2nd europe-iran forum presentations

Forum Presentations!

Thursday, SEPTEMBER 24, 2015

12:25pm – 12:30pm: Chairs’ welcoming remarks Ø  John Andrews, Consultant Editor, The Economist

Ø  Martin Arnold, Banking Editor, Financial Times

Ø  Zoe Schneeweiss, Swiss Economy Editor, Bloomberg News

12:30pm -12:55pm: Opening Keynote: Economic Development and International Relations, The Case of Iran

Ø  Ambassador Livia Leu, Head of Bilateral Trade, SECO, EAER

Ø  Ambassador Giulio Haas, Swiss Ambassador to Iran, FDFA

12:55pm - 1:55pm: Iran as a “BRIC in Waiting“: Devising an Emerging Market Strategy Ø  Giovanni Castellaneta, Chairman, SACE

Ø  Pirouzan Parvine, Partner, Dentons Europe

Ø  Charles Hollis, Managing Director, FTI Consulting

Ø  Barthelémy Helg, Partner, ACL

5 | Corporate Presentation

Amb. Giovanni Castellaneta, President of SACE Geneva, 24 September 2015


We support Italian companies competitiveness wordwide

SACE | Italy export credit company

SACE offers so lut ions for the management of commercial and political risks by means of:

ü  Export credit and project finance ü  Protection of foreign investments ü  Financial guarantees ü  Credit insurance ü  Surety and construction risks ü  Factoring ü  Advisory and training services

SACE has € 5.3 billion shareholders’ equity and A- credit rating affirmed by Fitch

ü  Assisting over 25,000 SMEs and large corporations in 189 countries, with a total exposure of € 74.3 billion

ü  Middle East and North Africa is no. 2 area in SACE portfolio

ü  SACE recently created a desk for the Middle East and North Africa


Iran-Italy | A long lasting peer-to-peer collaboration

ü  Refineries of Shiraz, Tabriz and Arak (Saipem)

ü  EsfahanSteel Plant (Danieli)

ü  Electric Plants (Ansaldo)

ü  Italian Embassy in Tehran has always remained open through the years

ü  Port of Bandar Abbas (Trevi)

ü  Gasduct IGAT II Khangan-Esfaham (Saipem)


Export potential to catch

Italy-Iran | Not a gold rush #recovering lost time

How to get there ü  Italian exports to Iran could realize a € 3

billion increase by 2018

ü  In a market about to become highly c o m p e t i t i v e , r i s k s c a n n o t b e underestimated and finance/payment channel has to be restored

ü  Italian Ministry of Economic Development, SACE and Mediobanca signed a MoU with the Iranian Ministry of Economy and Finance and the Central Bank of Iran to support projects of mutual interest implying Italian export and investments

ü  28-30 November 2015, new mission promoted by the Italian Ministry of Economic Development for the Bilateral Economic Forum attended by the representatives of Iran and Italy’s main institutions


Iran-Italy | Areas of opportunities #recovering lost time

Transports ü  Up to 2 million new

vehicles/year ü  14 million old vehicles to

be replaced ü  The same needs apply to

trains, railways and aircrafts

Human capital ü  77 million inhabitants,

100 million by 2050 ü  50% under 30 ü  Vibrant urban middle-

class, with a widespread number of professionals and skilled workers

Oil&gas ü  Ready to become a major

player? ü  Gas: 15% of world natural

gas reserves, make Iran a global leader after Russia

ü  Oil: 60% of Iranian wells are over 60 years old; existing fields have crude recovery rates of 20-30pc

Deal making in Iran: what is ahead of us ?

September, 2015

Pirouzan Parvine Iran Desk Leader, Dentons Europe LLP

Lessons from other markets in transition and recent deals in Iran •  We can draw on our experience in Central Europe, Russia and CIS to

understand and foresee the steps required to successfully resume deal making in Iran

•  Iran has many strengths Russia and Central Europe did not have back in the 90s and these strengths will help accelerate the transition of the Iranian market and its convergence with BRICS and G20 Countries

•  Deal making in a country in transition is a first encounter between business people with very different concepts and habits, and as such a challenge

•  Dentons Europe can draw on successful deal making in areas not under sanction to share experience and tips for all the deals ahead of us

12

Opening the dialog

13

•  Foreign side of the negotiating table: •  Do not presume the other side is on the same page as regards the

way your business is run – why is that crucial ? •  Provide specifics of the business model •  Provide specifics of the organization and management tools used to

run the business

•  Iranian side of the negotiating table: •  Similarly, take the time to walk the foreign side through how that

business is run in Iran •  Explain the state of the given business in Iran: difficulties if any,

parties involved, etc. •  Clarify your expectations and ambitions upfront

•  Specific – usual - gaps worth spending time on: •  How do you count ? •  How do you account ? •  How do you (financially) report – exercise finance control •  How do you report taxes…

Preparing a focused transaction

14

•  Letter of Intent or Term Sheet ? •  Term Sheet content:

•  Insist on details, but: •  mind to give “time to time” on power balance related subjects

•  Transactional documentation drafting •  Foreign side: learning curve time - the architecture of the documents

will likely be new •  Foreign side: suggest advisors on the other side to help navigate

deal specific provisions •  Both sides: as there is still very little benchmark, fear to make a

mistake and uncertainties over how the implementation of the agreement will work: use “reasonableness standards” and in a limited number of cases, written agreement exceptions to the provisions of the agreement

Thank you

Iran – Devising an Emerging Market Strategy

Charles Hollis, FTI Consulting

24 September 2015

Gently does it…

!  Sanctions still in place pending a number of hurdles ■  “Implementation Day” allowing lifting of most sanctions likely to be

Q2 2016 ■  Some rump sanctions will continue to remain for eight years until

“Transition Day” !  US likely to maintain significant restrictions in place for US entities,

only rolling back “secondary sanctions” ■  Sanctions on terrorism will remain ■ OFAC likely to prohibit using US financial system for trading with

Iran ■ Major international banks likely to be highly cautious

17

Managing the key risks

!  Sanctions have not gone. Understand what is legally possible !  Political uncertainty ■  Iran remains a highly volatile and fragmented polity ■  Some factions retain a deep suspicion of external influence !  Counterparty risk ■  Sanctions likely to remain on designated entities, especially linked

to the IRGC ■  Intermediaries may exaggerate their ability to deliver ■ Know who you are dealing with – do your due diligence !  Corruption ■  A priority for Rouhani – “a national security threat” ■ But still ranked 136/175 in Transparency International’s 2014

Corruption Perception Index

18

Have a plan

!  Know the market ■ What sectors are attractive/feasible? ■ Outdated business infrastructure and culture !  Be realistic about what Iran needs ■  Come with financial solutions, absent the top tier banks ■  Partnerships, not transactional relationships !  Communications strategy ■  Towards potential Iranian partners ■  Towards existing stakeholders !  Despite remaining obstacles, clear opportunity for international

business.

19

Critical Thinking at the Critical Time ™

Charles Hollis T: +44 20 3727 1252 M: +44 7545 300034 E: [email protected]

IBRIC Unlocking the Money Flow A Key to Devising an EM Strategy

September 2015

21

Unlocking the Money Flow Rule of engagement Nr. 1: no USD transactions – no U.S. persons

22

The United States will only waive (suspend) so-called secondary sanctions U.S. persons and U.S.-owned or -controlled foreign entities will continue to be generally prohibited from conducting transactions with Iran, unless licensed to do so by OFAC

Unlocking the Money Flow More questions than answers?

23

Non-U.S. Entity

Non-U.S. Bank

Iranian Bank

Iranian Entity

Will banks accept

payment even if the trade is

not sanctioned?

Since no bank will be able to clear

Iranian transactions in

USD, how will that impact trade?

What level of due diligence will banks

expect on the contracting Iranian

entities and the underlying

transactions?

What clarity will non-U.S. banks

expect from the U.S. and other regulators before they facilitate

banking for Iran related business?

What are the prerequitites for

reconnecting Iran’s domestic and

overseas banking systems to the non-

U.S. financial services system?

Should there be agreed « green channels » or a « white list »?

US Regulators Other Regulators CBI

Source: JCPOA, PWC

Unlocking the Money Flow Banks as enforcers of global political objectives

24

Non-U.S. Bank

Will banks accept

payment even if the trade is

not sanctioned?

Since no bank will be able to clear

Iranian transactions in

USD, how will that impact trade?

What clarity will non-U.S. banks

expect from the U.S. and other regulators before they facilitate

banking for Iran related business?

Should there be agreed « green channels » or a « white list »?

US Regulators Other Regulators

•  Banking industry’s de-risking agenda

•  Post transaction heavy fine risk

•  Compliance with US sanctions

•  U-turn USD transactions will continue to be sanctioned – Increased scrutiny will be required on indirect flow from non-U.S. counterparts

•  Need to establish Iran-dedicated front, middle, and back offices to ensure full compliance

•  EUR may become currency of choice

•  Reactivation of SWIFT •  Clear practical advice on Iran

related transactions for non-US banks

•  Clarity on scope of any license for non-US subsidiaries of US banks

•  Clarity on « snap-back » provisions

•  Threshold based twin-track approach may be necessary

•  Without green channel or a white list, transactions will be tested at the time of settlement

•  Foreign-based subsidiaries of Iranian banks may assist

Unlocking the Money Flow A significant challenge

25

Iranian Bank





Other Regulators CBI •  Move from a domestic, stand-alone and « managed » banking landscape to an open international market

•  Transform processes/controls/infrastructure to meet today’s banking standards

•  Heavy government involvement (state-owned banks, specialized government banks, privatebanks with heavy state influence)

•  Deficiencies in anti-money laundering and combating financing of terrorism (AML/CFT)

•  Lack of suspicious transaction reporting (STR)

•  Lack of proper recordkeeping

•  USD 32 Billion in reported NPLs, or approx. 15% •  USD 70 billions in NPLs if maturity extension included,

or approx. 30% •  Own sort of Iranian islamic banking, divergent from

AAOIFI standards, which may add complexity in dealing with Gulf banks

Source: IMF, Novin Investment Bank, Financial Action Task Force

•  Dual exchange rate conundrum

•  Control of exchange houses

Unlocking the Money Flow The FATF view…

26

High risk and non-cooperative jurisdictions

Source: Financial Action Task Force

Unlocking the Money Flow A significant challenge

27

Iranian Bank





Other Regulators CBI •  Move from a domestic, stand-alone and « managed » banking landscape to an open international market

•  Transform processes/controls/infrastructure to meet today’s banking standards

•  Heavy government involvement (state-owned banks, specialized government banks, private banks with heavy state influence)

•  Deficiencies in anti-money laundering and combating financing of terrorism (AML/CFT)

•  Lack of suspicious transaction reporting (STR)

•  Lack of proper recordkeeping

•  USD 32 Billion in reported NPLs, or approx. 15% •  USD 70 billions in NPLs if maturity extension included,

or approx. 30% •  Own sort of Iranian islamic banking, divergent from

AAOIFI standards, which may add complexity in dealing with Gulf banks

Source: IMF, Novin Investment Bank, Financial Action Task Force

•  Dual exchange rate conundrum

•  Control of exchange houses

Unlocking the Money Flow Full transparency required

28

Non-U.S. Bank

Iranian Bank

Iranian Entity

What level of due diligence will banks

expect on the contracting Iranian

entities and the underlying

transactions?

Other Regulators CBI

•  Enhanced KYC standards

•  Stringent PEP policies

•  Lack of transparency of ownership structure of Iranian entities

•  High government involvement in the economy

•  Increased AML/CFT and corruption risks

•  Need to understand full economics of each transaction

•  Same principle apply to individuals •  Many Iranians carry multiple passports •  Many Iranians have one or more residencies of

convenience •  Many Iranians must be considered as PEPs

Knowledge. Access. Performance. ACL Asset Management. Iran.

29

2:20pm- 2:40pm: Business Diplomacy and the Role of Enterprise in Multitrack Efforts Ø  Sandra Djuvara Melone, Executive VP, Search for Common Ground

Ø  Danny Whitehead, Country Director Iran, British Council

2ND EUROPE-IRAN FORUM

Business Diplomacy and the Role of Enterprise in Mul8-‐track Efforts

Sandra Djuvara Melone Execu've Vice President

Search for Common Ground

Grand Hotel Kempinski, Geneva, Switzerland September 23, 2015

31

Our Mission is to…

Transform the way the world deals with conflict,

away from adversarial approaches

towards coopera8ve solu8ons.

33

OUR VALUES

Ø  Impar8al advocates of a process – not of a party. Ø  We tackle issues – not each other. Ø  We engage long-‐term to help transform even the

most seemingly intractable conflicts.

35

HOW WE ENGAGE Collabora8on = from “me” to “we”

v  Across dividing lines v  Engage mul8ple stakeholders

v  Top-‐down and boUom-‐up

v  Inter-‐personal and across socie8es

Conflict is an opportunity for CHANGE

37

THE CHANGE WE SEEK ü  Raising Knowledge ü  Building skills

ü  ShiWing aXtudes

ü  Transforming rela8onships

ü  Enabling collabora8on

ü  Keeping hope alive

Rela8onships

Structures

Individual Agency

38

Lay the groundwork for Americans and Iranians to

establish the long term contacts necessary for the

two countries to begin improving their rela;ons

based on their commonali;es and

collabora;ons.

v Since 1996 v Lack of Diploma8c Rela8ons

v Misunderstandings v Commonali8es & Shared Interests

v Diverse programming: engage with foreign policy officials, lawmakers, clerics, scien8sts, ar8sts, and members of the media…

40

v  Discreet Track II mee8ngs v  Ci8zen-‐to-‐Ci8zen Exchange v Wrestling Diplomacy v  Film Fes8vals

41

Iranian and American religious leaders and scholars meet on a

regular basis

43

v Back-‐channel processed on key security issues, including nuclear Issue: Nuclear Ini8a8ve Group, formed in 2005

v Proposal on conver8ng Arak Heavy Water Reactor

44

Next big steps: Joint work on…

Narco8cs issues

46

In sum…

For business, for poli8cs, for security…

It’s all about human beings, and

engaging in respeciul, caring, long-‐term rela8onships.

48

www.sfcg.org

To learn more about Search’s Track II work,

including how you can support it Contact: Katherine Boyce

Program Manager [email protected]

49

50

… or why culture matters, and what the private sector can do

Culture and ‘business diplomacy’

In Europe – Iran relations

Danny Whitehead, Country Director Iran

52

Cultural rela8ons build trust

53

• Trust è trade • Participation in cultural activities è propensity to trade

• Levels of interest in international business are significantly higher in people with language skills

• Perceptions around opportunities for international business are closely related to perceptions about society and cultural assets

• Arts, education, languages

54

[email protected] [email protected]

2:40pm - 3:40pm: Iran and Banking Best Practices: A Status Report and Development Agenda Ø  Tim Fox, Head of Research and Chief Economist, Emirates NBD

Ø  Parviz Aghili, CEO, Middle East Bank

Ø  Mostafa Beheshti Rouy, Director of International Affairs, Pasargad Bank

Ø  Younes Mazlumi, CEO, Razi Insurance

2nd Europe-‐Iran Forum

Tim Fox Chief Economist

56

September 2015

Emirates NBD Research

The Regions Banking Environment

57 Source: Bloomberg, Emirates NBD Research

Iranian Real GDP Growth


-12

-10

-8

-6

-4

-2

0

2

4

6

8

10

Q107 Q108 Q109 Q110 Q111 Q112 Q113 Q114 Q115

% y

/y

Chinese Imports of Iron Ore from Iran


-80

-60

-40

-20

0

20

40

60

80

100

120

Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15

% y

/y (3

mm

avg)

Iranian GDP by Industry

60

0

5

10

15

20

25

30

35

40

45

Agr

icul

ture

+

Man

uf.

Min

ing

Ser

vice

s

T,S

,C

Oth

er

% o

f tot

al

Iranian Rial and infla'on


0

5000

10000

15000

20000

25000

30000

35000

40000

0

5

10

15

20

25

30

35

40

45

50

Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15

Inflation, % y/y (LHS) Iranian Rial

Iranian Real Credit Growth (infla'on adjusted)


-50

-40

-30

-20

-10

0

10

20

30

40

50

Feb-11 Jun-11 Oct-11 Feb-12 Jun-12 Oct-12 Feb-13 Jun-13 Oct-13 Feb-14 Jun-14 Oct-14 Feb-15

Public Sector Private Sector

% y

/y

Iranian Financial Soundness Indicators & Asset Quality

63 Source: Moody’s, IMF, Bloomberg, Emirates NBD Research

0

5

10

15

20

25

30

35

40

45

Capital Adequacy Ratio NPLs to Gross Loans Provisioning Coverage (% of NPLs) Return on Assets

2010/11 2011/12

2012/13 2013/14

Disclaimer The material in this presenta'on is general background informa'on about Emirates NBD's ac'vi'es current at the date of the presenta'on. It is informa'on given in summary form and does not purport to be complete. It is not intended to be relied upon as advice to investors or poten'al investors and does not take in to account the investment objec'ves, financial situa'on or needs of any par'cular investor. These should be considered, with or without professional advice when deciding if an investment is appropriate. The informa'on contained here in has been prepared by Emirates NBD. Some of the informa'on relied on by Emirates NBD is obtained from sources believed to be reliable but does not guarantee its accuracy or completeness.

