Lender

Mexico

SAMPLE INVESTMENTS IN PORTS

Qasim International Container

$40,000,000 Senior Loan

FY 2011-2010

Arranger and Lender

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China

Zhengming FY 2015

Lender and Investor

Rwanda

Intraspeed FY 2007

Investor

China

FY 2016

Investor

Best Logistics Technologies Ltd.

$7,500,000 Subordinat. Loan $10,000,000 Equity

Central America

Transamerica FY 2008

Lender $15,000,000 Subordinat. Loan

Brazil

Vix Logistica FY 2015

Investor R$200,000,000 (Equiv. $76,000,000) Equity

India

Snowman Logistics FY 2013-2012-2009

Lender and Investor $9,400,000 Corporate Loans $5,400,000 Equity $10,000,000 Senior Loan $5,060,000 Equity

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SAMPLE INVESTMENTS IN LOGISTICS

Brazil

Loggi FY 2017

Investor

China

FY 2017

Investor

Huochebang

$7,500,000 Equity $2,500,000 Equity

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Contacts

Ian Twinn Global Head Washington, DC +1 202 473 8650 itwinn@ifc.org Herb Lai Chief Investment Officer Washington, DC +1 202 458 2595 hlai@ifc.org Sergei Mytarev Principal Investment Officer Moscow, Russia +7 495 411 7555 smytarev@ifc.org

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THANK YOU!