Strictly Private and Confidential

Structuring Infrastructure Development Programmes in Africa

10th September 2010

Best Pan-African

Investment Bank 2009

Best Investment Bank in Africa 2009

Best African Debt House 2009

Best Investment Bank in Africa

2009 and 2010

2

Table of contents

SECTIONS

1. - Introduction to Standard Bank 3

2. - Infrastructure Sector Comments 9

3. - China in Africa 17

4. - Indicative Transaction Structures 21

5. - Discussion Points 27

3

1. Introduction to Standard Bank

4

01

“Full service

bank covering”

Standard Bank Group has a global presence operating in 17 African countries

and 16 countries on other continents including the key financial centres of

Europe, the Americas and Asia.

African-based financial services group focused on emerging

markets on global scale

Full service bank covering

Investment banking

Corporate banking

Personal and business banking

Investment management

Life assurance

Global reach in 33 countries with capabilities in world‟s leading

financial centers including London, Moscow,

Sao Paulo, Hong Kong and Beijing

Corporate and Investment Banking (“CIB”) provides services

to corporate clients, financial institutions and international

counterparties focused on emerging markets around the world

Over 45,000 employees world wide

Relationship with ICBC provides international reach and

strengthens access to what will soon be the world‟s largest

economy

“Global reach in

33 countries”

“Relationship

with ICBC

provides

international

reach”

Standard Bank Group is a South African-based financial services company with a global presence operating in 17 African

countries and 16 countries on other continents including the key financial centres of Europe, the Americas and Asia.

Rest of world Key regional officesAfrica

17 African

countries

712 branches in

South Africa

239 branches in

the rest of Africa

16 countries

outside Africa

Offices in key

regional financial

centres including

London, Moscow,

Sao Paulo,

Beijing, Hong

Kong and Dubai

5

Strategic co-operation areas

Largest bank in South Africa and Africa

Global footprint in 33 countries

Strong on the ground presence in Sub-

Saharan Africa, Argentina, Brazil, Turkey,

Russia and China with

Large product teams in Johannesburg,

Lagos and Nairobi and support teams in

London, Hong Kong and New York

Specialist expertise in Oil & Gas, Mining &

Metals, Power & Infrastructure and

Telecoms

Employs more than 50,000 people globally

Operating expertise and risk management

experience in global markets

World‟s largest, most profitable bank

3.6 million corporate banking customers

216 million personal banking customers

2009 Full Year Profit of $18.5bn

Strong balance sheet. Total assets of

$1.7 trillion

Overseas assets grew 22.9% in 2009

Unrivalled distribution network in China

Access to valuable corporate clients

Aggressive overseas strategy to support

Chinese companies “going global”

Formal co-operation areas: corporate

banking, resource banking, investment

banking, global markets & treasury,

direct investments, risk management.

Enhanced financing size and tenor,

enabling support of larger size

transactions, which include Chinese

resource and infrastructure opportunities

in Africa and selected emerging markets

Large deals in Botswana, Ghana, Brazil,

Russia

Not exclusive relationship

Standard Bank and ICBC can together deliver Chinese/African solutions for Africa

Construction clientsPower clients

The ICBC/Standard Bank Strategic Partnership

6

Recent Accolades

Global Finance Magazine – 2009

Best Africa Investment Bank (2009)

Best Africa Research Team (2009)

Infrastructure Deal of the Year for Gautrain

(2008)

Africa Investor – 2009

Best Investment Bank in Africa (2010)

Best Investment Bank in Nigeria (2010)

Best Bank in South Africa (2010)

Best Equity House in Africa (2009)

Lakatabu Expansion - Africa Industrial Deal of the Year (2009)

MTN Uganda - Africa Telecoms Deal of the Year. (2009)

Zain - Middle East Telecoms Deal of the Year (2009)

Euromoney – 2010, 2009The Banker – 2010, 2009, 2008

Deal of the Year Africa: Bonds (2010)

Deal of the Year Africa: Capital Raising (2010)

Deal of the Year Africa: Structured Finance

(2010)

African Bank of the Year (2009, 2008)

Bank of the Year, South Africa (2009, 2008)

Best Investment Bank from Africa (2009, 2008)

Best Bank in Botswana, Lesotho, Malawi, Swaziland ,

Tanzania (2009)

Deal of the Year for the Ruashi Copper Mining Project in

DRC (2008)

Deal of the Year - Botswana for National Development Bank

BWP100 million 11.25% notes due 2017 (2008)