Forward Looking Statements It is possible that this presenta'on could or may contain forward-‐looking statements that are based on current expecta'ons or beliefs, as well as assump'ons about future events. These forward-‐looking statements can be iden'fied by the fact that they do not relate only to historical or current facts. Forward-‐looking statements oaen use words such as an'cipate, target, expect, es'mate, intend, plan, goal, believe, will, may, should, would, could or other words of similar meaning. Undue reliance should not be placed on any such statements because, by their very nature, they are subject to known and unknown risks and uncertain'es and can be affected by other factors that could cause actual results, and the Group’s plans and objec'ves, to differ materially from those expressed or implied in the forward-‐looking statements. There are several factors which could cause actual results to differ materially from those expressed or implied in forward looking statements. Among the factors that could cause actual results to differ materially from those described in the forward-‐looking statements are changes in the global, poli'cal, economic, business, compe''ve, market and regulatory forces, future exchange and interest rates, changes in tax rates and future business combina'ons or disposi'ons. Emirates NBD undertakes no obliga'on to revise or update any forward looking statement contained within this presenta'on, regardless of whether those statements are affected as a result of new informa'on, future events or otherwise.

Important Informa8on

64

Parviz Aghili, Chief Executive Officer, Middle East Bank 1- FATF (Financial Action Task Force)

1.1) Anti-Money Laundering Lawis passed. 1.2) Section on Financing of Terrorism needs approval of the Council

of Guardians. 2- FATCA (Foreign Account Tax Compliance Act)

2.1) The Central Bank to issue a circular advising the banks to implement it. 3- Corporate Governance: Latest CBI Directives on Governance has greatly improved. Having Independent Directors on the boards of banks is compulsory now; Rights of small shareholders are protected; dealing with Related Persons are restricted, etc.

4- Basel Accords: Most banks have implemented Basel I. We, at MEB, have taken as tab at Basel III for the first time in Iran. If you wish please check our site: www.middleeastbank.ir 5- Internal Audit, Risk Management, Compliance: In the order presented, are, one at-a-time, being implemented by most banks. MEB has established all three departments and is judiciously building three teams of experts to fully understand and appreciate what they are doing, and each function to become an integral part of the business of our bank. 6- Iran is a Bank-Based (or Bank-Dominated)Economy. The Main Source of Debt-Financing (in Iran)is the Banking System! So if the Central Bank Decides to adopt a disciplinary or tight monetary policy, liquidity dries up and we would be faced with the situation as we are in today; ie., recession. Under this situation, sooner or later, CBI under pressure, will loosen up, and we will end up with rising inflation rate again.

7- We need to turn to the debt market as many countries around the world have turned to. There are many experts who wonder since the banking system is out of liquidity, where are we going to get the liquidity to purchase these bonds. So long as we allow the market-forces to determine the rate of interest, there will be funds available to purchase these instruments. Statistics support this hypothesis. M2 as a percentage of GDP in Iran vs. many Other countries around the world. In order for the Private Sector to have access to this market (avoiding crowding-out-effect), we have to limit government’s entry into this market! 8- As potential Iranian corporate borrowers in the private sector are spoiled with subsidized-low interest rates from banks, we have to consider some sort of tax-credit on interest expense of these bonds for two to three years until CBI’s controlled monetary policy brings down the rate of interest; hence, interest expense of these bonds. 9- Sharia Compliant Banking. Participatory Contracts vs. Transactional Contracts. We in “Shi’a Islam” have developed a set of contracts between the borrowers and lenders, based on the Statute of Transaction (called Bai); whereby we could do conventional banking totally Sharia Compliant. So Islamic banking in Iran is not something to be concerned about. 10- Related Matters: A Proper Bankruptcy Law which includes “Liquidation” as well as” Restructuring”.

Mostafa Beheshti Rouy

Banking Industry & Capital Markets

in Iran

Europe Iran Forum 2

Address: No. 430 Mirdamad Blvd., Tehran, Iran Website: www.bankpasargad.com

Bank Pasargad The Millennium Bank

September 24, 2015

69 BANK PASARGAD

The Millennium Bank

Country 2014 GDP

(USD Billion)

GDP Growth

Rate YoY

Interest Rate Inflation Rate Unemploy-

ment Rate

Debt/GDP Ratio Stock Exchange

2015 Market Cap (USD

Billion)

Market Cap/GDP Ratio

World 91,183 - - - - - - 66,589 73%

1 United States 17,419 2.70% 0.25% 0.20% 5.30% 102.98% NYSE 19,352 111%

2 China 10,360 7.00% 4.60% 1.60% 4.04% 41.06% Shanghai SE 4,839 47%

3 Japan 4,601 0.70% 0.00% 0.20% 3.30% 230.00% Japan Exchange Group - Tokyo 4,985 108%

4 Euronext

Netherlands

4,462

1.60% 0.05% 1.00% 6.80% 68.80%

Euronext 3,321 74% Belgium 1.30% 0.05% 0.91% 8.60% 106.50%

Portugal 1.50% 0.05% 0.80% 11.90% 130.20%

France 1.00% 0.05% 0.20% 10.30% 95.00%

5 Germany 3,853 1.60% 0.05% 0.20% 4.70% 74.70% Deutsche Börse 1,781 46%

6 United Kingdom 2,942 2.60% 0.50% 0.10% 5.60% 89.40% London Stock Exchange 6,187 210%

7 Brazil 2,346 -2.60% 14.25% 9.56% 7.50% 58.91% BM&FBOVESPA 685 29%

8 Italy 2,144 0.50% 0.05% 0.20% 12.70% 132.10% Borsa Italiana 686 32%

9 India 2,067 7.50% 7.25% 3.78% 4.90% 65.50% BSE India 1,640 79%

10 Russia 1,861 -4.60% 11.00% 15.60% 5.30% 17.92% Moscow Exchange 466 25%

11 Canada 1,787 2.06% 0.50% 1.30% 6.80% 86.51% TMX Group 1,856 104%

12 Australia 1,454 2.30% 2.00% 1.50% 6.30% 28.60% Australian SE 1,229 85%

13 South Korea 1,410 2.20% 1.50% 0.70% 3.70% 33.80% Korea Exchange 1,256 89%

14 Spain 1,404 3.10% 0.05% -0.40% 22.37% 97.70% BME Spanish Exchanges 950 68%

15 Mexico 1,283 2.20% 3.00% 2.74% 4.72% 30.70% Mexican Exchange 453 35%

17 Turkey 800 2.30% 7.50% 6.81% 9.30% 33.00% Borsa Istanbul 174 22%

18 Saudi Arabia 746 2.40% 2.00% 2.20% 5.70% 1.60% Saudi Stock Exchange - Tadawul 540 72%

19 Switzerland 685 1.20% -0.75% -1.30% 3.10% 34.20% SIX Swiss Exchange 1,625 237%

20 Sweden 571 3.00% -0.35% -0.10% 6.50% 43.90% NASDAQ OMX Nordic Exchange 1,266 222%

21 Nigeria 569 2.35% 13.00% 9.20% 7.50% 10.50% Nigerian Stock Exchange 52 9%

23 Argentina 540 1.10% 17.93% 14.80% 6.60% 43.00% Buenos Aires SE 66 12%

25 Norway 500 2.20% 1.00% 1.80% 4.50% 26.40% Oslo Børs 221 44%

26 Taiwan 489 0.52% 1.88% -0.66% 3.74% 36.50% Taiwan SE Corp. 812 166%

27 Austria 436 0.40% 0.05% 1.20% 8.10% 84.50% Wiener Börse 100 23%

28 Iran 415 0.60% 21.00% 16.20% 10.80% 10.63% Tehran Stock Exchange 109 26%

29 United Arab Emirates 402 4.30% 1.00% 4.40% 4.20% 16.70% Abu Dhabi SE 229 57%

30 Colombia 378 2.80% 4.50% 4.46% 8.20% 38.00% Bolsa de Valores de Colombia 109 29%

31 Thailand 374 2.80% 1.50% -1.05% 0.83% 45.70% The Stock Exchange of Thailand 396 106%

32 South Africa 350 1.20% 6.00% 5.00% 25.00% 39.00% Johannesburg SE 905 258%

70 BANK PASARGAD

The Millennium Bank

Banking Industry in Iran

q  Today, the Iranian banking industry consists of:

v  Central Bank of Iran v  Commercial Government Owned Banks (3) v  Specialized Government Banks (5) v Privatized National Banks (4) v  Originally Established Private Banks (16) v  Gharzolhasaneh Banks (2) v  Investment Banks (5) v  Credit Institutions v  Non-Banking Financial Institutions v  Foreign Banks v  Bi-National Banks

71 BANK PASARGAD

The Millennium Bank

Private Banks q  Presently, there are 20 private banks licensed by CBI (presented in chronological order): Originally Established as Private Banks National Privatized Banks

v  Eghtesad Novin (EN) Bank Bank Saderat Iran v  Parsian Bank Bank Mellat v  Karafarin Bank Bank Tejarat v  Saman Bank Bank Refah v  Bank Pasargad v  Sarmayeh Bank v  Sina Bank v  Shahr Bank v  Day Bank v  Ansar Bank v Ayandeh Bank v  Hekmat Iranian Bank v  Gardeshgari Bank v  Khavarmianeh (Middle East) Bank v  Ghavamin Bank v  Iran Zamin Bank

72

Recent Achievements v  Bank Pasargad was established in September 2005 under License No. H/2849 granted by Central Bank of Iran. v  Bank Pasargad is a fully private bank with more than 1,5 million direct and indirect shareholders and is listed on the Tehran Stock Exchange.

v  Bank Pasargad is Iran’s largest private bank in terms of paid-up capital.

v  With 327 branches nationwide, Bank Pasargad provides more than 4,5 million clients with a wide-range of banking services in both local and foreign currencies in compliance with international laws and regulations.

v  Named as Best Bank in Iran “Bank of Excellence” for Year 2014 by Euromoney Magazine. v  Due to its elevated standards for customer service and commitment to innovation in all financial and banking sectors, Bank Pasargad was awarded by The Banker’s Magazine as Bank of the Year in Iran for years 2010, 2012, 2013 and 2014.

v  Bank Pasargad was awarded as Islamic Bank of the Year in Iran for three consecutive years 2013, 2014 and 2015 by The Banker.

73 BANK PASARGAD

The Millennium Bank

Recent Achievements v  With assets estimated above USD 24 billion, Bank Pasargad has been ranked as the 233rd top

bank in the world by this well known international publication.

v  Bank Pasargad has been ranked as the world’s 328th top brand amongst banks.

v  10th largest company on TSE based on Market Capitalization and second among banks (as at 1 June 2015).

v  Winner of European Foundation for Quality Management (EFQM) silver trophy in 12th organizational excellence forum in 2014

v  Winner of MAKE (Most Admired Knowledge Enterprise) Award in Iran for 3 consecutive years

v  Winner of Iran’s Green Bank Award in 2012

v  Member of the Asian Bankers Association's Board of Directors

v  Highest Capital Adequacy Ratio (CAR) among 31 Iranian banks

v  Lowest NPL ratio among all Iranian banks

74 BANK PASARGAD

The Millennium Bank

Amounts in Billion IRR Banks Listed on the Tehran Stock Exchange

Name Pasargad Parsian Eghtesad Novin Kar Afarin Mellat Saderat Tejarat Middle East Post Bank Ansar Sina

Balance Sheet Date 20/3/15 20/3/15 20/3/15 20/3/15 20/3/15 20/3/15 20/3/15 20/3/15 20/3/15 20/3/15 20/3/15

Capital 42,000 15,840 11,312 8,500 40,000 57,800 45,700 4,000 3,233 8,000 10,000

Number of Branches 327 294 282 101 1,606 2,610 1,811 11 406 677 255

Total Deposit 348,674 413,600 292,355 82,593 933,431 814,078 707,271 23,346 36,353 168,342 126,491

Credit Facilities Granted 275,119 325,768 247,115 69,313 931,755 540,774 490,711 20,700 28,659 146,034 84,702

Avg. Deposit Per Branch 1,066 1,407 1,037 818 581 312 391 2,122 90 249 496

Avg. Credit Granted Per Branch 841 1,108 876 686 580 207 271 1,882 71 216 332

Credit Facility to Total Deposit 79% 79% 85% 84% 100% 66% 69% 89% 79% 87% 67%

Credit Facilities to Total Asset 61.9% 59% 72.6% 61.8% 64.3% 49.2% 51.9% 67.4% 63.0% 70.1% 56.8%

Total Share Holders Equity 67,528 27,789 18,937 14,886 76,124 95,099 61,405 5,081 2,169 12,745 13,964

Total Asset 444,244 552,224 340,410 112,073 1,449,984 1,098,471 945,893 30,691 45,483 208,451 149,000

Non Performing Loan (NPL) 9,468 128,941 29,457 6,913 52,840 77,340 61,576 332 4,400 4,785 5,362

NPL to Facilities Granted Ratio 3.4% 40% 11.9% 10.0% 5.7% 14.3% 12.5% 1.6% 15.4% 3.3% 6.3%

Provisions on NPL 10,742 21,205 10,353 2,608 65,142 50,256 31,858 347 1,213 3,708 2,793

Net Profit 12,643 975 3,677 3,702 18,303 7,361 5,270 849 -1,293 3,255 2,351

EPS March, 20, 2015 301 62 325 436 458 127 115 212 -400 407 235

Predicted Net Profit, March 20, 2016 14,369 4,852 4,553 4,346 18,989 8,372 8,867 1,210 6 3,908 2,490

Predicted EPS, March 20, 2016 342 306 402 511 475 145 194 302 2 488 249

Capital Adequacy Ratio 19.8% 7.1% 8.2% 17.1% 9.0% 10.3% 6.7% 21.0% 6.6% 8.9% 14.8%

Book Value Per Share 1,608 1,754 1,674 1,751 1,903 1,645 1,344 1,270 671 1,593 1,396

Latest Share Price, August 29 1,607 1,826 1,942 2,830 2,007 884 904 2,297 1,087 2,507 1,332

P/E 4.7 6.0 4.8 5.5 4.2 6.1 4.7 7.6 543.5 5.1 5.3

75 BANK PASARGAD

The Millennium Bank

Amounts in Billion IRR Banks Listed on the OTC (FaraBourse)

Name Mehr Eqtesad Saman Ayandeh Tourism Sarmayeh Iran Zamin Ghavamin Day Hekmat Iranian

Balance Sheet Date 20/3/15 20/3/15 20/3/15 20/12/14 20/3/15 20/3/15 20/3/15 20/3/15 20/3/15

Capital 12,000 8,000 8,000 6,000 4,000 4,000 4,000 5,000 4,000

Number of Branches 734 145 165 51 143 351 763 91 126

Total Deposit 404,392 179,595 216,454 67,524 71,033 51,462 423,357 85,935 14,597

Credit Facilities Granted 277,961 122,395 209,736 14,992 95,650 16,328 376,098 58,924 7,243

Deposit Per Branch 551 1,239 1,312 1,324 497 147 555 944 116

Credit Granted Per Branch 379 844 1,271 294 669 47 493 648 57

Credit Facilities to Total Deposit 69% 68% 97% 22% 135% 32% 89% 69% 50%

Credit Facilities to Total Asset 64.9% 53.7% 58.3% 20.2% 68.6% 21.2% 83.0% 50.3% 35.7%

Share Holders Total Equity 16,676 10,802 7,961 4,110 5,402 4,025 6,277 7,958 4,661

Total Asset 428,211 228,118 359,472 74,320 139,384 77,193 452,987 117,039 20,302

Bad, Overdue & Doubtful debts 6,867 33,270 7,571 674 45,137 1,090 3,486 5,343 327 Provision of Doubtful Debts to Facilities Granted Ratio 2.5% 27.2% 3.6% 4.5% 47.2% 6.7% 0.9% 9.1% 4.5%

Provision of Doubtful Debts 9,701 5,332 4,106 516 4,607 351 16,630 1,885 164

Net Profit 1,592 1,011 -1,119 151 57 -120 927 2,399 399

EPS March, 20, 2015 133 126 -140 25 14 -30 232 480 100

Predicted Net Profit, March 20, 2016 N/A N/A N/A 1,180 N/A 322 N/A 2,592 499

Predicted EPS, March 20, 2016 N/A N/A N/A 197 N/A 80 N/A 518 125

Capital Adequacy Ratio 5.6% 8.3% 3.2% 7.0% 5.3% 7.6% 2.3% 8.0% 29.0%

Book Value Per Share 1,390 1,350 995 685 1,351 1,006 1,569 1,592 1,165

Latest Share Price, August 29 1,155 1,400 1,200 1,519 1,452 2,130 1,000 1,762 1,136

P/E N/A N/A N/A 7.7 N/A 26.5 N/A 3.4 9.1

76 BANK PASARGAD

The Millennium Bank

Bank Pasargad Capital Changes and Profit (Amounts in Billion IRR)

2005 2007 2008 2009 2010 2011 2012 2013 2014 2015

Capital 3,500 5,250 7,000 7,700

23,100

23,100 27,258 30,000 42,000 50,400

Capital Increase

Initial Capital

1,750

1,750

700

15,400

0

4,158

2,742

12,000

8,400

Raising Capital Sources

Cash Cash Cash Cash

Cash

Cash Cash Cash Cash Cash

Profit before Tax 857.4 1,679.7 2,446.1 3,548.2 6,309.4 10,159.8 14,189.1 16,870.3 15,278.2

77

BANK PASARGAD

The Millennium Bank

History of Capital Increase

BANK PASARGAD

The Millennium Bank

Capital Adequacy Ratio (CAR) %

78

Bank Pasargad is a fully private bank listed on the Tehran Stock Exchange

(TSE) with more than 1.5 million direct and indirect shareholders

79

80 BANK PASARGAD

The Millennium Bank

Bank Pasargad

v  Deposits: 17.32%

v  Facilities Granted: 20.38%

Bank Pasargad is a full licensed bank in Iran providing a wide range of banking services in both local and foreign currencies in compliance with international and local laws and regulations. Attention to quality of service, dedication of both management and staff, high banking standards and observation of international principles are few reasons for which Bank Pasargad has achieved significant milestones in its brief history.

