Regional Conference on The Investment Plan for Europe Solutions for Investing in Transport Investors Expertise for Project Financing

Transcription

1 Regional Conference on The Investment Plan for Europe Solutions for Investing in Transport Investors Expertise for Project Financing Ljubljana, Slovenia, 22 April 2016

2 The EBRD The European Bank for Reconstruction and Development: An international financial institution promoting transition to market economies by investing mainly in private sector development and entrepreneurship Established in 1991; headquartered in London, the Bank has 42 regional offices Owned by 64 countries and two intergovernmental institutions AAA rated, largest single investor in the region of operations (36 countries from central Europe to central Asia and the southern and eastern Mediterranean): EUR 107 billion in more than 4,400 projects since

3 Mission and Vision: 3 Key Principles Promotes transition to market economies, private ownership and good governance with respect for people and environment. Invests in financially viable and sustainable projects Transition Impact EBRD Supports, but does not replace, private investment. Provides financing otherwise not available on reasonable terms Sound Banking Additionality 3

4 Where the EBRD invests 2 May,

5 EBRD Transport Team Transport Team is part of EBRD Infrastructure Business Group with over 30 banking and sector professionals Headquartered in London, with dedicated sector coverage bankers in local EBRD resident offices Dedicated in-team specialists to support project needs including procurement, sustainable strategies and monitoring EBRD offers banking services (debt and equity) to clients across every transport mode: railways, maritime, aviation and roads 1 More info at Transport at a glance 2 EUR 14.0 billion invested Total project value: EUR 52.3 billion 277 projects 33 of the EBRD s countries of operation 1. Urban Transport is competence of the Municipal & Environmental Infrastructure Team 2. Data at end December

6 EBRD Tailored Financing Debt Loans to the Company or SPV up to 35% of LT financing Co-financing with commercial banks and IFIs Syndication under preferred creditor status Infrastructure Bonds and other capital market instruments Loans to the Holding Company or bond participation for PPP Debt Restructuring Hard/local currency. Fixed/floating rates Equity Investing with majority sponsor to reduce equity burden and add partnership value. No more than 25% Common or preferred stock Privatisation and initial public offering (IPO) of Infrastructure or PPP HoldCo s Mezzanine equity and subordinated debt Infrastructure funds Pre-Privatisation restructuring equity Technical Cooperation EBRD brings in additional financial capital and technical assistance (TC) to economically viable projects 6

7 EBRD s presence in Transport Sector Portfolio by Region Portfolio by Sector South-Eastern Europe 25% 68 projects/ 3.5 bn Turkey, 5% 12 projects/ 0.6 bn Central Asia 12% 34 projects/ 1.7 bn Central Europe and Baltics 17% 62 projects/ 2.4 bn Road 46% Other 0.5% 85 projects/ 4 projects/ 6.5 bn 0.1 bn Aviation 6% 41 projects/ 0.9 bn Intermodal 5% 17 projects/ 0.7 bn SEMED 2% 2 project/ 0.3 bn Ports and Shipping 9% 54 projects/ 1.2 bn Russia 20% 41 projects/ 2.8 bn Regional 2% 4 projects/ 0.2 bn Eastern Europe and Caucasus 17% 54 projects/ 2.4 bn Rail 34% 80 projects/ 4.7 bn The Bank supports the development of efficient multimodal networks, investing a total of EUR 14 billion across all sectors and regions to support 277 projects as of December

8 EBRD s Transport Portfolio EBRD Financing EUR14bn Project Numbers (277) Sub-sovereign 15% Private 26% Sub Sovereign 4% Private 38% Private Sovereign Sub Sovereign Sovereign 27% Private Sovereign Sub Sovereign Sovereign 59% EBRD s transport portfolio, includes 26% private sector financing by volume and 38% by number of projects, as of end December

9 EBRD Financing in Focus EU Countries EBRD Financing EUR 2.6bn 4% 3% 16% 30% Bulgaria Croatia Czech Republic Hungary Romania 23% 22% 2% Slovak Republic Slovenia Italy, Austria and Czech Republic (since end 2007) are not EBRD countries of operation Of the remainder, EBRD supported transport projects with a total value of 14.4bn and EBRD financing amount of 2.6bn EBRD financing in these countries accounts for 19% of total EBRD financing in the transport sector 9

10 EBRD Financing in Focus EU Countries EBRD Financing EUR 2.6bn EBRD Private Financing EUR 906m 34% 5% Private State PPP Financing Private 66% 95% EBRD financing of private sector transport projects in these countries accounts for 34% of the total PPPs support accounts for 95% of this financing 2 May,