Deal of the Year - DRC for the Ruashi Copper Mining

Project (2008)

Deal of the Year - Finland for Talvivaara Nickel Project

US$320m debt facility (2008)

Deal of the Year - Germany for Kreditanstalt fur

Wiederaufbau NGN28.7 billion 8.5% notes due by 2011

(2008)

Deal of the Year - Tanzania Electricity Supply Limited

TZS300 billion syndicated loan (2008)

Deal of the Year - Zambia Sugar Project (2008)

Deal of the Year (South Africa) for the 20% investment by

ICBC in Standard Bank (2008)

Deal of the Year Award - Bahrain for Arcapita Bank US$1.1b

syndicated Murabaha facility (2008)

Most innovative in Trade and Project Finance (2008)

Ranked No 1 in sub-saharan Africa and No 106 in The

Banker Top 1000 World Banks (2008)

Standard Bank has won various awards that demonstrate our capabilities across the entire range of advisory and funding services in Africa

EMEAFinance – 2009, 2008

Best Investment Bank in Africa (2009, 2008)

Best Investment Bank in Nigeria (awarded to Stanbic IBTC

Bank) (2009)

Best Natural Resources Deal in EMEA: Kayelekera

Uranium project (2009)

Best Oil and Gas Deal in Africa: Oando (2009)

Best Project Finance Deal in Africa: Botswana Power

Corporation (2009)

Best Project Finance House in Africa (2009)

African Banker – 2009, 2008

Investment Bank of the Year, Africa (2009)

Best Issuing House in Africa (awarded to Stanbic IBTC

Bank) (2008)

Deal of the Year - ICBC 20% acquisition of Standard

Bank (2008)

Environmental Finance Magazine - 2009

Carbon Finance Deal of the Year for Camco-Standard

Bank Structured Carbon Credits Transaction (2009)

Best Debt Bank in Africa (2009)

Best Foreign Exchange Provider in South Africa (2009)

Best Investment Bank in Africa (2009)

Best Investment Bank in Nigeria (2009)

Best Investment Bank in South Africa (2009)

A selection of recent accolades awarded to Standard Bank…

7

Standard Bank – Recent/Ongoing Africa Infrastructure Deals…

DescriptionClient Date

Advisor and lead arranger to the Strabag-led consortium being the preferred bidder for the 30 year Nairobi toll road concessionCurrent

Arranger of additional finance to Republic of Mozambique Pipeline Investment Company, which was part of the Sasol Natural

Gas Project, in order to expand the existing capacity of the pipelineCurrent

Joint lead arranger to the Bombela Consortium, for the development of the approximately US$3 billion Gautrain high-speed rail

PPP project linking Johannesburg to Pretoria, Sandton and Johannesburg International Airport

The largest greenfield rail concession currently under construction globally

The consortium consists of Bouygues TP, Bombardier, Murray & Roberts, SPG and French Metro operator RATP

2008

Joint lead arranger to Trans African Concessions for the R3 billion refinancing of the N4 Maputo toll road linking Witbank to

Maputo

First refinancing of a South African concession and realized substantial value for the shareholders

2006

Financial adviser and joint lead arranger to Lekki Concession Company Limited, for the development, financing and operation of

a USD300m toll road in Lagos State2008

Joint Mandated Lead Arranger and Underwriter to TAV Havalimanlari Holdings which was awarded a 40-year concession to

operate and maintain an existing airport in Monastir, Tunisia and a 40-year concession to design, build, finance and operate a

new airport at Enfidha, Tunisia

Debt Package of €398m

2008

8

Case Study: Lagos Infrastructure Project LCC

LCC is a Special Purpose Vehicle set up specifically to

execute the Lagos Infrastructure Project

The project is designed to deliver essential road

infrastructure and services along the Lekki Peninsular of

Lagos

The newly refurbished/constructed 49.4km of the Lekki-Epe

Expressway (Phase I), and the 20km of the Coastal Road

(Phase II), will be operated and maintained by LCC

throughout the 30-year concession term

Hidden costs of „go slow‟ and bad roads have adverse

economic, social, psychological and health impacts, on

Nigeria‟s citizenry

PPPs are a globally accepted model for financing and

delivering essential infrastructure using the private sector, and

can help bridge the gap where government resources are

insufficient.