Bank Pasargad share of Iranian banking market amongst Originally Established Private Banks (as of 20 March 2015):

v  Letters of Credit: 55.52 %

v  Guarantees: 12%

Pasargad Bank Holding Co. (BHC)

Pars Aryan Company

Financial & Insurance

Sector Companies

ICT Holding Co.

(FANAP )

Pasargad Energy

Development Holding Co.

(PEDC)

Bank Pasargad

Hospital & Hotel Holding

Co. (NASSIM)

Mining & Industrial

Holding Co. (MIDHCO)

Pasargad Real Estate

Development & Construction

Sector Companies

v  Retail Banking v  Investment Banking v  Private Banking v  Corporate Banking v  Wealth & Asset Manage.

v  Insurance v  RE-Insurance v  Leasing Co. v  Brokerage House v  Exchange House

v  Iran’s largest Private ICT Co. v  1.800 Employees v  Networking v  Telecommunications v  Smart City v  Core Banking v  Core Insurance v  Smart Building v  EFT Payment Switch v  Credit/Debit Cards v  Payment Solutions v  ERP v  Modern Banking

v  Oil & Gas v  Power v  Power Plants v  Refineries v  Pipelines

v  7 Hospitals of 1.000 beds

v  Hotels for 7.000 beds

v  7 Universities v  7 Residential

Development Projects

v  4 Steel Plants v  Sirjan & Zarand

Iron Ore Plant v  Mining & Minerals v  Coal Mines v  Copper Pipes

Plant v  Magnesium Plant v  Coke Making Plants v  Ferro Silicon Alloy

Plants v  Trading of minerals v  Engineering Co.

v  Industrial Parks v  Office Buildings v  Residential

Buildings v  Leasing of

Residential Properties

81

Pasargad Financial Group consists of the bank, 4 specialized holding companies

and 68 subsidiaries, active in the fields of:

82 BANK PASARGAD

The Millennium Bank

Future Developments v  Iran is a founding member (among the original 27 countries) of the newly formed

Asian Infrastructure Investment Bank (AIIB), China’s international development bank with primary capital of USD 100 billion.

v  Iran is eyeing full membership of the Shanghai Cooperation Organization (SCO). The

SCO is a Eurasian political, economic and military organization, founded in 2001 in Shanghai by leaders of China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan.

v  Iran’s economy is forecasted to grow by more than 3% annually during the next 3 years.

v  Political and economic stability

v  Comprehensive and advanced law for protection of foreign investment v  All foreign investors can find suitable investments in a diversified portfolio of projects

in different sectors of the economy from Small to Mega Projects.

83 BANK PASARGAD

The Millennium Bank

Future Developments v  There are tremendous opportunities for investment in the Iranian

market:

v  With more than USD 800 billion of projects already defined by the Iranian government for foreign investors;

v  USD 180 billion of projects in the Oil & Gas sector alone; v  In addition to the oil and gas, Iran has the largest and most diversified industries in

the Middle East and North African region; v  In the tourism industry, Iran is ranked as the 10th top country; v  In terms of diversity of Agricultural Products, Iran is ranked 4th globally; v  Iran could become a major supplier of natural gas to the European Union by the end

of the next decade - between 25 to 35 billion cubic meters of gas a year; v  There are also the potential of the SMEs and so much more.

84 BANK PASARGAD

The Millennium Bank

Contact Us

Thank You For Your Attention Mostafa Beheshti Rouy

Board Member

Tel: 00 98 21 8289 1011

E-mail: [email protected]

Amir H. Mehran

Advisor to the CEO & Board

Manager – Foreign Assets &

Investment Management Dept.

Tel: 00 98 21 8289 1036

E-mail: [email protected] www.bankpasargad.com

Insurance Industry: Historical Perspec8ve

•  1910: First ac8vi8es of insurance in Iran

•  1935 : First General Insurance Company of Iran “Iran Insurance Company” licensed and opened

•  1950: First private sector insurance company "Shargh Co."

•  1971: Establishment of “Bimeh Markazi Iran (Central Insurance of Iran)”

•  2002: Deregula8ons for Establishment of Insurance Companies

•  2003: Star8ng of Private Insurance Companies in industry

•  2015: 29 insurance companies and 2 reinsurance companies

Total Premium Volume* Share of world market

2014 Change in % 2014 nominal (in USD)

Premium Volume in millions of USD 2013


0.16 11.48 6689 7458

Life Premium Volume* Share of world market




0.03 11.50 646 721

Non-‐Life Premium Volume* Share of world market




0.32 11.50 6043 6737

* Reference: SIGMA world insurance in 2014:Back to life, Swiss Re

Insurance Industry 2014 Quick View

Insurance Industry

Insurance Penetra8on: Premiums in % of GDP in 2014 Non-‐life Business Life Business Total Business

0.7 0.2 1.9

Macroeconomic Indicators Exchange Rate

Change (%)

Local Currency

Per USD2013

Local Currency

Per USD2014

Infla8on Rate

(%)2013

Infla8on Rate

(%)2014

GDP real change (%) 2013

GDP real change (%)

2014

USD bn 2014

Popula8on (millions) 2014

8.02 24770 26756 34.7 15.2 -‐1.9 2.0 387 78.5

Insurance Sales Network (No.) Employees

Branches Loss

Adjusters

Brokers Life Agents

General Agents

Reinsurance Companies

Insurance Companies

24770 1012 187 501 4126 32942 2 29

Razi Insurance Co.

Razi Insurance Co. Sales Network (No.) Employees

Branches Brokers Life Agents

General Agents

612 47 411 481 964

•  Founded in 2003

•  First private insurance company in Iran aWer Islamic Revolu8on

•  Latest paid up capital USD 66,766,817

•  Ac8ve role in all fields of insurance in industry

•  Achievements in EFQM model, ISO9001, IUI (Interna8onal Union of Inven8ons and

Industrial Innova8ons), Customer Observance, …

•  Total Share of 2.18% of insurance industry in premiums

Total Premium Volume Growth Rate % in no. of Issued Policies 2014

No. of Issued Policies 2013


Growth Rate % of Premium in

2014

Premium Volume in USD 2013

Premium Volume in USD

2014 48.15 1,536,692 2,276,650 96.02 68,550,188 134,371,922

Razi Insurance Co.

Life Premium Volume Growth Rate % in no. of Issued Policies 2014




2014



2014 37.98 9,584 13,224 65.7 2,686,474 4,451,484

Non-‐Life Premium Volume Growth Rate % in no. of Issued Policies 2014




2014



2014 48.22 1,527,108 2,263,426 97.26 65,863,713 129,920,438

Razi Insurance Co.

•  Major Clients: •  CNPC (China Na8onal Petroleum Corp.): South Azadegan Iran Project

•  Municipality of Tehran: Sadr Bridge,Niayesh Tunnel,Hemmat Highway,Chitgar Lake, …

•  Zar Macaroni

•  Pars Oil and Gas Co.

•  Na8onal Iraninan Drilling Co.

•  Alborz Taat Mall

•  Municipality of Isfahan

•  Setareh Tabnak Hashtom Toos: Mashhad Mall& Hotels& Parking Lot

•  Pasargad Oil Co.

•  Tabriz Urban Railway

4:10pm - 5:10pm: The Tehran Stock Exchange: A Dynamic Marketplace

Ø  Hassan Ghalibaf Asl, President and CEO, Tehran Stock Exchange

Ø  Ramin Rabii, CEO, Turquoise Partners

Ø  Reza Soltanzadeh, CEO, Iran Industries Investment Company

Ø  Seyed Ahmad Araghchi, CEO, Tadbir Pardaz IT Group

Tehran Stock Exchange

Emerging Markets Exciting Opportunities

August 2015

Milestones

ü  1967: Inaugura8on (Feb) ü  1970s: Evolu8on -‐ development of share ownership and tax incen8ves regula8ons

ü  1990s: Interna8onaliza8on: WFE, FEAS, … membership

ü  2005-‐2006: Market re-‐structuring: Demutualiza8on

ü  2007: Priva8za8on plan: market growth and diversifica8on

ü  2010: Launching deriva8ves (SSF), on-‐line trading

Tehran Stock Exchange www.tse.ir

Iran’s Capital Market Structure


Financial instruments, Members and Intermediaries

•  Shares and Rights

•  Islamic Par'cipa'on Papers

•  Financial Deriva'ves (Single-‐Stock Futures Contracts)

•  Sukuks

•  ETFs

Under Process and Review: •  Op'on Contracts •  Conver'ble Par'cipa'on Papers


318 Listed Companies 37 industries

8 Investment Banks

7 Registered

104 Brokerage Firms 54 Poreolio management 93 Online trading licenses

13 Registered

140 Mutual Funds 4 ETFs

TSE is a highly diversified exchange

25

13

9 8

7

6

5

3 3 3

18

Chemicals Monetary Base Metals Telecom Holdings Petroleum Metal Ores Motor Vehicles Transport/Storage Pharmaceu'cal Others



18 23

20 24

41

25

10

20

30

40

50

10-ar

11-ar

12-ar

13-ar

14-ar

15-ar Trends

Market Capitaliza8on to GDP (%)

2874 5049 10872 10255 8727

18855 24403

37860

87409

68973 64226

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Aug.2015

Broad Index

Foreign Investment Foreign Investors: Strategic: – can own up to 100% of company shares. – capital repatria8on aWer 2 years. Poriolio (Non-‐strategic): – can own listed companies 10% individually and 20% totally – capital repatria8on unbounded.


Future Outlook

•  Diversified Pool of Products •  More Efficient Pre/Post-‐Trade System

•  Closer Linkages with Regional Exchanges

•  Improving Corporate Governance Standards

TSE New Building (2016)


Thank you!

t se.i r

TURQUOISE PARTNERS

2015

A Presentation to

2nd Europe-Iran Forum

102

Post Sanctions Iran: Engine for Growth in the Region and Beyond

TURQUOISE PARTNERS – 2015

103

Post Sanctions Iran: The Market of The Next Decade


0

1,000

2,000

3,000

Egypt Turkey Iran Algeria Morroco Iraq Saudi Arabia

billi

ons

dolla

rs

GDP Per Capita at PPP

2009 2013 2017

World bank revised GDP growth for Iran from ~1% to 5% p.a. post

sanctions

Source: The International Monetary Fund, World Bank and Turquoise analysis

104

TSE: Low Multiples Compared to Frontier and Emerging Markets


Source: Tehran Stock Exchange, MSCI, * latest data available

MSCI Frontier Markets: P/E of 10.8*

TSE: P/E of 5.8*

MSCI Emerging Markets: P/E of 13.5*

12%

17% 18%

15%

12%

13%

17%

11%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

2006 2007 2008 2009 2010 2011 2012 2013

Divide

nd Yield (%

)

Tehran Stock Exchange Dividend Yield

105

Getting Paid to Wait: Consistently High Dividend Yield


Source: Tehran Stock Exchange, MSCI * latest available data

MSCI Frontier Markets: Yield of 4%*

TSE: Average Yield of 15%

MSCI Emerging Markets: Yield of 3%*

72%

63%

44% 39%

27% 24% 22%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Saudi Arabia

Emerging Markets

Next 11 ex. Iran

Turkey Fron'er Markets

Iran Egypt

Market C

ap/G

DP

Market Capitalization/GDP Ratio

106

Market Cap to GDP, One of the Lowest Globally


Source: World Bank, Tehran Stock Exchange

0.34

0.37

0.79

3.80

5.87

8.16

10.20

0 5 10 15

Emerging Markets (MSCI Index)

Saudi Arabia (MSCI Index)

Frontier Markets (MSCI Index)

Turkey (MSCI Index)

Egypt (MSCI Index)

Next 11 ex. Iran (MSCI Index)

Iran

%

Annualized 10yrs Index Performance in USD

107

Fantastic Return Even with Financial Crisis, Sanctions & Devaluation


Source: Tehran Stock Exchange, MSCI

One of the best performing markets in the world

108

Emerging “BRIC” Economy: Welcome to IRAN


• The leading manager of foreign portfolio investment in Iran with a market share of ~90%

• The leading broker-dealer for foreign investors on the Tehran Stock Exchange

• Manages two listed investment companies focused on strategic investments

• The only source of comprehensive English language research on Iranian companies

Our Story: Since 2005 …. Based in Tehran and London with 110 Professional Staff

Turquoise: Leading international financial services company

109 TURQUOISE PARTNERS – 2015

2005: 2006: 2009: 2010: 2010: 2011:

2011: 2012: 2012:

2015: 2015: 2015:

Vision Enable the Global Community to Access the Best Growth Opportunities in Iran

Turquoise Partners founded Turquoise Iran Equities Fund launched (90% of foreign portfolio investment on the TSE) Acquisition of 40% of Iran's 2nd largest insurance company (advisory) Launch of domestic mutual fund Acquisition of Firouzeh Asia Brokerage

Acquisition of IDIC (a return of 135% to date)

Butane Industrial (First bond issue for a private sector company) Seeded Sarava Pars (Iran’s first tech VC fund) European fundraising for Sheypoor, the leading classified site in Iran

Launched first TSE Index-linked ETF Acquisition of Etebar Investment Company JV with Charlemagne Capital IPO of Lia manufacturing on Farabourse

2015:


The Only EU-regulated Fund Dedicated to Iran Equities

•  Domicile Cyprus

•  Compliance Fully UN & EU Sanction Compliant

•  Investment Adviser Turquoise Partners & UK-based Charlemagne

Capital

•  Liquidity Monthly

•  Fees 2% Management Fee 20% Performance Fee Hurdle Rate of 8% p.a.

•  Currency Euro Dominated, Assets in IRR

•  Auditor Deloitte Cyprus

•  Administrator ATG Fund Services Limited

•  Minimum Investment 125,000 EURO

Contacts

Turquoise Partners (the “Company”) is making the information contained in the presentation (the “Information”) available to the recipient, to assist interested parties in making their own evaluation of a prospective transaction with or in respect of the Company.

In receiving the Information, the recipient is undertaking to treat the Information as confidential and only to use the Information for the purpose of evaluating a possible investment transaction involving the Company. The Information made available is not complete nor necessarily sufficient in order to properly evaluate a potential transaction. The Company makes no representations or warranties, express or implied, as to the accuracy or completeness of the Information.

The Company accepts no liability with respect to any use or reliance upon any of the Information.

www.turquoisepartners.com


Tehran Office No.10, 7th St. Vozara Ave. Tehran Iran

London Office 5th floor, 143 New Bond St. London, W1S 2TP United Kingdom

[email protected]

What’s all the fuss about?

112

CEO Iran Industries Investment

Company

Founding Partner & CIO

ACL Asset Management

Reza Soltanzadeh

Opportunities •  Capital Market

–  Fixed Income •  Infrastructure Projects •  Upstream Projects •  Corporate and Trade Finance

–  Equity •  Portfolio Investments •  Joint Ventures •  Strategic Takeovers

•  Private Equity –  Green Field Projects –  Brown Field Projects –  Strategic Buyouts

114

Where to begin?

115

Alternatives

•  Direct Investment •  Dealing with an Asset Manager

116

Getting an Investor ID

117

SEO Regulated Securi'es Broker

Client Individual

Ins'tu'on

Central Securi'es Depository of Iran

1.  Complete Application 2.  Proof of Address 3.  Attest Signature at Iranian

Consulate 4.  Notarized Passport Copy

1.  Verify Application 2.  Complete KYC forms 3.  Verify Address 4.  Verify Signature 5.  Submit al documents

to Central Securities Depository of Iran

1.  Verify Application 2.  Verify KYC Forms 3.  Verify Passport 4.  Issue Investor ID

Offshore Iran

Retail Banks

Retail Banks

Regulated Exchange Companies

1.  After Investor ID Issued could open Saving Accounts

2.  Accounts in Rials, USD, EUR

Regulated Financial Institutions

Type No.

