The BSTDB Perspective¤ΡΑΠΕΖΑ... · February 2014 Tiranatransport terminal PPP project...

PPPs:

The BSTDB Perspective

13 November 2014

BSEC: A Dynamic & Diverse Region

Overview of Greater Black Sea Region

Ukraine

Capital: Kiev Population: 45.6mGDP: $176bnGDP per cap.: $3,864

Romania

Moldova

Capital: ChisinauPopulation: 3.6mGDP: $7.3bnGDP per cap.: $2,038

Black Sea Region Population: 327mGDP: $3,594bnWeighted av. GDP per cap.: $10,979

GDP per cap.: $3,864Capital: Bucharest Population: 21.4mGDP: $169bnGDP per cap.: $7,905

Bulgaria

Capital: Sofia Population: 7.3mGDP: $54.3bnGDP per cap.: $7,243

Albania

Russia

Capital: Moscow Population: 143.1mGDP: $2,007bnGDP per cap.: $14,027

GDP per cap.: $2,038

Georgia

Capital: Tbilisi Population: 4.5mGDP: $15.8bnGDP per cap.: $3,520

2Sources: Country Statistical Agencies & Central Banks, IMF; data shown is for 2012

Albania

Capital: Tirana Population: 3.2mGDP: $12.4bnGDP per cap.: $3,845 Armenia

Capital: YerevanPopulation: 3.3mGDP: $9.9bnGDP per cap.: $3,027

Azerbaijan

Capital: Baku Population: 9.2mGDP: $68.7bnGDP per cap.: $7,442

Greece

Capital: Athens Population: 11.4mGDP: $249bnGDP per cap.: $21,799

Turkey

Capital: Ankara Population: 74.7mGDP: $789bnGDP per cap.: $10,561

BSEC: A Diverse Region – Credit Ratings

Azerbaijan

Moldova

0.5%

Armenia

1.0%

Georgia

0.5%Country Moody’s S&P Fitch

Albania B1 B NR

ShareholdersShareholder Credit Ratings

(as of 1st June 2014)

Unallocated

0.5%

Albania

2.0%

Azerbaijan

5.0%

0.5%

Ukraine

13.5%

1.0%

Greece

16.5%

Russia

16.5%

Bulgaria

13.5%

Albania B1 B NR

Armenia Ba2 NR BB-

Azerbaijan Baa3 BBB- BBB-

Bulgaria Baa2 BBB BBB-

Georgia Ba3 BB- BB-

Greece Caa3 B- B

Moldova B3 NR WR

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Romania

14.0%

Turkey

16.5%

Romania Baa3 BBB- BBB-

Russia Baa1 BBB- BBB

Turkey Baa3 BB+ BBB-

Ukraine Caa3 CCC CCC

PPPs Defined

PPP Defined

Procurement of a public service Procurement of a public service from the private sector on a long-term basis−Design, Build, Finance, Operate, Maintain and −Transfer back at end of concession, 20 –50 yrs

• Transfer of risks from public to private sector

• Private sector management skills• Private sector management skills• Public sector is regulator rather

than executor

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PPPs vs. Design Build: Risk Allocation

5

PPPs vs. D/B: Benefits

Cost and Delivery Benefits

Price Exceeded Contract

Cost and Delivery Benefits

� Known cost and time

+

� Lower life cycle costs � Lower public debt� Faster execution � Guaranteed service level

Delivered Late

� Guaranteed service level� Developed construction

sector

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Notes: In only 8% of PFI projects surveyed was the delay more than two months Source: National Audit Office

PPPs: Concession Contract & Financing

Risk allocation−Pre-existing conditions−Events of Default and Cure periods−Limitations for competing facilities−Limitations for competing facilities−Termination provisions

Construction−Right of way & Permits acquisition and timing−Clarity of specifications and rules for scope change

Concession term−Longer terms often mean greater financial viability−Tax consequences−Tax consequences

Mixture of financing sources−Sponsor / Client strength−Capital markets conditions

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� Market Size & Ultimate Pipeline

� Politics / Young Democracies / Minority Governments

PPPs: BSEC Market Characteristics

� Domestic Budgets & International Support (e.g. EU Cohesion & Structural Funds

� Budgets / EURO adoption, peg, tracking / Maastricht Criteria

� Bankability / Country Risk (e.g. Ratings, CDS, etc.)