The project takes the cooperation of all road users to ensure

that they derive the optimum benefits from the new road

systems being implemented by LCC

Standard Bank was the joint financial advisor and

mandated lead arranger with an injection of US$ 430

million

This project is the first toll road PPP in West Africa

The base layer of the newly constructed road is designed to

last 30 years. The original asphalt layer is designed to last 10

years. It will be replaced a number of times over the 30-year

concession term

9

2. Infrastructure Sector Comments

10

Why is Infrastructure Important in Africa?

The World Bank notes a 1% increase in a country's infrastructure stock is associated with a 1% increase in the level of GDP

Economic Research (Aschauer, 1989; Munnell, 1990) has demonstrated the clear linkage between infrastructure expenditure and

GDP growth (e.g. through increased productivity, reduced logistics costs etc). Conversely, inadequate infrastructure is cited as a

key constraint to investment and growth (ADB,2007). Therefore, the provision of quality infrastructure is a necessary element of any

strategy for economic integration and sustainable development in Africa

It is predicted that emerging economies will spend an estimated $22 trillion on infrastructure over the next ten years, of which China

will account for 43%. Never before has infrastructure spending been so large as a share of world GDP. Further, all US / European

post credit crunch bail out plans have the same idea

An example of sector challenges are railways. Large parts of the African railway network are substandard, owing to a lack of

investment and maintenance. Many of the publically owned railways are in deep financial trouble, and are deficit ridden, under-

funded and plagued by low productivity. Africa as a whole has a reported new annual infrastructure investment requirement of USD

40 billion with a matching annual amount needed to be spent on maintaining existing networks (World Bank 2008)

Africa‟s railway network is struggling to meet the growing demand and keep up with the technological change, facing competition

from other modes of transport and competing for finance with other important public concerns. Railway transport remains the best-

suited mode for hauling large volumes over medium and long distances (e.g. over 500km).

15 countries in Africa are land-locked and it is estimated that 40% of the continent‟s population lives in these countries, hence

efficient cross-border transportation is vital for their economic development. Rail is ideally suited to move goods to these countries

11

African Infrastructure - The Old World…

Due to smaller resources / capital markets, issues that impact on a global scale may have a larger effect upon African countries

Capital costing environment:

– Capital costs were increasing by 30% CAGR. Why? Global boom, limited suppliers / contractors and high commodity prices, leading toescalating EPC construction and supplier contract prices

Procuring African countries do not always think joined up:

– A lack of alignment between stakeholders in policy formulation and execution. Due to inadequate international benchmarking, frequent gapsbetween stakeholder “aspirations” of investor / lender market appetite and the necessary practical steps needed to facilitate investment (e.g.cost reflective tariffs, mining licences which create certainty)

– Frequent under appreciation of the criticality of adequate, reliable feedstock to encourage power investment (e.g. Nigeria) and / or arecognition that T&D issues must be solved to facilitate generation projects

– Functional organisational structures not centred on project delivery, with a shortage of multi-disciplinary professionals to act as the “clientteam”

Currency risk:

– Unless otherwise supported/structured, currency risk will cap international investor/financier interest as they usually need hard currencyrepayments / returns. Could you convince your Board to take commodity-type risks for infrastructure-type returns in a sub-Investment Grademarket?

Underdeveloped capital markets:

– Where is the exit route? How easy is it to transfer ownership? Is there local refinancing appetite/capacity?

Deal Flow and Bureaucracy:

– A major impediment. Lost time = higher cost for project developers and a reduction in development appetite

Increasing environmental oversight:

– Investors and Lenders generally prefer sustainable projects. Non-compliance with the Equator Principles is a show stopper (over 60 bankssigned up)

Skilled labour shortages:

– Shortages at Project manager, engineer and artisan levels, leaving aside stakeholder shortages

12African Infrastructure – The “New World”…

Context:

– Investing in African power / infrastructure is not usually for the marginal player – more a specialist activity so less subject to boom and bust

– Project lead times will likely take longer than the credit crunch/global recession, e.g. often 3 years plus

Developer Perspective

– Some cut backs in capital expenditure (e.g. focus on lower risk markets) but reduced bank financing capacity is a larger issue

Financing Perspective:

– Ability of African banks to raise USD has been dramatically affected, hence a focus on local currency financings which caps project size

– Current turmoil in the global credit markets has impacted on closings and increased borrowing costs. However, few clients have walked away

with more club deals seen. Limitation on banks‟ liquidity/capacity BUT project finance less affected than most debt financing classes

– Flight to ECAs and DFIs across all markets, not just Africa. Follow on question is their ultimate African appetite given competing liquidity

demands

– Next global phase will be funding the G8 banking bailouts and watching the impact on global liquidity (i.e. less money available for African

borrowers)

Supplier Perspective

– Recent softening of forward-looking equipment prices but no dramatic plummet. Note most bail-outs encourage infrastructure spending

– Suppliers‟ order books not as full for 2011 so schedule savings starting to occur (saves on IDC)

Country Perspective

– Underlying need is still there but reduced ability of oil / commodity exporting countries to pay for new capacity (e.g. banking base case of USD

60bbl v USD 80bbl)

The credit crunch has had less of a direct impact on African infrastructure than elsewhere but is still of note…

13

What is different about a city?