Brokers 106

Investment Banks 9

Asset Managers 7 + 1

Investment Advisors 7

Investment Funds 159

Investment Companies 66

118

Securities Brokerages

•  SEO Regulated •  Board Members and Managing Director are SEO approved •  Fully licensed staff of Analysts and Securities Traders •  Approved IT Infrastructure •  Online Trading Tools •  Provide Industry and Company Reports •  Collect Dividend with a Power of Attorney •  Provide Portfolio Reports including daily NAV calculations •  Anti Money Laundering Protocols Exercised •  None of the Brokerages have ever been on any Sanction list

119

Asset Management Companies

•  SEO Regulated •  Board Members and Managing Director are SEO approved •  Fully licensed staff of Analysts •  Work with a Prime Broker •  Licensed for Fund Management and Managed Accounts •  Approved IT Infrastructure •  Provide Industry and Company Reports •  Collect Dividend with a Power of Attorney •  Provide Portfolio Reports including daily NAV calculations •  Currently 7 local Asset Management Companies and 1 Foreign Asset

Management Company

120

Before you Begin

•  Find your local partner

–  With a sound Investment Philosophy

–  Oriented both Locally and Internationally

–  Excellent Reputation in the Country

121

122

Thank You

IRAN SECURITIES MARKET FROM INFORMATION TECHNOLOGY PERSPECTIVE

5:10pm - 5:30pm: Closing Keynote: Iran- Unparalleled Potential For Turning Threats into Opportunities Ø  Pedram Soltani, Vice President, Iran Chamber of Commerce, Industry,

Mines, and Agriculture

Friday, SEPTEMBER 25, 2015

9:00am - 9:05am: Chairs’ opening remarks Ø  John Andrews, Consultant Editor, The Economist

@EuropeIranForum #EuropeIranForum

9:05am - 9:25am: Opening Keynote: History and Trajectory for Europe-Iran Relations Dominique de Villepin Former Prime Minister, Former Minister of Foreign Affairs, France

9:25am - 9:40am: Opening Keynote: JCPOA "Implementation Day" from the Iranian Perspective

Ø  Adbulrasoul Dorri Esfahani, Senior Advisor to the Governor, Central Bank

of The Islamic Republic of Iran

Liaing of Iranian Sanc'ons

140

JCPOA

•  On 14 July 2015 the Joint Comprehensive Plan of Ac'on (JCPOA) was signed in Vienna.

•  By endorsing the JCPOA, Res 2231 terminates all provisions of previous UN SC resolu'ons on the Iranian nuclear issue -‐ 1696 (2006), 1737 (2006), 1747 (2007), 1803 (2008), 1835 (2008), 1929 (2010) and 2224 (2015)

141

Timeline •  JCPOA will take effect 90 days aaer the council's endorsement

(or earlier if agreed by E3/EU+3 and Iran) (‘Adop'on Day’).

•  Adop'on Day is expected to take place by mid-‐October (approximately 18 October 2015).

•  UNSC, US and EU sanc'ons will begin to be LIFTED once there is an IAEA-‐verified implementa'on of agreed nuclear-‐related measures outlined under the JCPOA ('Implementa'on Day').

•  'Implementa'on Day' is not a set date – it is expected to be in January 2016

142

Liaing of EU Sanc'ons

•  With the Implementa'on of the JCPOA “all nuclear-‐related economic and financial sanc'ons” are liaed

•  Provisions of EU implemen'ng Regula'on 267 will be terminated

•  Council Decision 2010/413 will be suspended; •  US nuclear sanc'ons provisions will cease to apply

143

Banking •  Financial and banking transac'ons with Iranian banks and financial ins'tu'ons, including the Central Bank of Iran, Government of Iran and specified individuals and en''es -‐ including the opening and maintenance of correspondent accounts at non-‐U.S. financial ins'tu'ons, investments, foreign exchange transac'ons and lesers of credit

•  Transac'ons in Iranian Rial

•  Provision of U.S. banknotes to the Government of Iran

144

Banking Services •  Transfers of funds between:

–  EU persons and en''es, including financial ins'tu'ons, and –  Iranian persons and en''es, including financial ins'tu'ons

•  Banking ac'vi'es –  including the establishment of new correspondent banking rela'onships and the opening of new branches and subsidiaries of Iranian banks in the territories of EU Member States

•  Supply of specialised financial messaging services, including SWIFT, for persons and en''es including the Central Bank of Iran and Iranian financial ins'tu'ons

145

Government Grants & Bonds

•  Commitments for grants, financial assistance and concessional loans to the Government of Iran

•  Transac'ons in public or public-‐guaranteed bonds

•  Purchase, subscrip'on to, or facilita'on of the issuance of Iranian sovereign debt, including governmental bonds

146

Insurance

•  Financial support for trade with Iran (export credit, guarantees or insurance)

•  Provision of underwri'ng services, insurance and reinsurance

147

Oil & Gas •  Import and transport of Iranian oil,

petroleum products, gas and petrochemical products

•  Export of key equipment or technology for the oil, gas and petrochemical sectors

•  Export, sale or provision of refined petroleum products and petrochemical products to Iran

148

Oil & Gas (cont.)

•  Investment, including par'cipa'on in joint ventures, provision of goods, services, informa'on technology and technical exper'se suppor'ng Iran’s oil, gas and petrochemical sectors

•  Purchase, acquisi'on, sale, transporta'on or marke'ng of petroleum, petrochemical products and natural gas from Iran

•  Transac'ons with Iran's energy sector

149

Naval & Cargo •  Transac'ons with Iran’s shipping and shipbuilding sectors

and port operators •  Export of key naval equipment and technology

•  Design and construc'on of cargo vessels and oil tankers

•  Provision of flagging and classifica'on services

•  Access to EU airports of Iranian cargo flights

150

Gold, Money, Metals

•  Export and trade in gold, precious metals and diamonds

•  Provision and delivery of US banknotes

151

Sanc'on Lists & Automobile

Automobile Sale, supply or transfer of goods and services used in connec'on

with Iran’s automo've sector Sanc'on lists •  Designa'on of persons, en''es and bodies (asset freeze and visa

ban)

•  Remove individuals and en''es from the SDN List, the Foreign Sanc'ons Evaders List, and/or the Non-‐SDN Iran Sanc'ons Act List

152

Associated Services

•  Associated services for each of the categories above. “Associated services" means any service – including: technical assistance, training, insurance, re-‐insurance, brokering, transporta'on or financial service that are necessary and ordinarily incident to the underlying ac'vity for which sanc'ons have been liaed pursuant to the JCPOA.

153

Other Furthermore, under JCPOA Ar'cle 22 the US will allow for:

•  the sale of commercial passenger aircraa and related parts and services to Iran;

•  license non-‐U.S. persons that are owned or controlled by a U.S. person to engage in ac'vi'es with Iran consistent with the JCPOA; and

•  license the importa'on into the United States of Iranian-‐

origin carpets and foodstuffs.

154

Addi'onal Sanc'on Relief Addi8onal Sanc8on Relief (Ar;cle 24) Representa;on by US and EU •  Annex II of the JCPOA provides the full and complete list of all

nuclear-‐related sanc'ons or restric've measures – they will be liaed in accordance with Annex V.

•  Furthermore if at any 'me following the Implementa'on Day, Iran believes that any other nuclear related sanc'on or restric've measure of the E3/EU+3 is preven'ng the full implementa'on of the sanc'ons liaing under the JCPOA, the JCPOA par8cipant in ques8on will consult with Iran with a view to resolving the issue and, if they concur that liWing of this sanc8on or restric8ve measure is appropriate, the JCPOA par8cipant in ques'on will take appropriate ac'on.

155

Engaging in sanc'on liaed ac'vi'es

•  Under Ar'cle 30 JCPOA – the EU and US will not apply sanc8ons or restric8ve measures to persons or en88es for engaging in ac8vi8es covered by the liWing of sanc8ons provided for in the JCPOA.

•  Furthermore non-‐U.S., non-‐Iranian financial ins'tu'ons engaging in transac'ons with Iranian financial ins'tu'ons (including the Central Bank of Iran) not appearing on the SDN List will not be exposed to sanc'ons as a result of those Iranian financial ins'tu'ons engaging in transac'ons or banking rela'onships involving Iranian individuals and en''es, including financial ins'tu'ons, on the SDN List. This is provided that the non-‐U.S., non-‐Iranian financial ins'tu'on does not conduct or facilitate, and is not otherwise involved in, those specific transac'ons or banking rela'onships with the Iranian individuals and en''es, including financial ins'tu'ons, on the SDN List, directly.

156

Implementa'on – local law US Implementa8on (Ar;cle 25 JCPOA) If a law at the state or local level in the United States is preven'ng the implementa'on of the sanc'ons liaing as specified in the JCPOA, the United States will take appropriate steps, taking into account all available authori8es, with a view to achieving such implementa'on.

157

Re-‐introduce/ Re-‐impose Sanc'ons Re-‐introduce/ Re-‐impose sanc8ons (Ar;cle 26 JCPOA)

•  The EU and US will refrain from re-‐introducing or re-‐imposing the sanc8ons that they have terminated/ ceased to apply under the JCPOA, without prejudice to the dispute resolu8on process provided for under the JCPOA.

•  There will be no new nuclear related UN Security Council

sanc8ons or EU nuclear-‐related sanc8on or restric8ve measures.

•  The US Administra8on will refrain from imposing new nuclear-‐

related sanc8ons.

158

Public guidelines on sanc'on liaing Public guidelines on sanc8on liWing (Ar;cle 27 JCPOA)

•  The E3/EU+3 will take adequate administra've and

regulatory measures to ensure clarity and effec'veness with respect to the liaing of sanc'ons under the JCPOA.

•  The EU, its Member States and the United States will issue relevant guidelines and make publicly accessible statements on the details of sanc'ons or restric've measures which have been liaed under the JCPOA, consul'ng as oaen as required with Iran regarding the content of the guidelines.

159

Successful Implementa'on Successful Implementa8on (Ar;cle 28 JCPOA)

•  The E3/EU+3 and Iran commit to implement the JCPOA in good faith and in a construc've atmosphere to enable its successful implementa'on.

•  Senior Government officials of the E3/EU+3 and Iran will

make every effort to support the successful implementa'on of the JCPOA, including in Public Statements.

160

Trade Trade Normalisa8on (Ar;cle 29 JCPOA) The EU, its Member States and the United States will refrain from any policy specifically intended to directly and adversely affect the normalisa'on of trade and economic rela'ons with Iran -‐ inconsistent with their commitments to successfully implement the JCPOA.

Trade, Technology, Finance and Energy (Ar;cle 33 JCPOA)

•  The E3/EU+3 and Iran will agree on steps to ensure Iran’s access in areas of trade, technology, finance and energy.

161

9:40am - 10:40am: Holistic Compliance: Navigating International and Domestic Regulatory Frameworks in Tandem Ø  Sara Nordin, Senior Associate, White & Case

Ø  George Kleinfeld, Partner, Clifford Chance

Ø  Ramin Hariri, Partner, Dentons Europe

Ø  Homayoun Arfzadeh, Partner, Python & Peter

EU sanc8ons: Iran related measures and

JCPOA

Sara Nordin

September 25, 2015

When do EU sanc'ons apply?

Where? q  Within EU territory q  On board aircraas/vessels under EU Member State jurisdic'on

Who/what? q  Na'onals of Member States (even if outside EU territory) q  En''es incorporated/cons'tuted under Member State laws q  Any legal person, en'ty or body in respect of any business done in whole

or in part within the EU

165

“Nuclear related” sanc'ons

•  Regula'on 267/2012:

–  Asset freeze and financial/insurance sector restric'ons (incl. no'fica'on/authoriza'on requirements for fund transfers)

–  Oil, gas, petrochemical, shipping, shipbuilding and transport sector restric'ons

–  Arms embargo, dual-‐use and nuclear related product restric'ons

–  Other product restric'ons (diamonds, gold, precious metals, graphite and raw or semi-‐finished

metals, industrial processing soaware, etc.)

•  Par>al suspension in place un>l January 14, 2016

166

“Human rights related” sanc'ons

•  Regula'on 359/2011: – Asset freeze –  Internal repression equipment ban – Telecom monitoring equipment, technology and soaware ban

•  Expected to remain in place, as not liGed under JCPOA

167

JCPOA Implementa'on Plan

168

White & Case LLP

Quai du Mont-‐Blanc 5 1201 Geneva Switzerland T + 41 22 906 9800 F + 41 22 906 9810

In this presenta'on, White & Case means the interna'onal legal prac'ce comprising White & Case LLP, a New York State registered limited liability partnership, White & Case LLP, a limited liability partnership incorporated under English law and all other affiliated partnerships, companies and en''es.

White & Case LLP

Wetstraat 62 rue de la Loi 1040 Brussels Belgium T + 32 2 239 26 20 F + 32 2 239 26 26

George Kleinfeld, Partner, Clifford Chance

US Sanctions Risks

1.   What Iran-‐related ac8vi8es do US sanc8ons authorize prior to Implementa8on

Day?

2.   Implementa8on Day: Which US sanc8ons go away, and which stay in place?

3.   Impact on Non-‐US Persons of con8nuing applicability of sanc8ons to US persons, US-‐origin goods and USD payment ac8vity

4.   Snap-‐back: risks and implica8ons

5.   January 2017 – Can President Trump tear up the JCPOA?

Inves8ng in Iran: How to manage risks to create

opportuni8es ?

Geneva, September, 2015

Ramin Hariri Partner, Dentons Europe LLP

Managing risks of doing business in Iran

•  As ever with sanc'ons, the JCPOA does not present a clear "greenlight" to doing business with Iran

•  The permissibility of a par'cular ac'vity aaer Implementa'on Day is one thing but does not address the full scope of regulatory, poli'cal, transac'onal and opera'onal risks an Iranian business strategy can entail.

•  People will need to think carefully about the risks of a snap-‐back of sanc'ons, the impact of a phased relaxa'on of sanc'ons and the risks inherent in doing business in Iran.

172

Managing risks of doing business in Iran •  Understand and effec'vely manage the public

rela'ons and reputa'onal risks that can flow from doing business in Iran, par'cularly as regards lobbying government to ensure your ac'vi'es, reputa'on and enforcement posture are managed effec'vely;

•  Obtain poli'cal risk repor'ng and monitoring to inform you of the current government and business dynamics and how those dynamics can effect your business interests at any given 'me and any business relevant changes to those dynamics;

•  Carry out independent due diligence of counterpar'es at the outset, so you know who you are really doing business with and determine whether you want them as business partners;

•  Manage regulatory risks and the impact that an Iranian business line has on your regulatory compliance programme, including programme updates, design and implementa'on for sanc'ons compliance and an'-‐bribery compliance and associated training and awareness building internally;

173

Managing risks of doing business in Iran •  Understand the legal framework of Foreign direct investment (FDI) in

Iran: -‐  Bilateral investment trea'es (BIT) and Double Tax trea'es signed

between Iran and EU members -‐  Poli'cal and commercial risk insurance coverage -‐  FIPPA : Scope, coverage and limita'ons -‐  Iranian Model Contracts (Iranian Petroleum Contract, BOT, EPC and

EPCF, ..) -‐  Procurement laws / selec'on of contractors -‐  Foreign poreolio investment in Tehran Stock Exchange -‐  Foreign exchange rules -‐  Land use -‐  Tax and labour issues (including expatriates) -‐  Environmental regula'on -‐  Intellectual property rights -‐  Dispute resolu'on

174

Thank you

SECURING IRANIAN TRANSACTIONS:

THE LEGAL PERSPECTIVE by

HOMAYOON ARFAZADEH Ph.D. Partner

I.  INTRODUCTION :

Converging and merging two perspectives:

•  Foreign counterpart or partner

•  Iranian counterpart or partner

II. TYPICAL RISKS SURROUNDING IRANIAN

TRANSACTIONS AND INVESTMENTS

A.  Typical risks for foreign parties

•  Regulatory risks

•  Creeping expropriation

•  Monopolies and lack of transparency

•  Dispute with private and public partners or counterparties

•  Intermediaries and corruption

B.  Typical risks for Iranian parties

•  Over pricing

•  Default and defect

•  Project financing

•  Foreign bankruptcy

•  Sanctions and other adverse regulatory measures

•  Intermediaries and corruption

C.  Intermediaries: avoiding pitfalls through transparency

III. THE FUNDAMENTAL ROLE OF CONTRACT

•  Knowing your partner

•  Negotiations and drafting

•  Export guarantee and insurance

•  Project finance

•  LC, bank guarantees, performance guarantees

•  Contractual penalties (delay in performance, defects in quality, … etc)

•  Applicable law

•  Dispute resolution clause

IV. DISPUTE RESOLUTION

A.  Negotiate without threatening

B.  Litigation: continuation of business by other means

•  Court or arbitration?

