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Presentation to the European Broadcasters Union

29 October 2012

Working with the European Bankfor Reconstruction and Development

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The European Bank for Reconstruction and Development (EBRD) at a glance

International Financial Institution

Solid financial position

Development mandate

Largest investor in the region

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Established in 1991 and owned by 63 countries and the EU and EIB

(1)

AAA rating and a capital base of EUR 30bn

To foster transition towards open and democratic market economies and promote entrepreneurship

In 2011 Annual Business Volume amounted to EUR9.1bn comprising 380 projects

(1) 57% of shareholding is G7 and 84% is OECD country based. EU27 countries hold 62.8% of the shareholding.

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The EBRD’s Objectives

Promotes projects that expand and

improve markets and help build

institutions that underpin the market

economy

Promotes projects that expand and

improve markets and help build

institutions that underpin the market

economy

Supports, but does not

replace, private investment.

Provides financing at

reasonable terms

Supports, but does not

replace, private investment.

Provides financing at

reasonable termsProject returns are

commensurate

with risks

Project returns are

commensurate

with risks

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EBRD operates across 33 countries, 40 regional offices and 3 continents

EBRD headquarters

EBRD country of

operation

Central Europe and BalticsCroatia EstoniaHungaryLatvia

LithuaniaPoland

Slovak RepublicSlovenia

South-Eastern EuropeAlbania

Bosnia and HerzegovinaBulgaria

FYR MacedoniaRomania

MontenegroSerbia

Eastern Europe and the Caucasus

ArmeniaAzerbaijan

BelarusGeorgiaMoldovaUkraine

Central Asia and Mongolia

KazakhstanKyrgyz Republic

MongoliaTajikistan

TurkmenistanUzbekistan

Southern and eastern Mediterranean

EgyptJordan

Morocco Tunisia

Russia

Turkey

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..throughout a number of industries and sectors

Agribusiness Natural Resources

Power and Energy

Financial Institutions

Property and Tourism

Manufacturing and Services

Transport Municipal Infrastructure

Climate Finance

Information and Communication

Technologies (ICT)

Equity Funds

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EBRD provides wide financing solutions

Typical Size

Term/Holding period

Investments approach/Limits

Instruments

Debt instruments: typically from 7 to 10 years Equity Investments and Guarantees: typically from 3 to 7 years

Debt: public and private instruments, fixed and floating, syndicated loans, bonds

Equity: Private Equity, IPO Quasi Equity: mezz, convertible loans, subordinated loans

Ticket size from a low single digit EUR mn amount to over EUR 100 mn

EBRD typically acts as a co-investor along other sponsors EBRD’s stake typically does not exceed 35% of the total investments (equity

and debt) or 50% in case of syndication with other international banks

Currency Local and major currencies (US$, EUR, RUB, etc.)

Exact financing terms are defined by specific project circumstances

Applications Growth capital, acquisition and consolidation, non-exclusive bidding support,

working capital, green/brown fields, JVs, privatization

“Typical” investment profile

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EBRD’s objectives achieved through financing the private sector

Invested over €75.2 billion in more than 3,468 projects since 1991

As at end June 2012:

– €3.4 billion invested in 153 projects

– Private sector accounted for 79% share

– Debt 84% & Equity 16% 0

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(A

BV

)

Debt ABV Equity ABV Net Cumulative Business Volume

€ billion

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Cooperation with EBRD offers companies numerous advantages

Long-term investor

Strong ties with Local & Federal Governments

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• EBRD aims to develop long-term relationships - typical investment horizon is up to 10 years with longer financing available

• The Bank relies on a buy-and hold approach, which decreases its dependence on the short term market fluctuations

• EBRD has established strong and long lasting connections with Local and Federal Governments that allow the Bank to promote and defend interests of its portfolio companies

Preferred Creditor Status

5 • EBRD has a Preferred Creditor Status, which exempts payments to EBRD generalised moratoria and foreign exchange controls. It allows EBRD to provide financing even in the hardest market conditions

Sector knowledge & local expertise

3• Deep knowledge and sector expertise proven by more than 140 executed

projects in the ICT sector

Structured solutions

2 • Transactions are tailored to the needs of the clients and a variety of financial structures are considered

• Non-standard structures are welcome and a large range of transaction sizes

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Transparency, sound business principles and TI are the key criteria for the projects financed by EBRD

Transparent Shareholding Structure

Strong Business Fundamentals

Audited Financial Statements

Transition Impact (TI)

• Full transparency of the ownership structure and complete disclosure of the end beneficiaries

• High level of integrity both among owners and managers and high standards of corporate governance

• Sound business model with a clear return to the Bank from the main operations rather than from alternative sources

• At least 3 years of financial statements audited by reputable international or local auditing firms and prepared in accordance with IFRS

• Impact on the local economy in line with the Bank’s mandate to facilitate transitioning to the market economy

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Project Timeline

Concept Review

Contact initiated Define concept Initial company

and project information review

Mandate letter to initiate transaction

Final Structure Approval

Project Structure Approval

Board of Directors Approval

Due Diligence: Financial, Legal and Technical

Finalizing the deal terms Drafting legal documentation (term sheet)

Signing

1 2 3 4 5EBRD project cycle

The whole process timing is dependent largely on the various specific circumstances and the availability of relevant information.