� Other political considerations (e.g. Euro 2012, Sochi Olympics 2014, etc.)

� Potential Impact of EU Criteria for off-balance definition

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� Potential Impact of EU Criteria for off-balance definition

PPPs: Post GFC and Tight Budgets

Post 2008 Impact:

• Country Budgets constrained

• Backlash of PPPs (EU & UK) & off-budget financing

• PPP pipeline in Europe stopped

Now:

• Revived interest in PPPs as long term opportunity for attracting private sector to opportunity for attracting private sector to assist in infrastructure development

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PPPs: The BSEC Opportunities

LatestUpdate

Project Country Stage Value($MM)

Sector

Sept.2014 Upgrade of public hospital laboratories through a PPP

Albania Project inplanning

Social and Health laboratories through a PPP project

planning

February 2014 Tirana transport terminal PPP project

Albania Project in tender

56 Transport

February 2012 Milot-Morine highway concession

Albania Project in tender

160 Transport

October 2014 Calarasi-Silistra bridge PPP project

Bulgaria Project in planning

Transport

April 2012 Pleven regional water PPP project

Bulgaria Project in tender

Water & Waste

July 2014 New deep water sea port of Anaklia through PPP

Georgia Project in tender

Transport

March 2014 Kvemo Kartli Solid Waste Management

Georgia Project inplanning

Water & Waste

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Latest Update Project Country Stage Value($MM)

Sector

October 2014 Sports PPP project Greece Project in tender Social and Health

October 2014 Concession of Greek regional airports (Group A)

Greece Project in tender Transport

October 2014 Concession of Greek regional airports (Group B)

Greece Project in tender Transport

October 2014 Athens New Central Fish Market Greece Project in tender 16 Transport

Sept.2014 Waste Management PPP project in Epirus

Greece Project awarded Water & Waste

August 2014 Three rural broadband development Greece Project awarded 215 Telecom

July 2014 Athens Urban Transport Ticket PPP Greece Project signed Transport

May 2014 Crete’s Kasteli airport concession Greece Project in tender 2600 TransportMay 2014 Crete’s Kasteli airport concession Greece Project in tender 2600 Transport

May 2014 Attica 10 new schools PPP project Greece Financial Close 80 Social & Health

May 2014 Waste Management PPP project in Corfu

Greece Project in tender Water & Waste

April 2014 Attica schools PPP project Greece Financial close 80 Social & Health

February 2014 Waste treatment unit via a PPP in Ilia Greece Project awarded Water & Waste

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Sector

January 2014 Lefkas fire station PPP project Greece Project in operation

43 Social & Healthoperation

January 2014 Integrated Waste Management System in Western Macedonia region via PPP

Greece Project awarded 61 Water & Waste

December 2013 PPP for waste processing unit in Serres

Greece Project awarded 88 Water & Waste

December 2013 East Macedonia & Trace waste management PPP

Greece Financial Close 176 Water & Waste

November 2013 Nafplio marina PPP project Greece Project in planning

13 Transport

October 2013 Broadband development project in rural areas

Greece Project in planning

218 Transportrural areas planning

October 2013 Implementation of waste management facilities in Achaia via PPP

Greece Project in tender Water & Waste

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Sector

February 2013 Concession of the Public Water Supply and Sewerage in Comrat Municipality

Moldova Project in tender Water & Waste

June 2012 Chisinau International Airport Moldova Project in planning 189 TransportJune 2012 Chisinau International Airport redevelopment PPP