•  Courts in Iran

•  Courts in Europe

•  Parallel criminal proceedings in Iran in relation to business transactions

•  Interim and conservatory measures

V. ARBITRATION A.  Pro and cons of Arbitration

•  Neutrality

•  Choice of the institution

•  Appointment of arbitrators

•  Choice of the seat

•  Choice of procedural rules

•  Costs and financing

•  Length

•  Enforcement of awards in Iran

•  Enforcement of awards in Europe

B.  Arbitration in Switzerland

•  Arbitration institutions

•  Supporting court system

•  Tale of a banking dispute

VI. CONCLUSION One stop law firm and a comprehensive +”global” approach.

Homayoon Arfazadeh Partner Attorney-at-Law Geneva & New York Ph.D. International law LL.M. New York University 2, rue Charles-Bonnet, CH-1206 Genève Tel. +41 22 702 15 15 - Fax +41 22 702 14 44 [email protected] Geneva - Pully - Lausanne - Bern - Sion - Zug – Bruxelles - Tokyo www.pplex.ch

11:10am - 12:10pm: Oil & Gas: Iran's Economic Cornerstone

Moderator: Elham Hassanzadeh, Managing Director, Energy Pioneers

Ø  Ali Kardor, Head of Investment, Deputy Managing Director, NIOC

Ø  Issa Mashayekhi, Managing Director, National Petrochemical Company

International

Ø  Alexandre Oliveira, Emerging Markets Oil & Gas Leader, EY

Opportunities for

Investment & Financing

in Iranian Oil & Gas Industry

Ali Kardor

Vice President in Investment and Financing

NIOC

2nd Europe-Iran Forum

Geneva

Sep 2015

Global Energy Supply

Investment 2014-2035

OECD/IEA 2014

Gas: 8.7 T$

Oil: 13.6 T$

55%

•  The world`s projected energy consumption will require more than 40$ Trillion investment in

energy supply from 2014-2035.

•  55% of total energy supply investment, belongs to oil and gas sectors.

•  61% of energy supply investment of Middle East will be in oil sector.

Required Investment in Iran`s Oil & Gas Industry

(2016-2025)

Upstream 176

Downstream 77

Total 253

Billion $

Investment/Financing Methods

Exploration Development Production Downstream

•  EPCF & EPDF

•  Finance (Corporate, Project)

•  Usance based EPC

•  Bonds

•  ECA Mechanism

•  Credit Line or Loan

•  Iranian Petroleum Contract (IPC)

• Foreign Direct Investment (FDI)

• PPP, BOO, BOT, …

• Joint Venture

Main Downstream Activities

• Gas gathering and utilization projects (GTL , LNG. FLNG, …)

• NGL projects

• Construction of power plants, storage facilities, …

• Refinery construction or development

To B

e P

riva

tize

d To B

e Privatized

Bankability of Downstream Activities

Guaranteed feed supply for long term (e.g. feed gas)

Reasonable feed price linked to products price (e.g. 3.6 $/MMBtu for methane)

5% oil price discount for domestic refineries

Privatization up to 100% in downstream projects (NGL, GTL, refineries, …)

Attractive rate of return (minimum 15%)

Upstream Sector

New Contractual Model

Iranian Petroleum Contract

(IPC)

IPC details

& related projects

will be unveiled

in the international seminar in

Tehran in Mid. Nov. 2015

Main Objectives

• Reasonable Government & Contractor Take

•  Integrated operation (E,D,P)

•  Long Term Contract (15-20 years)

•  Flexibility

• Balancing the Risk-Reward for the investors

• Maximizing incentives for investors in high risk areas

• Technology transfer

• Partnership with Iranian companies (Establishing JOCs in Iran)

Dynamic Development Plan

Annual Work Program and Budget instead of fixed capex

Flexible for different fields (high/low risk, common fields, onshore/offshore, …)

Flexible Reward considering the return of investor, oil price & production level of the field

Integrated operations (E&P), EOR/IOR

Chance of further Exploration operations in neighboring blocks in case of failure

Flexibilities

•  Operating Costs

• Indirect Costs

•  Direct Capital Costs

DCC IDC

Tax OPEX

Main Characteristics: Costs

Main Characteristics: Cost Recovery

ü  Commencing from First Production Date

ü  DCC recovery 5-7 years

ü  Cost Petroleum Ceiling: 50% of Production

ü  COM= Libor + X%

ü  IDC & Opex shall be recovered on current basis.

Production Profile

0102030405060708090

100

1 3 5 7 9 11 13 15 17 19 21 23 25year

Prod

uctio

n (oo

o b/d)

Early Prod

Final Production (Plateu)

Natural Depletion

(Sample)

Main Characteristics: Reward System

Fee for production

R-Factor based

RF =

Cumulative amounts received by contractor as per annual financial report

Cumulative costs paid up to annual financial report

Main Characteristics: Reward System

Fee based on RF (Sample Figures)

Production (Kb/d)

RI<1 1≤RI<2 2≤RI<3 3≤RI<4 RI≥4

< 50 A1 B1 C1 D1 E1

50-100 A2 B2 C2 D2 E2

100-200 A3 B3 C3 D3 E3

> 200 A4 B4 C4 D4 E4

Note: A1= Max. Fee E4 = Min. Fee

Production (Bcf/d)

RI<1 1≤RI<2 2≤RI<3 3≤RI<4 RI≥4

< 1 A1 B1 C1 D1 E1

1-2 A2 B2 C2 D2 E2

2-3 A3 B3 C3 D3 E3

> 3 A4 B4 C4 D4 E4

$/bbl

$/mcf

AUrac8on

Fee linkage to oil/gas price

Float on risk, field type and production

Higher Fee for IOR/EOR Activities

conclusion

Extending new Horizons to

Secure Energy Supply

Thank You

Presenta8on on EU-‐Iran Forum Geneva, Switzerland (September 24 & 25, 2015 )

Content: •  Iran Petrochemical Industry •  Persian Gulf Petrochemical Industries Co.

–  Poriolio –  Development Strategy –  Investment Projects

•  Opportuni'es for Joint Collabora'on

•  Investment Asrac'ons •  NPC Interna'onal Ltd. •  Concluding Remarks

–  Financing and Investment Environment –  Current Circumstances and Post Sanc8on –  Restart a Business

Silk Road Iran Stands on crossroad of trade from ancient time

History of Petrochemical Industry of Iran

•  More than 50 years old •  1958 : Shiraz Chemical Fer'lizer Co. as the First Plant •  1963 : Establishment of Na'onal Petrochemical Company (NPC)

-‐

20.00

40.00

60.00

80.00

100.00

1958 1977 1988 1994 1999 2014

0.10 2.70 0.90 7.50

15.10

42.50

1

21 16

47

70

100

Petrochemical Industry development trend

Actual Produc8on (million ton)

Products Variety Plan

Iran Petrochemical Industry Snapshot

•  ICIS Evalua'on

•  World Market Share

Year World Ranking 2004 82 2011 12

Year World Ranking 2004 1.1% 2011 4.2%

India 13%

South East Asia 23%

Chian 22%

Far East countries

18%

Europe 5%

Middle East 19%

•  Export Market

Risks •  Economic Risks:

–  Infla'on –  An aggregate of economic growth –  Monetary stability –  Current account deficit/ surplus –  Unemployment & structural imbalances

•  Legal Risks: –  Regulatory ease –  Strength of incen'ves –  Administra've aids

•  Poli'cal Risks: –  Poll results of poli'cal risk analysis –  Risk insurance brokers –  Bank officers reported in Euro money’s bi-‐annual country risk ranking

•  Infrastructure Risks: –  incomplete and inferior transporta'on and communica'on networks

Oil Industry Structure

PGPIC (NPC 20%, J.S. 40%, P.F. 17% , TPPIC 9% & Others 5%)

Petroleum Ministry

NIOC NPC NIRODC NIGC

Private Companies

NPC is in charge for development policies of petrochemical industry in Iran.

Public share 40%

NPC 20%

Pension Fund 17%

Taban Farda Petrochemical

Group Company

9%

Tamin Petroleum & Petrochemical

investment company 9%

Others (IPO) 5%

Shareholders

PGPIC Board of Directors

Chief Executive Officer

& board member

Chairman of the board Vice Chairman of the

board

Board member

Board member

A.Sheri Moghaddam F.Saghafian

A.Nejadsalim M.Omidghaemi A.Imami

PGPIC Introduc'on

•  Incorporated on 22nd Sep. 2011

•  Priva'zed on (Listed in TSE ) 16th April 2013

•  Registered Capital: about 885 M$

•  Capital Raising Plan 3.5 Billion $

•  Current Market Value: 9.1 Billion $

•  Current Market Value(including Petrol and Mobin) : 11.8 Billion $

Financial Highlights Based on Consolidated Audited Financial Statement for the Year Ended 20th June 2014

•  Consolidated Asset : 16.2 Billion $

•  Sales : 10.8 Billion $

•  ROE : 55.6%

•  ROA : 17.5%

•  42% of Iran’s total Petrochemical export

•  10% shares of Iran’s stock market

Produc'ons Companies of PGPIC

Bandar Imam PC

Khozestan PC

Arvand PC

Bou Ali Sina PC

Tondguyan PC Nouri PC

Global and regional rankings Descrip8on Racking

Profitability index, Export index in Iran (IMI 100 ranking)

Top

Sales index in Iran (IMI 100 ranking)

3rd

Chemical company in Middle East in 2014 (ICIS ranking)

2nd

Chemical company in the world in 2014 (ICIS ranking)

44th

215

24.6 Current Capacity (MM tons)

PGPIC Production Capacity

40% IRAN

petrochemical capacity

Fuel & Feed products

49%

Basic and chemical products

24%

Aromatics 14%

polymers 11%

others 2%

PGPIC’s Development Strategies

Development Strategies

Investment in Stock Market

New Projects

Development of current subsidiaries

with growth poten8als

Projects under execu'on: 6.2 bn €

Projects in Engineering Phase: 4 bn€

Projects under Study: 5 bn €

Opportuni'es for joint collabora'on

•  Joint Investment in Development Projects

•  Transfer of Technology (new technologies and licenses)

•  Trading (selling products and opening western markets)

•  Financing Facili'es – pre-‐financing

Abundant Natural Resources Considerable petroleum reserves Compe''ve prices

Developed Infrastructure

Communica'on & Transporta'on Networks Availability of required U'li'es

Experienced workforce

Reasonable IRR

Unique Geographical loca8on

Foreign Investment Promo8on & Protec8on Act

Intensive development plans

Free Economic Zones

Export Guarantee

Investment Incentives

Development Hubs

New Hub of Petrochemical

Industry Chabahar

Investment Projects 2 Urea – Ammonia Projects

Veniran-Apadana Methanol Project

2nd Olefin & Ethane Recovery Project

Ethylene Glycol / Ethylene Oxide Project

NGL 3200 Project

NGL-2300 Project

Bid Boland Refinery

PA

RS

EE

Z P

ETZ

ON

E

Oth

ers

NPC International Ltd. (“NPCI”)

•  Established in 1992 as private limited Company •  Registered in United Kingdom with its main office in London

•  100% of Shares belongs to PGPIC •  Main Area of ac'vi'es:

–  Financing of Petrochemical projects –  Joint venture development

•  Acquiring foreign Investment in Iran •  Investment in Foreign countries

221

NPCI Board of Directors

Chief Executive Officer

& board member

Chairman of the board

Vice Chairman of the board

Board member

A.Nejadsalim

R.Ashrafzadeh I.Mashayekhi S.A.Shah Cheraghi

NPCI Historical View •  Finance

–  Dealing with Major Interna'onal Creditors& ECAs –  Providing almost €6 billion financial facility to petrochemical Projects

223

2,466 1,164

676

240

556 170 159

183

86 146

Deutsche Bank HSBC JBIC SG ING Calyon Standard Chartered Fortis Aresbank

ECAs

UK Export Finance (ECGD) UK

Hermes Germany

COFACE France

SACE Italy

NEXI Japan

KEXIM Korea

CESCE Spain

ONDD Belgium

EKN Sweden

NPCI Historical View •  Joint Ventures

– Completed In Iran

– Under Development

224

Company Foreign Investor

Arya-‐SGS Switzerland Inspec'on

Arya Sasol South Africa Olefin

Laleh Netherland LDPE

Hegmataneh Italy PVC

Karun Germany/Sweden Isocyanate

Mehr Japan/Thailand HDPE

Project Name Capital investment

Ammonia-‐Urea Hormoz €526 million

Ammonia-‐Urea Hengam €474 million

Methanol Veniran Apadana €500million

Concluding remarks •  Considering investment and financing environment, we highly respect all interna>onal rules and

regula>ons

•  Aggressive development plan for increasing Iran produc>on capacity to 180 million ton in 10 years

•  In today’s world Economic and technical coopera>on/collabora>on is not a choice, it is a must

•  Releasing the economic ac>vi>es from poli>cal issues helps to realize the business and economics of the

world, make reduce the crisis in the world

•  Europe s>ll suffering from supreme crisis and credit crunch of 2008, and investment in Iran’s offered

opportuni>es would serve mutual interest of both side

•  As it is the restart of old business , all required means and structures are already in place

Petrochemical Industry Development Plan

0 20 40 60 80 100 120 140 160 180

Current 10 Years Plan 20 years vision

44

120

180

Produc8on Capacity (million ton)

0 10 20 30 40 50 60 70 80 90 100

Current 10 Years Plan 20 years vision

22

66

99

Revenue (Billion US$)

Over 70bUS$ has to be invested in developing plan during next 10 years The main emphasis is to acquire foreign investment and finance

Persian Gulf Petrochemical Industries Co. Poreolio (60 companies)

Urea-‐ Ammonia Project Summery

Project Urea-‐Ammonia Place Pars Economic Zone Phase 2

Contract EPC

Construc'on Period 44 months

Opera'on Period 15 Years

Investment Capital ≈ 380 M €

Produc'on Capacity Ammonia: 726,000 T/Y, Urea: 1,072,000 T/Y

Feedstock Price 13 Cents / m3

IRR > 25 %

Methanol Project Summery

Project Methanol Place Pars Economic Zone Phase 2

Contract EP

Construction Period 41 months

Operation Period 15 Years

Investment Capital 462 M € 30% Equity 70% Loan

Production Capacity Methanol: 1.650.000 T/Y,

Feedstock Price 13 Cents / m3

IRR > 25 %

2nd Bidboland Refinery Project

Project Gas Refinery

Place Behbahan (khozestan province)


The remaining construction period: 40 months Investment Capital 2,255.56 M €

30% Equity 70% Loan Contract EPC

Contractor: Kayson Jonoob and Jahan Pars Co Actual Progress 20 %

Actual cost (Early work) 400 MM €

Projects under study

Project 2nd Olefin & Ethane Recovery

Place Petrochemical Special Economic Zone


Investment Capital 562 M €

30% Equity 70% Loan

IRR 41%

Project Ethylene Oxide/ Ethylene Glycol

Place Petrochemical Special Economic Zone


Investment Capital 298 MM €

30% Equity 70% Loan

IRR 41%

Projects under study (cont.) Project NGL 3200 Place Petrochemical Special Economic Zone Construction Period 48 months Investment Capital 1,054.07 MM €

30% Equity 70% Loan Actual Progress 5.86 %

Project NGL 2300 Place Petrochemical Special Economic Zone Construction Period 44 months Investment Capital 669 M €

30% Equity 70% Loan

6th Floor, N.I.O.C House, 4 Victoria Street, London SW1H ONE, United Kingdom Tel: +44 20 7222 0899 Fax: +44 20 7222 0897 Internet: [email protected] Registered in England & Wales No.2696754 VAT Registration No. 563217549

Official Office in Tehran: No.22, 5th Alley, Ahmad Ghasir Ave., Tehran Iran.

P.O.Box: 1513643911, Tel: +98 21 8855 4782 Fax: +98 21 8871 3346

1:10pm - 2:10pm: Humanitarian Trade Finance: Fundamentals on the Fundamentals Ø  Charles de Boissezon, CEO, Hinduja Bank Switzerland

Ø  Amir Handjani, President, PG International Trading, Cargill International SA

Ø  Klaus Merz, CEO, Pillar Merchant

The Grain Trade in Iran

Amir Handjani September 25, 2015


Source: Interna'onal Energy Agency

Projected Grain Imports 2015-‐2016

Projected Cereal Consump'on 2015-‐2016

Thurgauerstrasse 108 8152 Glattpark / Zurich, Switzerland

September 2015

Swiss Financial Institution - History

■  Founded in 1963 by Brown Boveri Corporation (now ABB)

■  A bank with Swiss bank license between 1996 and 2012

■  From 2003 to 2014 owned by Swedish investors (Nordkap Bank AG)

■  Bought in March 2015 by a German investor, active in the petrochemical and polymer business in Europe and Middle-East

■  Changed Name from Nordkap AG (formerly Nordkap Bank AG) to Pillar Merchant AG in March 2015

■  Application for a new banking license in process

245

Swiss Financial Institution – Core Business ■  Expert in corporate finance, project-, trade- and export financing

■  Track record of several hundred financed transactions all around the

world, with a focus on emerging markets

■  Well known arranger and lender in the international capital markets

■  Large network of clients and banks

■  Focus on infrastructure, oil & gas and commodity financing

■  Experienced trader of financial assets

246

Our Business Strategy (bank license pending)

247

Act as a classic merchant bank

Regional focus

Relationship banking

Investors

Credit & Debit Card

Specialised arranger and lender in corporate finance, project-, trade- and export finance; commodity finance in energy, infrastructure and commodities Advising trade finance funds with a future focus on Iran (subject to lifting of sanctions) Middle East including Iran, Europe

Provide specialised and tailor-made financial services to clients (Swiss trading companies; corporates; banks; investors)

Offer Credit/Debit Card business in less developed markets together with close partners

Offer correspondent banking solutions Advise trade finance funds in their investment strategy

248

Pillar Group

Contact

249

Klaus Merz , CEO

Phone: +41 44 306 4920 Fax: +41 44 306 4911 Mobile: +41 79 755 4210

[email protected]

Kerstin Rotter Phone: +41 44 306 4921 Fax: +41 44 306 4911 Mobile: +41 79 307 3440

[email protected]

Samara Jaberzadeh, HR & Management Assistant/Office Manager Phone: +41 44 306 4919 Fax: +41 44 306 4911

[email protected]

Christa Waldmeier, CFO

Phone: +41 44 306 4923 Fax: +41 44 306 4911 Mobile: +41 79 7991342

[email protected]

2:10pm - 3:10pm: PE and VC: Opportunity and Ownership in an Entrepreneurial Economy Ø  Said Rahmani, CEO, Sarava

Ø  Xanyar Kamangar, Founding Partner, Griffon Capital

Ø  Mohammad Nikjoo, Managing Director, Amin Investment Bank

Ø  Ali Amiri, Partner, ACL

“Why Private Equity doesn’t work in Iran”

Debunking the myths

SEPTEMBER 2015

ASSET MANAGEMENT AND PRIVATE EQUITY

Xanyar Kamangar Founding partner

“Private Equity investment in Iran is still years off” July 2015 –

Wall Street Journal

Griffon Capital will be managing the first private equity investments for Iran focused on the

“rise of the consumer middle class”

253

Some of the public views

“The simple answer is No! It’ll be a while before we get enough conviction around Iran to open an office [and invest]”

May 2015 – President Blackstone Group

WHY RELEVANT?

