FINANCING PPP IN INTESA SANPAOLO GROUP

Transcription

1 FINANCING PPP IN INTESA SANPAOLO GROUP Bulgaria Italy Bilateral Cooperation Project Models and Strategies for Public-Private Partnership Rome, 23 rd October 2007

2 Intesa Sanpaolo Group - Overview Intesa Sanpaolo is a new banking group resulting from the merger between Banca Intesa and Sanpaolo IMI. Intesa Sanpaolo is among the top banking groups in the euro zone, with a market capitalisation eceeding 74 billion euro*, and the undisputed leader in Italy, with an average market share of approimately 20% in all business areas (retail, corporate and wealth management). The Group has a selected presence in the countries of Central-Eastern Europe and in the Mediterranean basin, with approimately 7 million customers in 12 countries. Intesa Sanpaolo has the most widespread international network of all Italian banks: with presence in 35 countries. The Group is quoted both on the Milan Stock Echange as well as the New York Stock Echange and is a member of DJ Eurosto 50 and FTSE EUROTOP 100. * As at January 2, 2007

3 Banca Intesa Infrastrutture e Sviluppo & Banca O.P.I. The merger between Sanpaolo IMI and Banca Intesa will also involve the Merger of the two public finance specialized banks of the Group, Banca Intesa Infrastrutture e Sviluppo and Banca OPI. The integration process will lead by the end of the current year to a new entity which represents the first Italian bank for Public Finance and one of the leading operators in Europe, with its 42 bln of assets and 301 mln of operating profit (2006 BIIS and BIIS aggregate figures), able to drive the development of infrastrucure, utilities and all sectors involving central and local governments, also encouraging a closer cooperation between the Public and Private sectors. The new Bank will supply its clients, i.e. Central Governments, Public Entities, Local Authorities, Public Utilities and General Contractors with a wide range of financial products, both traditional and structured (short, medium and long term lending, Project Financing, Securitization, Asset- Liabilities Managment and Financial Advisory).

4 Product Offering ADVISORY ARRANGING FINANCING STRATEGIC & INDUSTRIAL Market entry strategy Regulation and tariff advice Commercial negotiation Price and value analysis FINANCIAL Financial modelling Contractual Structures Funding options Risk sharing and mitigation Review tender documentation Funding strategy Senior debt Leasing Bonds Equity Security Structure Project financing Bond financing Stand alone Acquisition / Bridge financing Bridge to capital market financing Term debt Underwriting debt DEAL CLOSURE Documentation Leading / managing the due diligence process Legal Technical Insurance Modelling Hedging Syndication

5 Clients PUBLIC ADMINISTRATION PUBLIC SECTOR COMPANIES PROJECT COMPANIES CONTRACTORS Our customers are based both in Italy and overseas and include: State Government Departments Central government authorities Regional and Local authorities Social security and insurance entities State and local service-providing entities (research, health, housing, culture, education, etc) Utilities (gas, water, Transport, renewables) Companies in which the State is a majority and/or controlling shareholder Companies controlled by Regional or Local authorities Public and Private concessionaires of public services Special purpose vehicles Public-Private Partnerships Consortia of concession bidders Private Sector Contractors Construction Companies

6 Public Private Partnership v. Project Finance Public Private Partnership (PPP) is a Technique which allows to build up a co-operation between the public and the private sector under several contractual schemes in order to build public works Project Finance (PF) is one of PPP applicative instruments.

7 The PPP market in Italy in 2006 (1/3) Sectors Projects (N.) Total investment costs ( /mln) Average Investment costs ( /mln) Public spaces/ Green areas ,0 0,9 Utilities & telecommunications ,6 27,7 Sport Centres ,2 4,0 Parkings ,3 5,1 Cemeteries ,3 4,3 Urban riqualification ,8 9,6 Turistic Harbours ,3 22,3 Hospitals ,9 23,6 Transports ,7 648,5 Waste management ,3 12,6 Source: Osservatorio Nazionale Project Financing

8 The PPP market in Italy in 2006 (2/3) Type of bid Projects (N.) Total investment costs ( /mln) Selection of proposals ,2 Concession of Build&Operate under private initiative ,9 Concession of Build&Operate under public initiative ,7 Concession of services ,9 Other types of bids ,4 Total ,1 Source: Osservatorio Nazionale Project Financing

9 The PPP market in Italy in 2006 (3/3) Split on the basis of the total amount of investment costs Projects (N.) Total investment costs ( /mln) Average Investment costs ( /mln) Amount not known up to ,5 0,4 from to ,2 1,7 from to ,0 3,8 from to ,5 7,3 from to ,0 20,4 Over ,9 458,4 Total ,1 Source: Osservatorio Nazionale Project Financing

