Financing Solutions for Urban Infrastructure. IFC Approach to Financing 1.
-
Upload
dennis-benson -
Category
Documents
-
view
222 -
download
6
Transcript of Financing Solutions for Urban Infrastructure. IFC Approach to Financing 1.
Financing Solutions for Urban Infrastructure
IFC Approach to Financing
2
Senior Debt & Equivalents
Equity
Mezzanine / Quasi Equity
• Senior Debt (corporate finance, project finance)• Fixed / floating rates, US$, Euro and local currencies available• Commercial rates, repayment tailored to project / company needs• Long maturities: 8-20 years, appropriate grace periods• Range of security packages suited to project / country• Mobilization of funds from other lenders and investors, through co-financing, syndications and guarantees
• Subordinated loans• Income participating loans• Convertibles • Other hybrid instruments
• Typically 5-20% shareholding (max 20% of total equity)• Long-term investor, typically 5-8 year holding period• Not just financial investor, adding to shareholder value• Infraventures (early equity investments)
FINANCIAL PRODUCTS - FROM EQUITY TO DEBT
3
HOW WE FINANCE PROJECTS
• Umbrella for participants in IFC’s syndication program:
• IFC lender of record
• immunity from taxation and provisioning requirements
• IFC’s total financing (for its own account) must be less than 25% of total company capitalization
Project Type IFC Investment
Greenfield, total costless than $50 million
Greenfield, total costmore than $50 million
Expansion or rehabilitation
Up to 35% of project cost for IFC’s account
Up to 25% of project cost for IFC’s account
Up to 50% of project cost
13
IFC Subnational Financial Program
5
6
IFC GLOBAL EXPERIENCE IN SUBNATIONAL FINANCE
Total Subnational Finance Program
Includes both Municipal Infrastructure and transactions with SOEs and Financial Institutions >US$ 2.0 billion committed >US$ 490 million syndicated >US$ 1.2 billion outstanding
52 projects
41 clients
24 countries
Total Municipal Infrastructure
> US$ 1.0 billion committed > US$ 300 million syndicated
39 projects
29 clients
15 countries
0 5 10 15 20 25 300
200
400
600
800
1,000
779613574
125
IFC Subnational Portfolio(as of February 28, 2015)
EMENA
LAC
ASIA
Africa
Number of Projects
US
$ m
illi
on
7
ELIGIBLE CLIENTS UNDER IFC SUB-NATIONAL PROGRAM
• Municipal and regional governments (LGUs)
• Municipally and Regionally owned infrastructure service entities
• Selected state owned infrastructure enterprises (SOEs)
• Banks and financial intermediaries that finance subnational infrastructure
• Public Private Partnerships (PPPs) that provide key subnational infrastructure services
1733%
2854%
713%
Subnational Commitments by Client TypeNumber of Projects
Cumulative since FY 2003, as of Febrruary 28, 2015
SOE
LGU & Muni Co
Other
8
SECTOR COVERAGE
• Water, wastewater, solid waste management• Roads, street lighting, traffic engineering, bus transit systems, intercity rail track • Power transmission, gas networks• District heating
Note: Municipal Infrastructure includes transactions with municipal governments and municipally-owned companies.
• Social infrastructure, such as health and education
• Fixed common (landlord) infrastructure in ports and waterways
• Other essential public services
IFC Subnational Transaction Examples
9
10
SAMPLE OF IFC INVESTMENTS IN EUROPE AND CENTRAL ASIA
Brunswick Rail
Eurobond $25 million
Lender
Russia
October 2012
Cernavoda and Pestera
Lender
Romania
June 2011
A Loan: $99.7 millionB Loan: $36.2 million
Ceska Sporitelna
Lender
Czech Republic
July 2010
$58.4 million
Eneriisa II
Turkey
March 2011
A Loan: $89.9 millionB Loan: $712.3 million
Lender and Syndicator
SEDASA Loan: $75 million
Turkey
December 2010
B Loan: $75 millionLender and Syndicator
AES Kavarna
Lender
Bulgaria
December 2008
A Loan: $51.8 millionB Loan: $41.4 million
Shareholder and Lender
Croatia
Zagreb Airport
December 2013
Equity: €19 million A Loan: €35 million
Pulkovo Airport
Lender and Arranger
Russia
April 2010
A/C Loan: $70 millionB loan: 100 million
Podgorica Bypass
Montenegro
December 2010
A Loan: $15 million
Lender
Samara Region
Lender
Russia
April 2013
A Loan: $65 million
Metropolitan Municipality of
IstanbulA Loan: €50 million
Turkey
September 2008Lender
Transport Transport
TransportTransportTransport
Subnational
Power
Power
Power Power Power
11
TIMISOARA MUNICIPALITY (ROMANIA)IFC investment:
• EUR 35 million senior loan
• 12-year, 3 (?) years grace
• Repayment: from the general budget revenues of the Municipality
• Purpose: co-financing the Municipality’s priority investment program in the total amount of EUR 259
million across 32 projects supported by the EU. IFC co-financing focused on a subset of 17 projects
in sectors such as transportation, urban renewal, district heating, social infrastructure and IT & SME
support
Expected outcome:
Reduction in traffic related injuries and deaths
Increased safety, mobility, health and education of the local population
Supported local SMEs to stimulate private sector growth
CO2 emissions reduction by 450,000 tons per year
12
IZMIR METROPOLITAN MUNICIPALITY (TURKEY)Izmir municipality: 3rd largest city in Turkey Population – 4 million Strong credit:
• BBB- credit rating (sovereign level)• Stable cash flows • Strong operating margins (over 40%)• Acceptable leverage
IFC role: Organizing 5 loans over 3 year period Total amount of financing organized by IFC:
• €148 million on own account• €126.5 million mobilization
Sea Transport
Traffic Management Wastewater Tramway Railcars Total
Year 2012-2013 2013 2013 2014 2014
IFC € 45 m € 28 m € 55 m € 20 m € 148 m
AFD € 45 m € 55 m € 20 m
EBRD € 33m € 38.5 m
ING (MIGA)
€ 33 m € 55 m € 38.5 m € 126.5 m
Total € 111 m € 45 m € 28 m € 165 m € 117 m € 274.5 m
Purpose: 5 large projects of critical importance to the city, including traffic management system, tramways, railcars and water / sanitation
Thank you!
13