Particular construction and integration challenges

– Multiple greenfield sub-sectoral projects

– Needs close integration between projects (project on project risk)

– How do you finance them all? All need to be in place for the city to effectively function

Hybrid nature of risk profile

– Property Development? Meaning high equity component, high reward property sector investors needed

– Infrastructure? Meaning lower equity component, lower reward sector investors needed

Few global parallels that have raised third party finance

– Arabian Gulf comparators (e.g. Dubai Palm) executed through listed / capitalised property companies

Usually, multiple jurisdictions responsible for separate services (e.g. power, water, telecoms) which adds to the complexity

– Once built, can you really isolate a project? A tenet of limited recourse project financing

– Who owns what and how do they integrate with each other?

What is the ultimate source of repayment?

– Residential Sales, Property Levies (implies property sector risk profile)

– Municipal Levies (implies infrastructure sector risk profile, but how are the above assured?)

14Utility Financing – Business and Financing Challenges

Structural

– Adequate provision of electric power, together with water and sanitation is clearly a pre-requisite for a successful city

– Will the city have its own power supplies or be dependent on the national grid?

– How will the city receive raw / potable water? Will the city have its own waste water treatment facilities?

– Utility financing has established global business models, centred around clear performance rights and obligations and cost recovery

Cost Recovery

– How will Investors in utilities secure their returns / cost recovery?

– Through Power Purchase Agreements (PPAs), Water Purchase Agreements (WPAs) of Waste Treatment Agreements (WTAs)?

– Who will be the counterparty for such agreements? And how will they recover their costs?

Third Party Challenges

– Is there adequate fuel supplies for the Project? Reliable volume and price

– Is there an adequate HV Transmission Network to supply the city? And / or distribution networks?

– Is there an adequate water trunk mains, and / or waste water treatment plants?

– How will utility provision be incorporated into the other pending infrastructure requirements, e.g. local roads, railways and the

construction of the same?

15

Railway Financing - Business and Financing Challenges

Railways are an important mode of transport but are not without challenges. Examples of which are:

– Rail faces a high threat of transport mode substitution (from road transport and / or marine, depending on location)

– Although a long lasting asset, railways need to be maintained to promote efficiency – few are…

– Financiers usually have limited appetite for farebox/traffic risk. Key financing issue is usually affordability

Key railway financing challenges include:

– Aarhus University has shown that most global railway projects have over-estimated potential ridership, hence their commercialrisk is proven

– Limited capacity and / or willingness of private operators to finance track renewal

– Railway concession returns have often been low (e.g. sub 10% IRRs)

– Effective and efficient regulation of private operators is needed

– Road transport operators rarely pay the full cost of their transport mode

Specific African challenges include:

– No significant experience of mass transit which is centrally organised (e.g. dependence on taxi services)

– Interest in rail has lagged growth of cities so very hard to implement given growth

– Where it exists, ageing and poorly maintained rail network conditions

– Few benchmarks of where to set fares to optimise the market‟s interest

– Very low investment in rail. World Bank estimated only 0.2% of African GDP would be spent on rail 2005 – 2015

– Little public consensus on whether the user should pay, whether today‟s taxpayers should pay or tomorrow‟s tax payers / usersshould pay

16

Road Financing - Business and Financing Challenges

Roads are a vital mode of transport but are not without challenges. Examples of which are:

– Roads must be maintained to promote economic efficiency

– Congestion is a global problem

Key road financing opportunities and constraints include:

– Potential for toll roads in areas with high (wealthy) urban population and / or for long-distance corridors without substitutes

– Need for high car ownership in market to create traffic / consumer base

– Globally, there is often a consumer resistance to paying road tolls in markets where they were previously free.