10 Structure Project Financing General Structure Banks Securities Shareholders (sponsor) Insurance Interest and capital Credit Agreement Dividends Shareholder Funding Agreement Insurances Operator O&M Agreement perfomance Project Company Goods, services Royalty rents Concession Agreement Grantor Contractor EPC Contract Market appalto di servizio o convenzione Final Users Municipalities

11 Main contracts in a Project Financing ( Project Documents ) Concession Agreement Construction Contract O&M Agreement Facility Agreement Equity Contribution Agreement Security Agreements Accounts Agreement Intercreditor Agreement

12 III.3 Financing PPP in Intesa Sanpaolo Group Risk Allocation Matri Operator Constructor SPV Banks Grantor Insurer Change in Law Construction Risk Commercial Risk Technological Risk Authorisation Risk Financial Risk Country Risk

13 The Concession Agreement: main clauses in the view of the bankability Banks Step-in right in the Project Documents in case of Concessionaire Default. Indemnities in case of Resolution of the Concession Contract for Grantor Default or Revocation for public interest (Termination Payment). Economic and Financial Re-equilibrium procedure. The grantor can grant a Concession lasting more than 30 years,

14 DUC Bologna s.p.a. New Building of Municipality of Bologna (Italy) DUC Bologna spa Project financing Mandated Lead Arranger Year 2004 Rationale New building for the Municipality, without increasing its own debt. Project financing for the funding of the Design, Build, Operate and Transfer of the New Building of the Municipality of Bologna under a PPP scheme with a 30 years Concession Agreement. Borrower: DUC Bologna spa (the Concessionaire ), a special vehicle company (or the Project Company ) established for the purpose of implementing the project by the winners of the bidding process. Total innvestment cost 98 mln, of which about 68 mln are construction costs. The Cocessionaire will enter into a Construction Agreement with a Contractor on a lump sum, fied price basis. The Concessionaire enter into an Operating Agreement with the Operator for the facility management services. The Municipality of Bologna will pay a rent to the Concessionaire for the all life of the Concession allowing the Concessionaire to repay the debt and to payout dividends to the project company s shareholders.

15 DUC Bologna s.p.a. New Building of Municipality of Bologna (Italy) Project Structure Contractor Sponsors/ Equity holders Facility Service providers Equity Construction contract Facility Management Agreement DUC Bologna (SPV) Design Agreement Lease Agreement Commercial areas Designers Yearly Rent Public Grant Loan Agreement Leasees Lenders Insurance CONCESSION AGREEMENT Licences and Permits Insurance Company MUNICIPALITY OF BOLOGNA Public Authority

16 Frullo Energia e Ambiente Srl - Waste to Energy Project in Granarolo dell Emilia (Bo) Frullo Energia e Ambiente Srl Project financing Rationale June 2002 More funds available for investment. Better value for money. Accelerate the delivery of projects. The Project consists in design, construction and operation of the new waste-to-energy plant with a capacity of 22 Mwe located in Province of Bologna and moreover, until the new plant will go in operation, the eisting old plant handling. Now eisting plant, made up in 1973, has a capacity of solid waste treatment of 380 t/day. So New Plant will be able to reach the originally capacity of the older plant (600 t/day) with a total annual capacity of solid waste treatment of 180,000 t/y but with more production of energy. New Plant will produce gross electricity generation for kwh/y and kcal/y of heat. Use of private sector epertise.

17 Frullo Energia e Ambiente Srl - Waste to Energy Project in Granarolo dell Emilia (Bo) Project Structure Shareholders: Saebo S.p.A. 51% Actelios S.p.A 49% Guarantees USW Suppliers Saebo S.p.A. USW supply Tarif ( /ton) Shareholders Undertaking Lenders (Project Financing) Facility Agreement USW Suppliers Hospital HW supply Tarif ( /ton) Frullo Energia e Ambiente S.r.l. Heat Purchase Agreement Power Purchase Agreement Insurance Company Insurance Agreement Energy produced CIP6/92 tariff ( Kwh) Energy off taker (GRTN S.p.A.) Contractor Works supply & guarantees Performance & guarantees Heat produced Tariff ( kcal) Heat off taker (Seabo S.p.A.) Construction Contract O&M Agreement Seabo S.p.A & Protecma S.p.A. (Maintenance) Seabo S.p.A & Actelios S.p.A. (Operation)