“[…] growth in consumer goods, tech and pharma may offer returns for those with a sharp eye on cultural perspective. However, […] Iran may remain unattractive to all but the most robust risk takers”

August 2015 – Hogan Lovells

254

Key arguments

•  Limited investor protec'on

•  Lack of deal flow

•  No leverage, low return

•  Impossible to turnaround

•  No exit routes

255

Key arguments

•  Limited investor protec8on





Context:

Is Iran a fron8er market,

an emerging market or a

developed one?

256

Key arguments

•  Limited investor protec8on





World Bank

“Enforcement of contracts”

65 Canada

66 Iran …

69 Spain

…

…

147 Italy

Source: World Bank – Ease of doing business report 2015

257

Key arguments


•  Lack of deal flow •  No leverage, low return



“How can one access deals?”

•  State controlled economy

•  No appe'te to sell

•  No formal pipeline

•  ````

State

25% of GDP

63% of top 500 private

-‐ Capital starved -‐ Significant poten'al

Full team on the ground

Corporate finance

12 years

Proprietary deal flow

=

258

Key arguments



•  No leverage, low return •  Impossible to turnaround


“How can one get 25% IRR and 2.5x money?”

Focus on efficiency and growth vs

financial engineering

10%

Revenue growth

1.5x

Mul'ple expansion

5%

Margin increase

10%

Dividend yield

4.0x Note: assuming 5yrs holding, annual revenue growth rate, total margin increase and PE mul'ple

259

Key arguments




•  Impossible to turnaround •  No exit routes

Not about turnaround but value enhancers and governance standards by ac8ve partnership

Return in minority vs majority deals in emerging markets

3x

30%

Premium paid for companies with

good governance in EM

260

Key arguments






Trade sale

59

IPO

Secondary

sale

Interna8onal players returning to the market

IPOs in the last five years

S8ll a few years away but solid source in EM

261

Private Equity – a force for good in emerging markets

•  Private sector development ‒  The most efficient method of alloca'ng capital – promo'ng champions

•  Job crea8on in emerging markets

•  Promo8ng ESG values – doing well by doing good!

0%

20%

40%

Less than 20 employees

20 -‐ 100 employees 101 -‐ 300 employees +300 employees

14.7%growth in

jobs

Source: IFC by analysis of 64 funds between 2000 and 2010

262

Griffon Capital Private Equity

1 Why Iran? 2 Why consumer?

4 Why Griffon? 3 Why now?

First consumer driven Iran

fund

263





fund

•  Large middle class

•  Pent-‐up demand

•  Under invested

•  Limited representa'on in capital markets

45m

$8bn capital goods

264


Consumer Services

Consumer Packaged Goods

Distribu8on Retailing / E-‐commerce

Pharmaceu8cals




fund

265





fund

•  JCPOA

•  “Early movers” benefit most

•  Invest in winners at reasonable valua'ons

2x

266





fund

• World class, ins'tu'onal plaeorm

•  Unique team with deep local knowledge and interna8onal experience

•  Access to proprietary deals

Private Equity / Iran

25 September 2015 – Geneva

267

The Base: Unparalleled potential

•  Already in the N-‐11 (Next Eleven) & en route to BRIC •  $35trn of proven hydrocarbon reserves + Turkey GDP $800-‐900bn •  Poten'al to be a $1.5-‐2trn economy •  Real GDP growth of 5-‐10% per annum for next 5-‐10 years

274

The BRIC in waiting

Healthier than perceived

Total Public & Private Debt

(% GDP)

C/A Balance % GDP

Budget Balance % GDP

US 250-275 -2.5 -2.9

UK 350-375 -3.9 -4.5

BRAZIL 150-175 -3.7 -3.8

RUSSIA 50-75 3.3 0.0

TURKEY 100-150 -5.8 -2.6

IRAN 30-60 8 0.0

Sources: Economist, CBI, Bloomberg, IMF, World Bank 275

Power diffused, not central

276

ELECTED INSTITUTIONS APPOINTED BY ELECTED INSTITUTIONS

UNELECTED INSTITUTIONS

SUPREME LEADER

PARLIAMENT

PRESIDENT

ASSEMBLY OF EXPERTS

CABINET

GUARDIAN COUNCIL

EXPEDIENCY COUNCIL

ARMED FORCES

HEAD OF JUDICIARY

ELE

CT

OR

AT

E

Directly Elected Appointed or Approved Vets Candidates

Asributes of Iran

– Large wealth , large popula'on •  (not a Gulf state)

– Power is more diffused than perceived •  (don’t look for it, don’t be scared)

– Young popula'on wan'ng to spend •  (get demography and you will win)

– Private sector wan'ng to grow •  (look for them)

– Government wan'ng to shrink •  (really ! )

– Capital market that is set to grow •  (private equity!)

277

Clusters

– Clusters / strong:

• Weaving and colour and arts •  Petrochemicals (mid stream & downstream) •  Component manufacturing / supply chains •  FMCG buyouts

– Clusters / weak: •  Technology •  Soa-‐infrastructure •  Finance

– Emerged already: consumer non-‐durables (grey markets)

– Emerging: consumer durables and large 'ckets ; experiences

– Fron'er: Infra ; Avia'on ; Hospitality

278

Consumer electronics

279

“Silk-‐Road” (…Version 2515.AIR)

Private Equity – defining it

Any investment into a company to be nurtured outside of the TSE

284

Venture Capital

Growth capital

Buyouts

$$

Life cycle

Venture Capital ... of the tech kind

Cluster theory: “Can you cut tulips best outside of Amsterdam?” “Can you train the best ski team in Saudi Arabia?”

“Can you weave the best Persian carpet in Osaka?” “Can you search for the best Tech start up outside of Silicon Valley?”

(possible versus probable)

285

Venture Capital ... of the rollout kind

New Rollouts: e.g •  Hospitality (Holiday Inn to Marrio_ like) •  Brands in B to C – Migra>on to malls •  Entertainment (Legoland kind) •  Large >cket items where grey markets fail (Earth to Passenger

movers )

287

Economic fabric

289

Iran’s GDP 100% 500

Public (80%)

Quasi (40%) ~ 32%

Direct (60%) ~ 48%

Private (20%) 100

Official (80%) ~ 16%

Underground (20%) ~ 4%

80

More diversified than perceived

290

25.06%

10.86%

10.66%

9.30%

8.57%

7.65%

7.07%

2.96%

2.87%

2.38%

2.23% 2.02%

1.65% 1.28%

0.91%

5.54%

Petrochemicals

Banking and financial intermediaries

Basic metals

Refineries, oil deriva'ves & services

Holding companies

Telecommunica'ons

Mining

Vehicles & Auto parts

Pharmaceu'cals

Cement industry

Investment companies

Engineering companies

Shipping & Logis'cs

Computer & Electronics

Food industries

Other

Buyouts … Exhibit A – Petrochemical

291

Buyouts … Exhibit C – Auto

292

PE Partners & Targets ? …so who with ?

Your IRR will THRIVE

IRR?

Your IRR risks ge�ng hurt

whatever

Cre

dibi

ty a

nd o

utsi

de o

f Ira

n

No

Platform and Credibity in Iran

Yes

No Yes

Thank you

294

DISCLAIMER

IRAN SANCTIONS There are currently extensive international trade and :inancial sanctions in place against Iran as a result of foreign policy commitments by a number of governments and in particular the imposition of US, UK, EU and United Nations sanctions and embargoes. These include notably i) prohibitions on investment in Iranian entities or bodies engaged in the exploration or production of crude oil and natural gas, the re:ining of fuels or the liquefaction of natural gas and prohibitions on any new investment in the petrochemical sector in Iran or in Iranian or Iranian-‐owned enterprises engaged in that industry outside Iran and ii) prohibitions on dealing with designated entities and/or designated persons and iii)prohibitions and/or limitations on transfers of money into and/or from Iran. In particular, the sanctions apply to acts carried out within the US and/or within the EU and to the activities of US entities and nationals (so-‐called United States persons) overseas and/or of EU entities and nationals overseas and to the supply of goods and services directly or indirectly to Iran and to Iranian-‐owned or controlled entities or bodies outside Iran. ANY UNITED STATES PERSON IS BARRED FROM INVESTING IN OR FACILITATING BUSINESS WITH IRAN. THIS PRESENTATION DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER TO BUY, NOR SHALL THERE BE ANY SALE OF SHARES IN ANY JURISDICTION WHERE SOLICITATION OR SALE WOULD BE PROHIBITED UNDER THE CURRENT SANCTION REGIME OR BY LAW PRIOR TO REGISTRATION, QUALIFICATION OR EXEMPTION UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION. IN REVIEWING THIS PRESENTATION, RECIPIENTS MUST RELY ON THEIR OWN EXAMINATION OF THE MERITS AND RISKS INVOLVED. RECIPIENTS ARE NOT TO CONSTRUE THE CONTENTS OF THIS PRESENTATION AS LEGAL, INVESTMENT, OR TAX ADVICE. EACH RECIPIENT SHOULD CONSULT THEIR PERSONAL COUNSEL, ACCOUNTANTS AND OTHER ADVISERS AS TO THE LEGAL, TAX, ECONOMIC AND RELATED ASPECTS OF THE OPPORTUNITY DESCRIBED HEREIN AND AS TO ITS SUITABILITY FOR SUCH RECIPIENT. IF A RECIPIENT INTENDS TO CARRY OUT BUSINESS IN OR INVEST IN IRAN, HE OR SHE SHOULD SEEK INDEPENDENT LEGAL ADVICE TO CONFIRM THE CURRENT STATUS OF THE RELEVANT SANCTIONS REGIMES AND ENSURE THAT HIS OR HER ACTIVITIES DO NOT CONTRAVENE ANY APPLICABLE RESTRICTIONS. THIS PRESENTATION IS INTENDED SOLELY FOR THE USE OF THE PERSON TO WHOM IT HAS BEEN DELIVERED FOR THE PURPOSE OF INFORMATION ONLY AND IS NOT TO BE REPRODUCED OR DISTRIBUTED TO ANY OTHER PERSONS (OTHER THAN PROFESSIONAL ADVISERS OF THE PERSON RECEIVING THIS PRESENTATION).

295

3:25pm - 4:25pm: Investment Banking: Corporate Finance and M&A for New Growth Ø  Rouzbeh Pirouz, Executive Chairman, Turquoise Partners

Ø  Majid Zamani, CEO, Kardan Investment Bank

Ø  Amr Aboushaban, Chairman, Frontier Markets Business Development,

Renaissance Capital

TURQUOISE PARTNERS

2015 A presenta'on to

2nd Europe-‐Iran Forum

Turquoise Partners: Key Developments

Turquoise Partners founded

Turquoise Iran Equities Fund launched (Managing 90% of foreign portfolio investment on the TSE)

Acquisition of 40% of Iran's 2nd largest insurance co (Advisory)

2005

2006

2009

Launch of domestic mutual fund (Top performer in 2014)

2010

Acquisition of Iran Industrial Development Investment Company (Subsequently turned around with a return of 135% to date)

2011

Startup of Sheypour, a leading general classifieds website (Advisory)

2011

Butane Industrial Bond-1st Bond for a private sector company (Advisory)

2012

Co-founded Sarava Pars (Iran's first Tech VC fund)

2012

Iran's first Index-linked ETF (Turquoise TSE-30 ETF) launched

2015

Acquisition of Etebar Investment Company

Acquisition of Firouzeh Asia Brokerage

2010

2015

Our Vision: Since 2006 …. Enable the global community to access the best growth opportuni'es in Iran


•  1st Iranian Investment Firm managed foreign investment flow in Tehran Stock Exchange during tough years of devalua'on, financial crisis and sanc'on.

•  2 Successful “turn around”

priva'za'ons through managing two listed investment companies focusing on strategic, long-‐term value inves'ng.

•  Sources of comprehensive English

language research and in-‐house historic fundamental database on Iranian companies since last 10 years.

Our Story: since 2006 …. Based in Tehran and London with 112 staff

•  We are the only Iranian firm with a track record in mergers and acquisi'ons. We have undertaken advisory assignments and principal transac'ons with our own capital and through our listed private equity investment company, IDIC.

•  In addi'on to the skill sets that would be expected in a Western M&A adviser, we also bring the ability to advise on: •  the prac'cal do-‐ability of the transac'on in a 'mely manner •  the reliability of available financials, which may be opaque •  any hidden legal and regulatory issues that impact the acquisi'on

•  commercial structures that might facilitate a quicker transac'on •  alterna've market entry alterna'ves to an investment •  interfacing with company owners in Iran and managing the nego'a'on process

•  Due to our market leading brokerage and fund management posi'ons, we have access to detailed informa'on and compara've data on many sectors of the Iranian economy.


Turquoise M&A Advisory Experience

Turquoise: Leading interna'onal financial services company


2005:

2006:

2009:

2010: 2010:

2011:

2011:

2012:

2012:

2015: 2015: 2015:

Vision Enable the Global Community to Access the Best Growth Opportuni'es in Iran

Turquoise Partners founded Turquoise Iran Equi'es Fund launched (90% of foreign poreolio investment on the TSE)

Acquisi'on of 40% of Iran's 2nd largest insurance company (advisory)

Launch of domes'c mutual fund Acquisi'on of Firouzeh Asia Brokerage

Acquisi'on of IDIC (a return of 135% to date)

Butane Industrial (First bond issue for a private sector company)

Seeded Sarava Pars (Iran’s first tech VC fund) European fundraising for Sheypoor, the leading classified site in Iran

Launched first TSE Index-‐linked ETF Acquisi'on of Etebar Investment Company

JV with Charlemagne Capital IPO of Lia Manufacturing on Farabourse

2015:

Renaissance capital

THE EEMEA AND FRONTIER INVESTMENT BANK

Celebra;ng 20 years in Emerging and Fron;er markets

RENAISSANCE CAPITAL AT A GLANCE

The EEMEA and Fron'er investment bank 304

London 6 Sales 3 Sales Traders 4 Traders 6 Research Analysts New York

2 Sales 1 Sales Trader

Moscow 4 Sales 1 Deriva;ves Sales 2 Sales Traders 4 Deriva;ves Traders 3 Traders 11 Research Analysts

Lagos 3 Sales 1 Sales Trader 1 Trader 4 Research Analysts

Nairobi 3 Traders

Johannesburg 3 Sales 4 Sales Traders 3 Traders 8 Research Analysts

Dubai 2 Sales 1 Sales Trader 3 Research Analysts

Cape Town 1 Sales 2 Sales Trader 1 Research Analyst

Equi8es Fixed Income Capital Markets Structured Products Mergers & Acquisi8ons (M&A)