The Board makes a final review and approves the project

Funds are ready to be disbursed

Mandate letter Signed

Term sheet Signed

Legal Documents Signed

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ICT Sector

Cumulative Financing to date: ca. €4bn

Current Portfolio: €1bn

140 transactions from low single digit million to €200mn amount

15 dedicated employees

• Mobile & fixed line• ISPs • Cable TV• Towers• Satellites• Data centres• Fibre• Wireless broadband• MVNO• Pay-TV • Mobile payments

Investments into the ICT sector are viewed as a key tool in modernizing the local economy and increasing its innovation and competitiveness

• Content production• B2B publishing• Cinema chains• Outdoor advertising• IT services• Software developers• Systems integrators• Call centres• Internet• Cleantech• Semiconductors• FDIs

Selected SubsectorsComments

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ICT Sector Investments

Eurovision

Russia Towers - equity investment to finance shared communication infrastructure for mobile and fixed wireless telecom operators in Russia

Emitel – financing an investment programme including (i) new digital terrestrial broadcasting services, and (ii) expansion of telecoms tower services as an independent tower operator

ICT Sector Investments: Financing Digitisation

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• Broadcaster’s need digital infrastructure, including network and digitisation equipment, to respond technological changes and ensure preservation of existing cultural heritage.

• EBRD financing available for bankable operations (i.e., revenue generating project and/or sovereign guarantee) that are consistent with mandate.

• Potential revenue streams:• Fees for use of digital library• Creation of cinema pre-shows mixing advertising, branded

entertainment and local content• Use of the digital infrastructure for non-public purposes: sports,

industrial, commercial, etc.• Fees from distribution to cable channels for expatriate viewing

EBRD Legal Transition ProgrammeICT sector support - overview

Focus on development of sector/optimising its impact across the economy

• Attraction of investment

• Introduction, enhancement or maintenance of competition

• Balancing incentive to existing players to invest with access based competition

Helps with identification of investment bottlenecks

• Absent or short-sighted policies

• Absent or flawed laws

• Absent or weak institutions

• Absent or outdated methodologies

• Absent or weak capacity

EBRD Legal Transition ProgrammeICT sector support - overview

• Works with government to modernise policy/regulation to encourage investment

• Policy dialogue

• Technical cooperation support

• Outreach

• Linked to actual Bank investment projects, whenever possible

• Activities • Training and capacity building

• ICT policy development

• Primary and secondary law drafting and adoption

• Regulatory implementation

• High-speed broadband roll-out framework

• Digital Broadcasting Switchover policy and implementation

• Radio frequency spectrum rationalisation

• Infrastructure access and sharing

• Countries: Albania, Armenia, Azerbaijan, Georgia, Jordan, Kazakhstan, Kyrgyzstan, Moldova, Mongolia, Montenegro, Serbia, Tajikistan, Ukraine

EBRD Legal Transition ProgrammeExamples of activities and locations

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Selected projects the ICT team executed in the past across all countries of operations (1/2)

Russia

2009

Syndicated Loan

Euro 258 million

Equity Investment

2011

Poland

Euro 10 million

Russia

2010

Convertible Loan

USD 20 million

Russia

2011

Investment in Bond Offering

Equity Investment

Euro 200 million

Poland

2011

Russia

2012

Equity Investmentvia Venture Capital Facility

Poland

Privatization – Equity Investment

2008

Euro 49 million

Albania

2008

Privatization - Syndicated Loan

Euro 27 million Euro 20 million

Regional

Equity Investment

2008

Poland & Balkans

2009

Loan and Equity Investment

Euro 22 million

Regional

2012

Loan

Euro 43 million

Turkey

2012

Loan

Euro 100 million

Russia

Convertible Loan

2012

USD 30 million

Russia

2009

Equity Investment

USD 11 million

Russia

2011

Equity Investment

Euro 30 million

Romania

2012

Loan

Euro 15 million

Croatia

Convertible Loan

2010

Euro 4 million

Regional

2009

Fund Investment

USD 30 million

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Selected projects the ICT team executed in the past across all countries of operations (2/2)

Ukraine

2007

Equity Investment

Euro 22.3 million

Syndicated Loan

EUR 50 million

Regional

2006

USD 72 million

Russia

2003-2005

Syndicated Loan

Bulgaria

Privatisation – Loan and Equity Investment

Euro 93 million

2004

Euro 17 million

Serbia

2004

Loan and Equity Investment

Kazakhstan

2003

Syndicated Loan

USD 110 million

Syndicated Loan

Euro 100 million

Albania

2003

Poland

2003

Loan

Euro 52.5 million

Euro 75 million

Poland

2001

Loan

Kazakhstan

2005-2007

Syndicated Loan

Euro 130 million

Czech Republic

2002

Syndicated Loan

USD 35 million

USD 35 million

Russia

2007-2008

Euro 3 million

Bulgaria

Equity Investment

2006

Euro 32 million

Regional

1999

Equity Investment

Euro 151 million

Romania

1997 - 2002

Loan

Euro 81 million

Regional

1998

Loan

Euro 65 million

Regional

1998

Equity Investment

Georgia & Bulgaria

2008

Loan and Equity Investment

USD 35 million

Loan and Equity Investment

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Investment Opportunities contact:

Director

ICT Team

Industry, Commerce & Agribusiness

Telephone : + 44 207 338 7855

The European Bank for Reconstruction and Development contact

(

Legal Transition programme contact:

Paul Moffatt

Legal Transition Team

Office of the General Counsel

Telephone : + 44 207 338 7453

EBRDOne Exchange SquareLondonEC2A 2JN