11 EBRD s Private Deal List in focus EU Countries Country Name EBRD Financing m Closing Slovak Republic R1 Motorway Bond Refinancing - Slovakia Slovak Republic R1 Motorway - Slovakia Hungary M6 Motorway Equity Financing Tolna Hungary M6 Motorway Equity Financing Duna Hungary M6-M60 Motorway Hungary M6 Motorway Refinancing Hungary M6 Motorway Hungary Hungary M5 Refinancing Hungary M5 Phase II Hungary M5 Concession Motorway B.O.T Hungary M1-M15 Motorway Project Czech Republic Grandi Stazioni Ceska Republika Czech Republic Railway Rolling Stock Czech Republic CSA Airline Bulgaria PIMK Logistics Croatia Port of Ploce Liquid Bulk Terminal EBRD finance EUR 906 million across 16 Projects Focus EU countries: Greece, Bulgaria, Romania, Czech Republic, Slovakia, Croatia, Hungary 11

12 What does EBRD look for in a PPP? PPPS are complex, time consuming and costly to prepare; key success factors include: Clear, consistent legal framework Government PPP policy Project in line with Government objectives having political support PPP Champion, preferably a central PPP unit Feasible project, based on robust cost-benefit analysis/eirr Compliant with EBRD Environmental & Social Policy Realistic expectations of timing Experienced international advisers appointed to help prepare and implement PPP Efficient risk allocation Open and competitive tender to select concessionaire Commitment to PPPS throughout the project life cycle 2 May,

13 Where are the Challenges for PPPs? Key challenges include: Inadequate legal framework Insufficient government and political support Limited institutional capacity Poorly prepared project, lack of baseline data Timelines driven by political considerations Lack of funding for experienced international advisers Directly negotiated deals Risk premium applied to financing cost Eurostat requirements for Off balance sheet treatment 13

14 EBRD Support for PPPs Dialogue on PPP policy and process Capacity building: workshops; seminars; training (IPPF) Legal support to develop legislative framework (Legal Transition Team) Guidance on bankability Environmental and Social Gap Analysis Technical Co-operation Support for project preparation (Donor funds, IPPF) Letter of interest to support tender Roadshow host Public Authorities Private Sector Non-exclusive dialogue with potential bidders pre-submission Review of financing instruments (equity, debt) and indicative financing terms Review of Environmental and Social concerns Debt syndication and hedging, as needed Honest broker and long term partner Refinancing and restructuring support throughout project lifecycle - 14

15 EBRD s Infrastructure Project Preparation Facility (IPPF) EUR 40 million, from Bank s net income allocation under Shareholders Special Fund over 3 year ( ): o o PPP Window ~EUR 20 million Public Sector Window ~EUR 20 million Covers all EBRD Counties of Operation Sector focus on Transport and Municipal Infrastructure Dedicated IPPF Unit in EBRD Infrastructure Business Group Framework consultants selected: 4 consortia under each Window First Transport PPP project preparation supported in Egypt 15

16 IPPF Policy and Capacity Building INFRASTRUCTURE POLICY SEMINARS Policy Dialogue Seminars (Facilities Management PPPs November, 2015) Second seminar in progress (Performance-based Contracting for Roads July 2016) KNOWLEDGE PLATFORMS International Infrastructure Support System (IISS) project dissemination Global ViP peer to peer project support Seminar on IISS and GViP for EBRD clients planned for September in Istanbul PPP CERTIFICATION Body of Knowledge course material now ready Training organisations being selected -- launch by May IPPF to support cost on matching basis 16 16

17 PPP Case Studies 17

18 a a PPP Case Study R1 Motorway, Slovakia Client: Original EBRD Finance (2009): Refinancing (2013): Granvia, a special purpose vehicle owned by VINCI Concessions SA and Meridiam Infrastructure Fund EUR million of senior debt (total EUR 984 million) EUR 200 million of senior project bond (total EUR 1,242 million) BBB+ rated, 26-year tenor Project: Design, construction, finance, operation and maintenance of 51.6 km of motorway between Nitra and Tekovske Nemce and the Banska Bystrica Northern Bypass in the Slovak Republic First motorway construction project in Slovakia financed under a PPP scheme and also successfully refinanced via a project bond On time and on budget completion in 2012 Timetable: Tender initiated in Dec 2007 and deal closed in August 2009 EBRD engagement: Concession Features: Awards: EBRD instrumental in securing commercial financing and successful financial close in 2009 at the height of financial crisis No FX risk (Slovakia adopted EUR as currency in 2009) International Arbitration agreed Availability Payments / no Traffic Risk Step In rights for Lenders via Direct Agreement signed PFI Awards 2013: Bond Deal of the Year (Europe) 18