•  Equity sales and trading •  Public and privately placed

securi'es

•  Equity research

•  Debt sales and trading •  Local and interna'onal

currency-‐denominated instruments

•  Equity and debt instruments

•  Public placements

•  Private placements

•  Financial restructuring

•  Buybacks

•  Corporate deriva'ves •  Hybrids

•  Share financing

•  Structured debt

•  Advisory •  Takeovers

•  Mergers

Our capabili8es

Our loca8ons

Jan -‐ 2007 Media

SALE OF A 30% STAKE IN MAIL.RU TO NASPERS

Exclusive Financial Advisor

Sep -‐ 2007 Pulp and Paper

JOINT-‐VENTURE WITH INTERNATIONAL PAPER


2006-‐2007 Telecom

TELENOR’S ADVISOR ON RESOLUTION OF CONFLICT WITH ALFA GROUP

Financial Advisor

Mar -‐ 2008 Alcohol

SALE OF CONTROLLING STAKE TO CENTRAL EUROPEAN DISTRIBUTION CORPORATION

Financial Advisor

Nov -‐ 2009 Alcohol

ACQUISITION OF RUSSIAN ALCOHOL BY CEDC AND LION CAPITAL

Financial Advisor

Aug -‐ 2008 Consumer

ACQUISITION OF 75.53% SHARES IN LEBEDYANSKY

Financial Advisor

Jun -‐ 2007 Consumer

SALE OF ROSINKA TO ORANGINA


Nov -‐ 2007 Food Industry

SALE OF 100% OF RUZA CONFECTIONARY FACTORY TO NESTLE


Nov -‐ 1996 Telecom

INITIAL PUBLIC OFFERING US$ 127 million

Joint Lead Manager

Jun -‐ 2000 Telecom


Co-‐Lead Manager

Jun -‐ 2005 Metals & Mining


Bookrunner

Jan -‐ 2005 Telecom

INITIAL PUBLIC OFFERING US$ 1 560 million

Co-‐Lead Manager

Jul -‐ 2006 Oil & Gas


Co-‐Manager

Jan -‐ 2006 Consumer


Sole Bookrunner

Feb -‐ 2007 Telecom


Joint Bookrunner

Apr -‐ 2007 Metals & Minining


Joint Bookrunner

May -‐ 2007 Banking


Joint Bookrunner

May -‐ 2007 Retail


Joint Bookrunner

Nov -‐ 2007 Consumer


Joint Bookrunner

Oct -‐ 2007 Chemicals


Joint Bookrunner

Nov -‐ 2007 Banking


Joint Bookrunner

Jan -‐ 2010 Metals & Mining


Joint Bookrunner

Apr -‐ 2010 Consumer


Joint Coordinator and Bookrunner

Feb -‐ 2011 Oil & Gas


Joint Bookrunner

Apr -‐ 2011 Real Estate


Joint Global Coordinator

Feb -‐ 2011 Metals & Mining


Joint Global Coordinator

Jan -‐ 2012 Oil & Gas


Joint Bookrunner

Dec -‐ 2012 Telecom


Joint Bookrunner

Feb -‐ 2013 Financials


Joint Bookrunner

May -‐ 2012 Payments


Co-‐Manager

Oct -‐ 2013 Financials


Joint Bookrunner

Oct -‐ 2013 Metals & Mining


Joint Bookrunner

Total value of public equity market deals

US$46,085 million

Total number of deals*

73

*Equity Capital Markets and Mergers and Acquisi'on Renaissance Capital deals in Former Soviet Union region 1996-‐2015YTD

LEADING POSITIONS IN EMERGING EUROPE

305

ADVISORY TO

AFRICAN MINERALS

SIERRA LEONE


Mining Jun 2010

BUY SIDE ADVISORY

UGANDA

Sole Financial Advisor

Banking May 2010

SALE BY BSG OF 75% STAKE IN BIC TO FBN

DRC

Banking Oct 2011

Exclusive Financial Advisor to BSG

Sole Arranger

Mining Aug 2011

EQUITY OFFERING

GUINEA

US$ 500 MM INITIAL PUBLIC OFFERING

NIGERIA

Joint Bookrunner

Oil & Gas Apr 2014

RTO

LIBERIA

Oil & Gas Jun 2010

Financial Advisor

Placing Agent

Banking Jul 2010

RIGHTS ISSUE

KENYA

RTO ACQUISITION OF UP TO 87%

SOUTH AFRICA


Mining Apr 2011

EQUITY OFFERING

REPUBLIC OF CONGO

Aug 2011 Mining

Sole Bookrunner

US$ 39 MM INITIAL PUBLIC OFFERING

RWANDA

Banking Aug 2015

Lead transac'on advisor and Sole Bookrunner

STRATEGIC SALE OF THE IINSURANCE COMPANY TO THE ABSA GROUP

MOZAMBIQUE

Sole Advisor

Insurance Sep 2011

EQUITY OFFERING

CAMEROON

Nov 2009 Mining

Sole Bookrunner

ADVISOR TO ESSAR ON PURCHASE OF ZISCO

ZIMBABWE


Mining Apr 2011

ZAR BOND PLACEMENT

BOTSWANA

Banking Dec 2012

Arranger


Banking Mar 2009

BUY SIDE ADVISORY

TANZANIA

Sole Arranger

Telecoms Mar 2010

TREASURY SHARE PLACEMENT

SENEGAL

Financial Advisor

Jun 2013

SALE OF MINORITY STAKE

NIGERIA

ACQUISTION OF OCEANIC BANK

TOGO

Oct 2011 Banking

Buy-‐side Advisor


Telecoms Sep 2011

ADDITIONAL SALE OF 25% OF MTN RWANDA

RWANDA


Telecoms Ongoing

PRIVATISATION

BURUNDI

FOLLOW-‐ON OFFERING

ETHIOPIA

Mining Mar 2012

Joint Bookrunner

Cement

SELL-‐SIDE ADVISORY

ANGOLA

Banking Nov 2013

Sole Financial Advisor to GA Angola Seguros

BUYOUT OF MINORITY SHAREHOLDERS

ZAMBIA


Telecom Mar 2011

ACQUISITION OF ADC BY ATLAS MARA CO-‐NVEST FOR $135 MM

BOSTWANA / NIGERIA

Fairness Opinion to ADC

FIG Mar 2014

*Equity Capital Markets and Mergers and Acquisi'on Renaissance Capital deals in Africa 2009-‐2015YTD

Total value of public equity

market deals US$2,894 million

Total number of deals

33

AFRICA: WE ARE DISCOVERING NEW COUNTRIES FOR INVESTORS

306

Number 2 trader on London Stock Exchange for Global Depository Receipts in 2015 YtD with 9% market share

Number one trader on Nairobi Securi8es Exchange in 2015YtD with 14% market share

Number 2 trader on Nigeria Stock Exchange in 2015YtD with 13% market share

Renaissance Capital won the Investment Bank of the Year award in both 2010 and 2012

Best Investment Bank in Africa, 2010-‐2012

Renaissance Capital African research team placed #1 for Sub-‐Saharan Africa and #2 for South Africa for 2014

#5 ranking in 2015 EEMEA Ins'tu'onal Investor survey, including #1 ranking in Turkey.

*Excluding retail brokers

Number 3* trader on Moscow Stock Exchange in 2015YTD with 10% market share

NUMEROUS ACHIEVEMENTS ACROSS ALL CORE GEOGRAPHIES

307

Market Share Awards and rankings

IRAN IN FRONTIER

308 The emerging markets investment firm

Iran could poten>ally be the second largest country in MSCI Fron>er

Source: MSCI, TSE, Renaissance Capital,

Kuwait 18.3%

Iran 14.1%

Nigeria 12.1%

Argentina 9.4% Pakistan 8.2%

Morocco 6.1%

Oman 4.6%

Kuwait 18.3% Iran 14.1% Nigeria 12.1% Argentina 9.4% Pakistan 8.2% Morocco 6.1% Oman 4.6% Kenya 4.4% Vietnam 3.3% Romania 3.1% Lebanon 3.0% Bangladesh 2.3% Kazakhstan 2.0% Slovenia 1.9% Sri Lanka 1.8% Croatia 1.2% Mauritius 1.1% Bahrain 1.0% Jordan 0.7%

This presenta;on should not be interpreted that Renaissance Capital is encouraging investment dealings prior to applicable economic sanc;ons being liVed, i.e., buying and selling securi;es in Iran. Under U.S. law, “criminal penal;es for viola;ons of the Iranian Transac;ons Regula;ons may result in a fine of up to $1,000,000, and natural persons may be imprisoned for up to 20 years.” Under UK law, criminal penal;es for viola;ng restric;ons on investment in, and certain financial transac;ons with, Iran may carry criminal penal;es including up to 2 years in prison and/or substan;al fines.

IRAN: INVESTMENT CHALLENGES AND OPPORTUNITIES POST-‐SANCTIONS


Challenges -‐  Custody -‐  Liquidity -‐  Foreign ownership – limited float available

-‐  Oncoming supply of equity

Opportuni8es -‐  Demographics – c. 80mn popula'on

-‐  Under-‐equi'zed economy -‐  First mover advantage -‐  Diversified export base

Renaissance Capital has visited Iran 10 ;mes in the past 18 months, educa;ng 25 major interna;onal financial ins;tu;ons on the region represen;ng a total of approximately $5tn in AuM


DISCLAIMER



INVESTMENT BANKING INDUSTRY THE IRAN STORY

MAJID ZAMANI

$250m Assets under management

$70m Underwri'ng of debt and equity

25 Private Poreolios 2 Market making of fixed income securi'es

3 Top performing mutual Funds

4 Corporate finance ac've advisory mandates

12 successful venture capital deals advised

ABOUT KARDAN

$500m Capital of 9 investment banks

$2b Corporate debt on Farabourse

270 Financial ins'tu'ons regulated by SEO

$88b Market capitaliza'on

8-‐10% Trading volume as % of GDP

A MARKET IN THE MAKING

%

ECONOMICS MARKETS COST OF DEBT BALANCE SHEETS

PRIVATIZATION & RE-‐PRIVATIZATION

M&A DRIVERS

Oil Refinery

Oil Upstream

Gas

Renewable

Petrochemical

Power

Metal & Mine

Road

Rail

Legend

1 Proj.

4 Proj.

9 Proj. $13Bn

9 Proj $6.5Bn

1 Proj.

1 Proj.

1 Proj.

1 Proj.

8 NGL Proj. 1 upst Proj.

1 Proj.

2 Proj. $2.3Bn

1 Proj. $0.9Bn 1 Proj.

$1.9Bn 6 Proj. $ 11.6Bn

1 Proj.

2 Proj. $.2Bn

1 Proj. 2 Proj. $.17Bn

2 Proj. $.9Bn

1 Proj. $.3Bn

3 Proj. $.1Bn

2 Proj. $.9Bn

3 Proj. $.1Bn

1 Proj.

2 Proj.

2 Proj.

4 Proj. $.1Bn

2 Proj.

1 Proj.

2 Proj. $2.7Bn

1 Proj.

2 Proj. $.1Bn

3 Proj. $.8Bn

4 Proj. $2.1Bn

3 Proj. $.1Bn

2 Proj. $.8Bn

1 Proj. $.3Bn

2 Pj.

1 Pj.

2 Pj.

1 Pj.

1 Pj.

2 Pj.

2 Pj.

1 Pj.

1 Pj.

2 Pj.

1 Pj.

2 Pj.

2 Pj.

1 Pj.

3 Pj.

1 Pj.

1 Pj.

1 Pj.

1 Pj.

1 Pj.

1 Pj.

1 Pj.

1 Pj.

1 Pj.

1 Pj.

2 Pj.

1 Pj.

2 Pj.

1 Pj.

Energy

$160 Billion

10 year capex poten'al

1 proj. $1.9 Bn

2 proj. $1 Bn

1 proj. $1.4 Bn

1 proj. $1.4 Bn

3 proj. $4 Bn

1 proj. $1.4 Bn

1 proj. $1 Bn

1 proj. $2.5 Bn

4 proj. $2.9 Bn

5 proj. $2.7 Bn

1 proj. $1.9 Bn

9 proj. $10.8 Bn

1 Pj. $ .4 Bn

3 Pj. $ .9 Bn

2 Pj. $ 1.5 Bn

1 Pj. $ .9 Bn

4 Pj. $ 1.2 Bn

7 Proj. $ 3.7 Bn

3 Pj. $ 1.1 Bn

2 Pj. $ 1 Bn

1 Pj. $ .1 Bn

1 Pj. $ .4 Bn

1 Pj. $ .4 Bn

2 Pj. $ .6 Bn

Commodi'es

$58 Billion


645 Km

540 Km

399 Km

264 Km

635 Km

369 Km

339 Km

200 Km 183 Km

150 Km

1330 Km

440 Km

345 Km

103 Km

175 Km

399 Km

260 Km

183 Km

470 Km 544 Km

160 Km

330 Km

85 Km

469 Km

800 Km

322 Km

Transporta'on

$25 Billion


316

RISK RETURN PROFILE RISK

RETURN

5% to 18%

15% to 20%

18% to 25%

25% to X%

INFRASTRUCTURE

LARGE CAP

MID CAP

HIGH GROWTH VENTURE

SYSTEMIC RISK

Corporate culture

Corporate governance

Research Due diligence fine details

Talent

Financing

WHAT TO LOOK OUT FOR

Kardan Investment Bank 4 Rahimi Street, Africa Blvd, Tehran 1967916973, Iran T: +98(0)21 2620 2209 F: +98(0)21 2620 2247 www.kardan.ir

4:40pm - 5:40pm: Project Finance: Working Capital, Industrial and Infrastructure Investment in Iran

Ø  Philippe Delleur, President, Alstom International

Ø  Paul van Son, MENAT Country Chairman, RWE

Ø  Nicholas M. Gilani, Senior Partner, Arjan Capital

25th September, 2015

ALSTOM Philippe Delleur – SVP International Network

2nd Europe-Iran Forum – Geneva

“Working Capital: Project Finance, Industrial and Infrastructure Investment in Iran”

1.  Alstom activities

2.  Alstom experience in Iranian infrastructure projects

3.  Huge needs in Rail & Urban infrastructure projects

4.  Constraints for financing Public Transport projects

5.  Regulatory & financial climate needs

Project Finance, Industrial and Infrastructure Investment

Power generation infrastructure Alstom supplies major equipment for 25%

of the worldwide installed power generation

capacity

Power transmission infrastructure Alstom equips more than 90%

of power utilities worldwide Alstom holds 25% of

hydro electricity market

Rail transport infrastructure A major player on all the

rail market segments

Alstom Group : three main activities, a global leader

Alstom Transport: A global leader in the rail industry

Four activities TRAINS SYSTEMS*

SERVICES SIGNALLING

*Including Infrastructure

1970 1950 2014 2000 2010 1990 1928

Transport :100 years of technological breakthroughs…

§  2007 TGV 4402 sets new world record at 574.8 km/h

§  1955 CC7107 sets a new world record at 331 km/h

§  2003 First Citadis tramway with APS system delivered in Bordeaux

§  2008 AGV, the latest very high-speed train

§  1949 CC series with two locomotive prototypes, Alsthom Belfort consequently enters the age of high-speed rail

§  2013 Axonis, full in-house Integrated offering including civil work

Urbalis Fluence, the innovative signalling solution with direct train to train communication

§  2003 World’s first radio CBTC for northern line in Singapore

§  1978 First delivered TGV Atlantique to SNCF

§  1990 Setting a new world record at 515 km/h

§  1971 First TGV electric prototype, the Z7001.

From a focus on power and speed…

… to an emphasis on innovation, environment and passenger experience

§  2014 Citadis X05 launched – the latest tramway evolution HealthHub – the new predictive maintenance solution

§  2014 The 1st catenaryless tramway system in the world started commercial service in Dubai


Alstom experience in Iranian infrastructure projects •  In Iran, Alstom’s electrical power generation, electrical transmission and rail

transport activities have served infrastructure projects for the civilian population for more than 40 years.

•  Alstom provides equipment and services for the power generation, electrical transmission and rail transport activities, fully respecting international rules regarding economic relations with Iran.

