Port Expansion in the context of financing by EBRD and its sustainability mandate Julia Mackin Principal Environmental Advisor ESPO Conference 2018, Rotterdam
Contents • Introduction to EBRD • Transport, Port and shipping investments • Mainstreaming green financing: Green Economy Transition • Tools and challenges in implementing EBRD’s sustainability agenda • GET for Ports 5 June, 2018 2
What we do The EBRD invests to build up effective market economies in countries across three continents and to make a positive impact on people’s lives . With a focus on private sector investment and support for policy reform, we work to ensure that economies in our regions are competitive, inclusive, well- governed, green, resilient and integrated. 5 June, 2018 3
Shareholding Established in 1991. 9% The EBRD is owned by 66 countries from five continents, as well as the 9% European Union and the European 64% 10% Investment Bank. These 8% shareholders have each made a capital contribution, which forms our core funding. EU27 countries EBRD region Includes European Community and Excluding EU, European Investment Bank (EIB) Russia at 4% Capital base of €30 billion each at 3%. Among other EU countries: France, Germany, Italy, and the UK each holds 8.6% The EBRD has a triple-A rating from USA Japan Other all three main rating agencies (S&P, Moody’s and Fitch) As at January 2018 5 June, 2018 4
Where we invest 5 June, 2018 5
The EBRD and its objectives Set out in the Banks Establishment agreement: “To promote transition to market economies by investing mainly in the private sector” “To mobilise significant foreign direct investment” “To support privatisation, restructuring and better municipal services to improve people’s lives” “To encourage environmentally sound and sustainable development” 5 June, 2018 6
Our transition qualities Well-governed Competitive Promoting the rule of law, transparency, and Building dynamic and open markets that accountability, and stimulating firms to stimulate competition, entrepreneurship and adequately safeguard and balance the productivity growth. interests of their stakeholders. Inclusive Integrated Building inclusive market economies which Building geographically integrated domestic ensure equal economic opportunity for all and and international markets for goods, leave no group behind. services, capital and labour. Green Resilient Building green, sustainable market Building resilient market economies that can economies which preserve the environment withstand turbulence and shocks. and protect the interests of future generations. 5 June, 2018 7
EBRD’s objectives achieved through financing the private sector At a glance Net cumulative Bank investment Annual Bank Investment and €119.6 billion (since 1991) Operations 12 450 €9.67 billion (in 2016) 400 10 350 Number of projects 8 300 5,035 (since 1991) 250 412 (in 2017) 6 200 4 150 Cumulative disbursements 100 €91.5 billion 2 50 0 0 Private sector share of '13 '14 '15 '16 '17 cumulative investment ABI ( € billion, reported rate) 79 % Number of operations (#) “Total project value” is the total amount of finance provided to a project, including both EBRD and non-EBRD finance, and is reported in the year in which the project first signs. EBRD financing may be committed over more As at December 2017 than one year with “annual Bank investment” (ABI) reflecting EBRD finance by year of commitment. The amount of finance to be provided by non-EBRD parties is reported in the year the project first signs. 5 June, 2018 8
Portfolio Regional (€ billion) Sector Southern and Eastern 9 Mediterranean Turkey 23% 8 29% South-Eastern Europe 7 Eastern Europe and Caucasus 22% 6 Central Europe and Baltics 26% 5 Cyprus and Greece 4 Central Asia Russia Corporate Energy 3 Manufacturing and services, Power and energy, Agribusiness, Equity Funds, Property and tourism, Information and 2 communication technologies Financial Institutions Infrastructure 1 Bank lending, Bank equity, Small Municipal and business finance, Insurance and environmental 0 financial services infrastructure, Transpo port As at December 2017 5 June, 2018 9
EBRD Transport at a glance 1 • €15.0 billion invested • Total project value: €58.4 billio ion 311 projects cts • • 36 36 of the EBRD’s countries of operation Number Nu ber of proj ojec ects ts per sector or Countr try presen sence e per sector or 26 26 26 26 Aviation 22 22 20 20 46 46 Intermodal 94 94 25 25 11 11 Ports and Shipping 60 60 Rail 86 86 Road 1. Data at end December 2017 10
EBRD in the port sector Investment of 1.24 billion € in 60 ports and shipp ppin ing proje jects ts (with ith tota otal value of projects ects of 4.3 billion n €) financing public ic and d privat ate sector with a focus on… • Bridging the infrastructure gap to meet rising demand and unlock economic development • Port Sector reform: Restructuring, Corporatization and Commercialization • Active support of private sector participation • Emphasis on Energy Efficiency and Climate Adaptation • Promotion of short sea shipping operations and intermodal transport 11
Some examples Ventspils (20 m€) Globalports (80 m€) New multi-purpose/ Financing EE programme intermodal terminal across four terminals Klaipeda Smelte (32 m€) Transhipment container Euroterminal Odessa (20 m€) terminal New multi-purpose/ intermodal DCT Gdansk (35 m€) terminal New Deepwater Container Mersin Int. Port (80 m$) Terminal First Eurobond issued by Port of Split (18 m€) infrastructure project Expansion cruise terminal company in Turkey. Durres (14 m€) Asya Port (92 m$) Rehabilitation ferry terminal Deep sea container terminal 12
Mainstreaming green financing How to deliver Sustainable Transport ? Tailored financing instruments • Direct financing, GET • Indirect-financing via local banks (GEFFs) • Investment grant support for climate Targeted activities: PROJECTS & technology transfer • Energy and resource INVESTMENTS • Blended concessional finance so as to audits to identify green overcome affordability and risk investments perceptions • Integrated technical, • Compliance with ESP financial and marketing POLICY TECHNICAL teams to support client ASSISTANCE DIALOGUE banks in developing sustainable energy lending Working with governments • Assessments of risks • To address sustainability and related to climate environmental market failures vulnerabilities • To strengthen the institutional and • Transition gaps and regulatory context and create market scoping studies optimum conditions for green investments to take place 13
Sustainability Mandate EBRD RD Envir ironmen mental tal and Soc ocial ial Polic icy • Governance Policy; 10 areas of Performance Requirements (PRs) • EU environmental standards • Good International Practice • Similar to World Bank, IFC, other IFIs sustainability safeguards: environmental, health, safety and social standards applied to projects • Assessment of E&S impacts and risks during due diligence prior to a decision on any Project’s financing • 55 Environment & Social Experts, support of external consultants • E&S Action Plan is part of a loan/equity agreement to address any gaps 5 June, 2018 14
E&S Issues in EBRD Projects • Quality and timing of ESIA, 60/120 days disclosure and public consultations • Quality and timing of biodiversity and ecosystems baseline data Safety of construction site and • • Limited consideration of alternatives, workers • Poorly planned and managed dredging • Public safety, including security activities measures against terror attacks • Lack of strategic planning documents • Land Acquisition and Resettlement , expropriation and compensation ➢ associated facilities (intermodal issues infrastructure) • Labour risks (modern slavery), ➢ assessment of cumulative impacts human trafficking; (development of port surrounding industry). • Clients and local authorities capacity 15
Technical Cooperation/Donor Grants • Provides funding to improve preparation and implementation of EBRD investment projects • Advisory services to private and public sector clients, assists legal and regulatory reform, institution-building, company management and training • Funded by governments and international institutions (EU, CIF, SCCF, GEF, GCF) and managed by the EBRD • In 2017, 876 million Euros provided by bilateral and multilateral donors, 36% of this by EU. 5 June, 2018 16
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