Moldova Project in planning 189 Transport

October 2014 Turnu Magurele-Nikopole bridge PPP project

Romania Project in planning Transport

October 2014 CET Govora Biomass PPP project Romania Project in planning Energy

February 2014 Bucharest metro line 7 (Bragadiru-Volintari)

Romania Project in tender 2000 Transport

December 2013 Concession for DBFOM of Comarnic-Brasov motorway

Romania Project awarded 1626 Transport

October 2013 Craiova-Pitesti highway concession Romania Project in tender Transport

September 2013 Bucharest district heating service PPP project

Romania Project in planning Energy

December 2012 Concession for DBFOM of Bucharest South Ring Road Motorway

Romania Project in tender Transport

September 2012 Bucharest elevated highway PPP Romania Project in planning 2000 Transport

May 2012 Bucharest airport project Romania Project in planning 271 Transport

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Sector

October 2014 M3 Ukraine-sections 124-173 km and 173-194 km

Russia Project in tender 406 Transport

October 2014 Moscow Central Ring Road PPP (fifth section)

Russia Project in tender 951 Transportsection)

October 2014 M-11 Moscow-St. Petersburg highway (km 208-km 258)


October 2014 Moscow-Kazan high speed line PPP Russia Project in planning 25000 Transport

September 2014 Levashovo waste treatment plant PPP Russia Project in tender 240 Water & Waste

September 2014 Moscow Central Ring Road concession (third section)


September 2014 Moscow Central Ring Road concession (fourth section)


August 2014 Leningrad Regional Center for Medical Rehabilitation PPP project

Russia Project in planning Social & Health

May 2014 Moscow Central Ring Road concession (first section)

Russia Project signed 1390 Transport

May 2014 M-11 Moscow-St Petersburg highway (543-684 km) PPP

Russia Project awarded 2650 Transport

April 2014 Lena River bridge PPP project Russia Project awarded 1700 Transport

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Sector

February 2014 Vyshny Volochek Bypass M11 Russia Project signed 1421 Transport

February 2014 Orsk oncology center PPP center Russia Financial close 30 Social & Health

February 2014 Construction of the new dry cargo district of port Taman

Russia Project in planning Transport

October 2013 River Kama bridge concession (Udmurtia Republic)

Russia Financial close 427 Transport

September 2013 Sheremetyevo International AirportNorthern Terminal

Russia Project in planning Transport

February 2013 Belkomur railway line PPP project Russia Project in planning 6000 Transport

August 2012 Small Ring of the Moscow Railway (MRR) PPP project

Russia Project in planning 3200 Transport

June 2012 Neva water PPP project in St. Petersburg

Russia Project in tender 400 Water & Waste

June 2012 Central section of Western High-Speed Diameter toll road in St. Petersburg

Russia Financial close 4056 Transport

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Sector

November 2014 Ankara Etlik Health Campus Turkey Project awarded 1500 Social & Health

October 2014 Adana PPP Integrated Health Campus Turkey Project signed 636 Social & Health

August 2014 Milas Bodrum airport terminals concession

Turkey Project in operation

Transport

July 2014 Kayseri integrated health campus PPP project

Turkey Project signed 572 Social & Health

June 2014 Derince Port concession Turkey Project awarded 543 Transport

March 2014 Dalaman airport concession in southwestern Turkey

Turkey Project awarded 980 Transport

January 2014 Istanbul Sabiha Gokcen Airport concession

Turkey Project in Operation

530 Transport

December 2013 Trans-shipment container terminal Turkey Financial close 413 TransportDecember 2013 Trans-shipment container terminal AsyaPort

Turkey Financial close 413 Transport

October 2013 Golden Horn port project Turkey Project awarded 500 Transport

October 2013 North Marmara highway+3rd BoshorusBridge

Turkey Financial close 2500 Transport

September 2013 Istanbul-Ikitelli PPP Integrated Health Campus

Turkey Project awarded 511 Social & Health

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Sector

August 2013 Mersin International Port Turkey Project in operation

755 Transport

July 2013 Istanbul Salipazari Cruise Port concession

Turkey Project awarded 350 Transport

July 2013 Ankara TPHA+TPMDA Campus project Turkey Project awarded Social & HealthJuly 2013 Ankara TPHA+TPMDA Campus project Turkey Project awarded Social & Health