– Effective and efficient regulation of private operators is needed, as road transport operators rarely pay the full cost of theirtransport mode, e.g. impact on pollution, accidents etc

– However, South African (N1, N3, N4) and Nigerian (Lekki Toll Road) has shown it is possible to finance toll roads through projectfinance

Specific African challenges include:

– Ageing and poorly maintained road network conditions

– Minimal high speed motorway road links (outside of South Africa)

– Governments are failing to develop an effective consultation mechanism to involve community members

– Limited stakeholder / bureaurcratic capacity

– Little public consensus on whether the user should pay, whether today‟s taxpayers should pay or tomorrow‟s tax payers / usersshould pay

– Therefore, there is clearly some commonality in the challenges facing the Africa road and rail sectors

Source: Standard Bank

17

3. China in Africa

18

A reciprocal relationship: Resources for Infrastructure?

Copper

Standard Bank and ICBC have a strategic

partnership dedicated to growing China-

Africa trade and investment in a manner

that benefits both sides.

Oil

Iron Ore

Precious metals

(gold, platinum)

Goods:

Infrastructure equipment

Construction machinery

Electrical appliances

Consumer goodsTimber

Steel metals

(Chrome, Manganese,

Nickel, Zinc)

Financing:Investment

Soft Loans

Commercial bank loans

Export Credit Guarantee

Infrastructure expertise:

Hydropower dams

Thermal power plant

Nuclear power plant

Wind/Solar power

Roads

Railways

Airports

Ports

ICT networks

China sources 30% of its oil imports from African countries, plans to increase this to 40% over next 10 years.

19

Infrastructure expertise

– Learnings from 3 decades of the world‟s largest infrastructure expansion programme

– Increasingly high-tech equipment and processes. E.g. turbines, switch-gear; refineries, railway engines

– Chinese contractors are amongst the most competitive contractors in Emerging Markets driven by a number of factors, includinglow costs (derived from a low cost base), access to financing and strategic support from China Inc.

Financing

– Driven by $2.5 trillion of national foreign reserves, and need to prevent currency appreciation

– China Eximbank will allocate $10bn in soft loans to African projects over next 3 years

– Commercial lending: increasing commercial and project finance loans by Chinese Commercial banks: ICBC, China DevelopmentBank (CDB), China Construction Bank, Bank of China

– Export Credit and PRI cover from Sinosure, China‟s export credit agency

Strategic objectives: an appetite for long-term African risk

– The Chinese Government‟s „Go Global Strategy‟ launched in 2002 aims to create globally competitive players in strategic sectors

– Chinese companies encouraged to expand business with Africa to:

► Secure future supplies of key industrial commodities required for China‟s domestic development needs

► Develop infrastructure projects which support the extraction and export of these commodities from the originating country

► Open up current and future African markets for Chinese consumer and capital goods exports

► Develop Chinese management expertise in overseas business

► Maintain and build closer political relationships with African countries

What solutions do Chinese partners offer Africa’s infrastructure challenges?

20

Chinese lending in Africa is designed to gain access to key markets

Resources

model

Independent

model

China Ex-Im is the key funding institution through which Chinese funding in Africa is channelled

Ex-Im has already extended US$5.5 billion in concessional funding (US$8 billion in additional loans may have goneunannounced)

Ex-Im has an explicit mission to promote trade between China and regions such as Africa

Ex-Im Bank

Chinese financial support is often very attractive - to support trade and facilitate the participation of Chinese construction

companies and SOEs. Use of Chinese equipment and labour are key elements to Chinese funding and are almost as

important as access to resources

Increasingly two models are employed by China in Africa – the “Resources Model” and the “Independent Model”:

Resources model:

– “Resources for infrastructure” in which repayment is effectively made in natural resources

– Loan proceeds are never transferred to the host government:

►a framework agreement is signed covering a program of infrastructure investment;

►government then awards the infrastructure projects (e.g. a new railway line), supported by Ex-Im credit to a

Chinese construction company; and concurrently

►government awards a Chinese company rights to produce oil, or another natural resource;

►purchase of oil/resource also agreed with China thereby facilitating the repayment of the loan

– Funding relatively attractively priced and includes low rates, grace periods and elements of grants and concessional

funding

– Other sweeteners also improve Chinese funding attractiveness - debt relief, ability to rapidly build infrastructure etc

Independent model

– Chinese construction companies – winning construction and equipment supply contracts based on normal fundamentalskills, resources and pricing, which may lead to concurrent / subsequent Chinese funding offers

– Competition tends to come from other Chinese contractors or other foreigners (Brazilian, European, Japanese)

– Local African construction companies rarely compete on larger projects - limited scale, experience or financial standing. Foreign funders (whether Chinese or non-Chinese) will rarely take a risk on local contractors (outside of South Africaand leading Nigerian contractors)

21

4. Potential transaction structures

22

Structure is linked to Funding

Given potential project scale, a transaction may seek to attract a Chinese Bid (including Chinese Sponsors, Equipment

Suppliers, Contractors and Financiers). Chinese financiers will likely support a Chinese Bid, if requested.