19 a a Case Study M6 Motorway, Hungary Client: EBRD finance: Type of finance: Total Project cost: Year: 2015 Project description: Impact: M6 Duna and M6 Tolna, two Concession Companies incorporated in Hungary, awarded in 2004 and 2008 respectively, concession contracts to design build finance operate Phases I and II of the M6 Motorway. EUR 30 million Equity investment EUR 101 million Acquisition of minority equity stakes in M6 Duna and M6 Tolna, the concessionaires of the M6 Motorway Phases I and II in Hungary. Development of a Secondary Market for PPPs in Hungary through an equity investment alongside renowned private institutional sponsors in the infrastructure sector, allowing new sources of capital and new types of more sophisticated financiers (e.g. equity funds) to enter the market. Improvement of standards of corporate governance through adoption of best market practices The Project promotes the Bank s vision of market-based transport networks by supporting a secondary market transaction together with other financial and institutional investors. 19

20 a a Case Study M6 Motorway PPP, Hungary Client: EBRD finance: Type of finance: Total Project cost: Year: 2005 M6 Duna, a consortium set up by Bilfinger, Porr Infrastruktur and Swietelsky International EUR 25.0 million Senior Loan EUR million Project description: Design, construction, operation, maintenance and financing of 58 km of M6 motorway from Budapest towards the border with Croatia under a 22 year concession EBRD non-financial contribution: Upfront environmental due diligence Active Lender participation Mobilization of co-financing Impact: Supporting the first successfully tendered PPP on the basis of an Availability Payment in Hungary and introducing competition in to the sector Introducing new operational, managerial and commercial practices, including the hiring and training of significant number of local employees The project supports the involvement of the private sector in the provision of road transportation introducing new standards of operational and commercial practices 16 February,

21 a a Case Study M5 Phase II Motorway PPP, Hungary Client: EBRD finance: Type of finance: Total Project cost: Year: 2004 Project description: EBRD non-financial contribution: AKA, a consortium set up by Bouygues, Strabag, CDC, Intertoll Management, MOL, and National Motorway Company EUR million Senior Loan EUR million Completion of the M5 motorway from Kiskunfélegyháza to the Hungarian border with Serbia near Szeged, and to consolidate and refinance the existing M5I motorway. Upfront environmental due diligence Active Lender participation on the structuring Impact: Establishing a replicable PPP model based on availability payments in CEE countries Transferring risk to the private sector by replacing traffic risk with performance risk through introduction of an availability payment system The project supports the involvement of the private sector in the provision of public services through public-private partnerships in the infrastructure area. 2 May,

22 a a Case Study M6-M60 Motorway PPP, Hungary Client: EBRD finance: Type of finance: Total Project cost: Year: 2008 Project description: EBRD non-financial contribution: Mecsek Consortium set up by Strabag, Bouygues, Colas, Laing, and Intertoll EUR 75.0 million Senior Loan EUR million Construction, operation and management of 48 km road section of M6 between Szekszárd and Bóly, and 30 km section of M60 between Bóly and Pécs under a 30 year concession agreement Upfront environmental due diligence Active Lender participation Impact: Clear demonstration effect of a successful tendering and subsequent implementation Expanding private provision of capital and services in the Hungarian road sector Contributing to the greater efficiency and competition The project supports the involvement of the private sector in the provision of financing for the road sector through public-private partnerships. 2 May,

23 a a Case Study Grandi Stazioni, Czech Republic Client: EBRD finance: Type of finance: Total Project cost: Grandi Stazioni SpA EUR 3.2 million Equity Year: 2004 Project description: EBRD non-financial contribution: EUR 42.1 million (with EUR 29 million financed by a syndicated loan from local banks) Rehabilitation and commercial exploitation of Prague, Main, Marianske Lazne & Karlovy Vary Railway Stations under a 30 year concession agreement Focus on competitiveness and commercialisation Active Lender participation Impact: Introducing private sector involvement in an area previously under the control of the state rail organisation Expanding market interactions by outsourcing property management and facility management services Setting an example for replication of concessions to the sector, or a more commercial operation of railway station real estate assets in the country The project supports the involvement of the private sector in the provision of financing for the modernisation of railway stations through a public-private partnership. 2 May,

24 Contacts For all further enquiries, please contact : Sue Barrett Director, Transport Tel: barretts@ebrd.com EBRD One Exchange Square London EC2A 2JN United Kingdom 16 February,