June 2013 Bakirkoy Integrated Health Campus Turkey Project in tender Social & Health

June 2013 Istanbul Uskudar Public Hospital Turkey Project in tender Social & Health

May 2013 Istanbul third airport BOT project Turkey Project awarded 9726 Transport

April 2013 Eskisehir City Hospital PPP Turkey Project in tender Social & Health

March 2013 Gebze-Izmir motorway BOT project Turkey Financial close 2800 Transport

March 2013 Highways and Roads Privatization Turkey Project cancelled 5700 Transport

August 2014 Grain Terminal project at Odessaseaport

Ukraine Financial close 125 Transport

April 2014 Yushnyi seaport concession Ukraine Project in planning Transport

November 2013 Kyiv belt road PPP Ukraine Project in planning Transport

October 2013 Boryspil airport concession Ukraine Project in planning 280 Transport

September 2012 Kyiv’s fourth subway line PPP Ukraine Project in planning Transport

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Istanbul Sabiha Gokcen Airport (Turkey)

Project Cost BSTDB Participation: EUR 29 million

Borrower Istanbul Sabiha Gokcen Borrower Istanbul Sabiha Gokcen Uluslararasi Havalimanlari Yatirim Yapim ve Isletme A.S.

Term 12 years

Summary Description

Provision of a project finance facility to an SPV to operate and maintain the existing domestic and international terminal in accordance with the accordance with the international norms and standards and to construct a new international terminal building and its complementaries via BOT model during the 30 months investment period

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TAV Izmir Airport (Turkey)

Project Cost

BSTDB Participation: EUR 40million

Borrower TAV Ege Terminal Yatirim Yapim ve Isletme A.S.. Turkey, an SPV ve Isletme A.S.. Turkey, an SPV incorporated by the TAV Airports Holding

Term 16 years

Summary Description

Provision of a project finance facility to a special purpose vehicle, TAV Ege to: 1. Demolish the existing domestic terminal and procure, design, engineer and construct a new domestic terminal building and its complementaries (i.e. new access road, multi storey car park and open car park) in car park and open car park) in Adnan Menderes Airport in Izmir Turkey; 2. Renovate the international terminal; 3. Operate and maintain the Adnan Menderes Airport domestic and international terminals in accordance with the international norms and standards under the provisions of the Lease Agreement until the end of 2032.

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Pulkovo Airport (Russia)

Project Cost

BSTDB Participation: EUR 15 million

Borrower The Northern Capital Gateway LLC is a limited liability company a limited liability company representing the winning consortium "Northern Gateway consortium" for the construction, operation and maintenance of the Pulkovo Airport

Term 15 years

Summary Description

A project finance loan with proceeds earmarked for financing of costs related to expansion, operation and maintenance of Pulkovo Airport in St. Petersburg, Russia. The St. Petersburg, Russia. The Operation is the first Russian PPP (public-private partnership) project.

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PPPs: Hierarchy of Needs - engaging private sector to Infrastructure Investment

Execution Capacity

(e.g. track record, people & expertise)

Pipeline(e.g. Market size & ultimate pipeline / equitable risk transfer and bankability / government’s long

term commitment)

Framework(e.g. Political will & buy in / financial discipline / clarity within domestic laws &

procurement process / coordination between government departments & agencies / good public consultation / reliance and use of experienced

international advisors)

Thank you

BLACK SEA TRADE AND DEVELOPMENT BANK

Roman MatkiwskyDirector, Energy & InfrastructureE: [email protected]

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E: [email protected]

The BSTDB Perspective¤ΡΑΠΕΖΑ... · February 2014 Tiranatransport terminal PPP project...

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