Equity/ Quasi Equity

Participants (30% – 50%)

Developers

Infrastructure / Private equity funds

Sovereign funds

Operators

Contractor and equipment suppliers

Projects evaluated on Internal Rate of

Return (“IRR”) and Net Present Value

(“NPV”) basis

Debt Participants (50% – 70%)

Export Credit Agencies (ECA‟s)

Infrastructure funds

Development Finance Institutions (DFIs)

International Banks

Nigerian Banks

Sovereign Policy Lenders

Projects evaluated on counterparty credit

quality and debt service coverage ratios

23

Extraction/Processing

ProjectOutputResource

Power

GenerationWater

Fuel

Railway Roads

Ports

Example – Even Mining Projects need Infrastructure

Railway Roads

Issues:

• Often more complex infrastructure

requirements than resource issues

• Locational challenges

• Contractor appetite

• Stakeholder understanding

24

Typical Infrastructure Project Contractual Structure (Wagon Wheel)

Investors Lenders

Contractor(s)

Operator

Shareholders Agreement

Input Supplier

Government

Project Company

e.g. Power Supply Contract

Support Agreement(s)

Operation and

Maintenance Contract

EPC Contracts)

Equity Guarantees Facility

Agreements

Concession Agreement

Security

Agreements

Authority

25

Typical PPP/Infrastructure Project

Sponsor 2

GuaranteeMinistryFinance

Debt

Offtaker / Authority

Sponsor 1

SSA

O&M Contract

Equity Funding+

ESIA

ECAs/Banks

Acknowledgement + Consent

HoldCo

ConsultantEPC

Contract

Contractor

Project Company

Revenue Doc

Land Owner

Land lease

Agmnt

The Financiers Key Focus in

Infrastructure Deals

26

Typical African Infrastructure Project Tender Process: Summary Activities

Estimated

Timeframe:

12 months

PHASE 5

1. Negotiation of

Project

Agreements

2. Achieving

Financial Close

Estimated

Timeframe:

6 months

PHASE 4

1. Bid Evaluation

2. Bid Clarifications

3. Preferred Bidder

selection

Estimated

Timeframe:

6 months

PHASE 3

1. RFP Clarifications

2. Tender Period

- Bid Preparation

- Bid Submission

Estimated

Timeframe:

4 - 6 months

PHASE 2

1. Pre Qualify

Bidders

2. RFP Development

3. RFP Issuance to

Pre Qualified

Bidders

Estimated

Timeframe:

12 months

PHASE 1

1. Prioritise Key

Project

Objectives

2. Agree Project

Concept

3. Obtain

Stakeholder

Approval

Largely due to sub-optimal enabling legislation and regulations, together with limited client capacity and skills, it is not

unusual for African infrastructure projects to take 3-4 years (or longer) to close. It is usual that good projects will

happen eventually but not always in a OECD timeframe

27

5. Discussion Points

28

Introduction - What can go wrong…..

Many African deals go wrong due to the associated Project inputs / outputs……

The main focus of the Project is only one issue to resolve, all associated inputs (and constituents to output) must also be solved to

ensure project success

If you do not, problems may include:

– Projects sited in the wrong physical location

– Too great a Project inter-dependency to raise third party finance

– Increased environmental emissions and requirement for remedial action

– Unclear business case, thus impeding ability to raise third party finance

– High associated infrastructure expenditure increasing costs

– Ultimately, the risk of Lender dissatisfaction with Project and no Financial Close

29

Disclaimer

Confidentiality and disclaimer

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intrinsic risks involved in transacting in any products; no guarantee is provided for the investment value in a product; any forecasts based on hypothetical data are not

guaranteed and are for illustrative purposes only; returns may vary as a result of their dependence on the performance of underlying assets and other variable

market factors and past performances are not necessarily indicative of future performances. Any client that is not a merchant banking client as defined in the

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investment or structure to its circumstances, there may be limitations on the appropriateness of any information provided by a member of the Standard Bank group

and careful consideration must be given to the implications of entering into any transaction, with or without the assistance of an investment professional.