•  Alstom maintains an office in Teheran since 1971. •  References:

–  Hydro– Iran Water & Power Distribution Co: equipment for Karun IV, Upper Gotvand and Seymareh power plants

–  Grid - Teheran Regional Electric Company : High Voltage substation's, switchgear

–  Transport – Iranian Islamic Republic Railways -100 locomotives –  Thermal Power – Hormozgan Power Plant


Huge needs in Rail & Urban infrastructure projects

•  In February 2014, Iranian Foreign Investment Office identified 12 projects in Infrastructure & Transportation for a total Investment of 6,6 Billion Euros

•  For rail & urban transportation several opportunities: –  Locomotives : Teheran / Mashad electrical line –  Very High Speed lines : Teheran / Isphahan –  Regional trains –  Tramway systems for medium sized cities –  Teheran metro expansion (systems, signaling & cars)

•  Public transport lowers the overall mobility costs in metropolises. •  But public transport is not profitable. •  Public transport in most of the cases will need public subsidies relying on

state budget. •  Considering these constraints the following financing instruments (without

recourse on Alstom) can be envisaged: •  Trade Payment Securities with or without deferred payments •  IFI’s financing including development agencies, such as Islamic

Development Bank, KFAED, AFESD... •  Buyer’s Credit with the support of Export Credit Agencies relying on

sovereign guarantees •  Private financing through PPP-schemes •  Other private financing involving commercial banks (leasing, islamic

financing,...) •  Depending on the project these sources may vary and be mixed. Financing is always tailored for the country, the project and the customer

Constraints for Financing Public Transport Projects

2012 Dubai LRT 675Musd

Buyer’s Credit / Islamic Financing

Alstom references in export financing arrangement

2010 Morocco -‐ Casa LRT 115 MEU

Soa loans + Coface Buyer’s Credit

2010 Tunis LRT 58 MEU


2010 Morocco LGV 350 MEU


2013 Turkey Metro 150 MEU Coface Buyer’s Credit

2011 Kazakhstan Loco 768 MEU

Coface Buyer’s Credit

2012 Venezuela -‐ Los Teques Metro 325 MEU

Coface Buyer’s Credit + pull of Banks

2014 Chile San'ago Metro 550M USD

2 Buyers credit

2012 Panama Metro 406M USD

CESCE Buyer’s Credit

2000 Iran 100 Locos 190 MEU

Coface Ducoire Buyer’s Credit

2006 Reims LRT

34 years PPP

1991 Rouen LRT Ph 1&2

30 years PPP

2000 Barcelona Trambaix

LRT 28 years PPP

2002 Barcelona Trambesos

LRT 28 years PPP

2012 Nîmes-Montpellier HSL 25 years PPP

2012 Alicante-Albacete

HSL 20 years PPP

1989 Manchester LRT Ph1

15 years PPP 1994

Arlanda airport link 45 years PPP

2005 Milano Metro L5

32 years PPP

2011 Milano Metro L5 ext

26 years PPP

2011 Nottingham LRT L2

25 years PPP

2005 Firenze LRT L2 & L3

30 years PPP

2014 Sydney LRT

30 years PPP

2013 Osawa LRT

30 years PPP

2006 Parla LRT

30 years PPP

2006 Murcia LRT

30 years PPP

2014 Manila LRT

30 years PPP

2013 Rio LRT

30 years PPP

Sub Contractor EPC Contractor SPC Investor

Alstom position:

Alstom references in PPP

Project Finance, Industrial and Infrastructure Investment in Iran

Regulatory & financial climate needs

•  Long term State budget planning and reliable public financial commitments (MOF/CBI)

•  Stable Investment & trade regulation framework •  Taxes: Tax treaties for financial instruments •  Clearance of international banking relationship for Iranian banks :

–  Keshavarzi, Saman, Parsian, Pasargad, Karafarin... –  Melli, Mellat, Saderat, Sepah, Tejarat..

•  Availability of international secured means of payments (L/C – SBLC) & Bank guarantees ( performance bonds, advance payment bonds)

•  Stable foreign exchange regulation & market depth •  Availability of Export Credit Insurance with large and long term

commitment's.

www.alstom.com

Alstom Power: present in all markets

NUCLEAR (conven'onal island)

OIL COAL GAS

SOLAR

WIND (offshore and onshore)

GEOTHERMAL

HYDRO

BIOMASS

TIDAL

...for new plants or the installed base

Products Solu'ons Services

Air Insulated Switchgears

Gas Insulated Switchgears

Power Transformers Field services

Asset management optimisation

Electrical substations, Turnkey solutions

& Services

Super Grid technologies

Smart Grid technologies

Network Management

Solutions

Substation Automation Solutions

Power Electronics

Power Electronics & Automa'on

Alstom Grid: comprehensive solutions and products

RWE Information and Statements for the Iran-

Europe Forum, Sept. 24/25th, Geneva

www.rwe.com www.desertenergy.org

RWE is a high quality, leading integrated energy company in Europe, with growth ambi8ons in the greater MENA region

RWE Core Markets1

1 Without world-‐wide trading, consul'ng and upstream oil & gas businesses 2 Market posi'ons of the RWE Group in terms of sales

Leading Posi8ons in Core Markets

Product Market2

RWE markets with established market posi'ons

Addi'onal established markets for renewables

MENA&Turkey emerging markets

European growth markets

Electricity Gas

Germany No. 1 No. 3

UK No. 3 No. 4

Netherlands No. 1 No. 2

Central Eastern and South Eastern Europe

>  No. 2 in Hungary

>  No. 3 in Slovakia

>  No. 5 in Poland

>  No. 5 in the Czech Republic

>  Presence in Croa'a

>  No. 1 in the Czech Republic

>  No. 2 in Slovakia

>  Leading posi'on in Hungary

>  Presence in Croa'a

MENA etc

>  Presence in Turkey

>  Presence in the Gulf

>  Consul'ng in Iran

Total Europe No. 3 No. 5

RWE has grown in the last 117 years from a local power producer to a leading European energy company with extensions in MENA

Establishment of Rheinisch-‐Weseälisches Elektrizitätswerk Ak'engesellschaa (RWE) in Essen, Germany as power producer (steam turbines)

1898

1914

Inaugura'on of RWE’s power sta'on ‘Vorgebirgszentrale’, with 190 MW the largest lignite power plant in Europe

1924

Construc'on of the first trans-‐German transmission grid (220 kV)

1962

RWE builds Germany's first commercial nuclear reactor

1964

RWE's Frimmersdorf lignite power plant is the world's largest thermal power plant with 2,000 MW capacity

2002-‐2010

Regional expansion to the United Kingdom, the Netherlands, the Czech Republic and the Slovak Republic by acquisi'ons

Establishment of RWE Innogy to grow renewables ac'vi'es

2008

1999

Establishment of RWE Energy Trading Ltd in London to trade electricity as well as with power sources such as coal, oil and gas

2015

Commissioning of one of the first offshore wind farms in the German Sea with an installed capacity of 295 MW

Power Genera8on Energy Trading / Gas Midstream

Electricity and Gas Networks / Sales

Genera8on Capacity [GW]

§  Renewables 4

§  Lignite 11

§  Hard coal 10

§  Nuclear 4

§  Gas/Other 20

§  Total 49

Revenues EBITDA Workforce

app. 59 bn USD app. 9 bn USD App. 60,000

Trading Volumes

§  Power: 1,501 TWh

§  Gas: 393 bcm

§  Oil: 1598 MMbbl

§  Coal: 735 MM t

§  CO2 : 685 million cer'ficates

Networks

§  Power: 410,000 km

§  Gas: 90,000 km

§  Water: 9,000 km

Retail Customers

§  Power: 16 million

§  Gas: 7 million

§  Water: 9 million

2014 figures, rounded

RWE successfully operates along the energy value chain genera8ng external revenues of about USD 59 billion annually

Mission:

Invest in core energy businesses in MENA thereby leveraging RWE’s investment experience, opera'onal exper'se and innova'on capabili'es

Ownership: 100% RWE;

Established: End 2014 in Dubai

RWE New Energy Ltd

1 Dubai Electricity and Water Authority; government-‐owned electricity and water supplier in Dubai

RWE has established a foothold in the Middle East, North Africa and Turkey

Dubai

Istanbul

Mission:

Leverage RWE’s and DEWA’s1 unique management, commercial and technical experience in consul'ng projects for clients in MENA

Ownership: Joint Venture; 51% DEWA, 49% RWE

Established: End 2012 in Dubai

RWE Power Interna8onal Middle East

Mission:

Downstream sales business serving the needs of different customer groups (e.g. key accounts, mass market)

Ownership: 100% RWE

Established: End 2011 in Istanbul

RWE Turkey Sales

Denizli

Mission:

Construc'on and opera'on of 775 MW natural gas fired CCGT power plant in Denizli to meet the increasing Turkish power demand

Ownership: Joint Venture; 70% RWE, 30% Turcas

Commercial Opera8on: Aug 2013

RWE & TURCAS Güney Elektrik Üre8m (RTG)

Countries with RWE offices

RWE is a Lead Partner in Dii / Supporters of Desert Energy, Dubai

RWE delivers unique prac8ce based consul8ng services

STRATEGY CONSULTANCIES

2nd TIER ADVISORY AND CONSULTING

FIRMS

ENGINEERING CONSULTANCIES

Low High

High

OPERATIONAL & TECHNICAL

>  STRATEGY >  INNOVATION >  VENTURES

STRATEGIC, OPERATIONAL & TECHNICAL EXPERTISE

CONSULTING SERVICES FROM A GLOBAL ENERGY LEADER

>  Leading global energy trading house >  Europe’s largest trading floor

TRADING

>  Own & operate 52 GW of power genera'on >  Leading investor in Renewables

GENERATION

>  Germany’s longest distribu'on grid operator >  Frontrunner in Smart Grid technologies

GRID

>  16 million customer base >  Pioneer in e-‐mobility & energy efficiency

DISTRIBUTION

STRA

TEGICAL

& CONCE

PTUAL

>  Leading Partner in Dii / Supporters od Desert Energy, crea'ng condi'ons ffor renewables in the deserts

>  E-‐Mobility pioneer

Other

We offer consul8ng services along the en8re energy value chain combining our leading exper8se from three prac8ces

RWE Middle East Consul8ng Prac8ces

3 1 2

Strategy and Transforma'on

Innova8on and Technology

Ventures and Corporate Finance

>  Strategy Development and Implementa'on

>  Regulatory Framework and Market Design

>  Transforma'on and Reorganisa'on

>  Change Management >  Business Process

(Re-‐)Engineering >  Performance Improvement >  Leadership and Management

Training

>  Innova'on Management >  Smart Technologies >  Renewables >  Energy Efficiency and Demand

Side Management >  Project Development and

Basic Design Studies >  Supply Chain Management >  Construc'on & Commissioning >  Opera'ons & Maintenance

Support and op'miza'on >  Quality Management and HS&E >  Life'me Extension / Retrofit

>  Venture Management >  Due Diligence (strategic,

technical, financial) >  Investment Appraisal

and Decision Support >  IPP and Project Finance

management >  Risk Management >  Poreolio Op'misa'on >  Business Restructuring and

cost cu�ng

Upstream Power Genera8on

Energy Trading/ Wholesale Market Grid Retail + E-‐Mobility

& Smart Home

RWE Technology Interna8onal -‐ The Engineering Division of RWE

Recruitment services n  Role specifica8on n  Organisa8on mapping n  Recruitment support n  Career management n  Succession planning

Grid Services n  Strategy and planning n  HV systems support n  Networks support & engineering n  HV protec8on systems n  Integra8on of renewable energy

End of life strategies n  Decommissioning support n  Mothballing & Preserva8on n  Disposal of strategic assets n  Demoli8on management n  Remedia8on studies

Renewables n  Onshore & Offshore wind n  Hydro Genera8on n  Biomass combus8on services n  Plant conversion for biomass use n  Solar & PV Systems

Mining n  Con8nuous mining techniques n  Feasibility studies n  Geotechnical surveys n  Opera8onal advice n  O&M Services via JV Co.

Through Life Support n  Refurbishment & life extension n  O&M Support Services n  Engineering strategy n  Risk management services n  Business op8misa8on

New Build n  Construc8on management n  Commissioning support n  O&M Mobilisa8on support n  Asset integrity management n  Documenta8on services

Plant Engineering n  Combus8on engineering n  Rota8ng plant services n  HV Electrical & Protec8on n  Control Engineering n  Forensic analysis

Learning & Development n  Training needs analysis n  Classroom training n  Simulator training n  Opera8onal site based training n  Management team development

Providing a full spectrum of consultancy services to the energy sector

Opera8on & Maintenance Services

Full lifecycle support for Owners and Operators

Mobilisa8on n  Roles & responsibility defini8on n  Time & process management n  Op8mal usage of construc8on n  Planning and defini8on n  Execu8on support

Contrac8ng Strategies n  Specifica8on n  Procurement strategy n  Contract op8misa8on n  Warranty management n  Claims processes

Construc8on Support n  Feasibility studies for new build n  Quality management n  Site safety n  Contractor management n  Commissioning & takeover

In the last 10 years, RWE has built and financed over 2 GW of renewable and over 12 GW of conventional power plants

1 Concentrated Solar Power

Type Capa-city Examples 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Wind 2 GW

Gwynt y Môr (Offshore, 576 MW)

Novar Extension (Onshore, 37 MW)

Solar 0,1 GW

Andasol 3 (CSP1, 50 MW, 13%)

PV Power Plants (50MW)

Biomass 70 MW Markinch (Biomass CHP, 45 MWe, 88 MWth)

Coal / Lignite 5 GW

Hamm (Hard coal, 1,528 MW)

BoA 2&3, Neurath (Lignite, 2,100 MW)

CCGT 7 GW

Pembroke (Gas, 2,188 MW)

Claus C (Gas, 1,304 MW)

Upstream Power Genera8on Energy Trading / Gas Midstream Networks / Sales

Overview of RWE’s Supply and Trading Business

RWE’s Trading Volumes 2014

Power 1,501 terawas hours

Gas 393 billion cubic metres

Coal 735 million metric tonnes

Oil 1,598 million barrels

CO2 cer8ficates 685 million

Solid biofuels 13 million tonnes

RWE’s trading headquarters in Essen, Germany, hosts Europe’s largest energy trading floor, complemented by addi'onal trading floors and branch offices around the world

RWE is one of the leading European energy traders with offices worldwide

Upstream Power Genera8on Energy Trading / Gas Midstream Networks / Sales

Statements for the Forum Discussion •  RWE is open for coopera'on for Co-‐opera8on 1) with partners in Iran, delivering high quality

energy consul'ng and services and developing (renewable) energy projects •  Common Objec8ves of Energy Transi8on Europe – Iran is a strong basis for co-‐opera'on:

–  Phased decarboniza'on –  Electrifica'on based on renewable energy and natural gas –  Capturing synergies through interconnnected grids, decentraliza'on and pro-‐ac've role

of (smart) demand –  Digi'za'on of the business along the value chain, intensive interac'on with customers

•  Restructuring the energy industry –  Integra'on of renewables i.e. interac'on with gas –  How to make renewable energy investments and energy efficiency feasible? –  How to create an asrac've long term investment climate?

•  RWE has started in Iran with Aria Jam Energy Ltd in Karaj on consul'ng and engineering for a gas unit. RWE is open for further projects of this kind which may end in long term partnerships in future!

1) under the precondi'on that it meets its obliga'ons from the agreement reached on 14 July 2015 in Vienna on the Iranian nuclear issue

INDUSTRIAL | FINANCIAL | LEGAL

The Waste-to-Energy Case Study: How to Identify & Mitigate Project Risks

2nd Europe-Iran Forum Geneva, September 2015

351 351

Iran – the World’s Last Remaining Major Emerging Economy

Project Risks

! Credit risk (the Public Sponsor)

! Technology risk (the Waste-to-Energy system)

! Construction & installation risk (construction in Switzerland, installation in Iran)

! Inflation risk

! Exchange risk (did not apply in the presented case, might however in a BOO/BOT alternative)

! Regulatory risk (Iranian Sovereign Guarantees can (yet) not be accepted by Western Banks, only local banks can)

! Environmental risk (Equator Principles)

352 352

Case Study

! S-GE, Swiss Global Enterprise, the Swiss Government Export agency requested Arjan Capital to advise a leading mid-size Swiss manufacturer and solutions provider of clean energy (the “Contractor”) in executing a signed sale to Iran

! Transaction--The sale and installation of a turn-key waste-to-gas power generation

system to an Iranian provincial government ! Contract—was formally signed ! Payments--to be made in installments (transaction size: about Euros 65 million) ! The Swiss exporter had been informally advised by more a European “middle man” Misunderstandings ! The seller understood that the buyer has funds available and needed advice in

handling the sale ! The Iranian Province understood that financing is arranged by the Swiss seller (in

essence, 100% vendor and/or bank financing)

353 353

Bringing Sanity Back

! Significant lack of communication between the exporter and the Iranian Provincial Authority

! Communication that should have been provided by the European middle man

! Fleshing out the deal parameters (drill to the ground the transaction on both sides, buyer and seller)

! The Iranian buyer had (wrongly) believed that the Swiss exporter had financing pre-arranged; (the middle man feigning ignorance throughout)Highlighting the Project’s risks to the seller

! Bringing about the involvement of Iranian Central Government and the OIETAI

! Ensuring that the Sovereign Guarantee of CBI could be available and be used legally

! Offering alternative private sector financing as an alternative to “international funding” not yet available

354 354

Take Home Value

! Iran is a highly remunerative market ! Appreciate unique country-specific traits that elude foreign investors who enter it for the first time

! Ensure that “politeness” does not get in the way of structuring the right deal with risk parameters clearly defined and mitigated

! Ensure that in EVERY project, the sponsor/seller has “skin in the game”, meaning equity

participation (100% financing high hurdle..)

! When involved in project financing projects: ! Identify and highlight project risks to the international client on a timely basis before enthusiasm

overwhelms him

! Ensure that the foreign client gets unbiased and objective legal and implementation advice

! Ensure to mitigate risks by seeking out appropriate guarantees; ! Iranians are very familiar with “guarantees”; that is how they comport themselves in daily

business

! Avoid the middle man.. 355 355

[email protected] Finance, Industry & Trade •  Nicholas M. Gilani [email protected] +971 50 342 34 30 •  Andreas Schweitzer [email protected] +41 79 211 65 60 Legal

•  Dr Haleh Akhlaghi [email protected] +971 50 455 8033

•  Dr. Adib T. Tohme [email protected] +961 337 99 09

356

Contact

5:40pm - 6:00pm: Closing Keynote: Responsibilities and Strategies for Post-Sanctions Investment and Development, With a Look to Monetary Policy Ø  Gholamali Kamyab, Vice Governor, Central Bank of The Islamic

Republic of Iran

The CBI's Strategies for investment and development

in post-‐sanc8ons

G. Kamyab Vice Governor

September, 2015

359

•  Poten8als of Iran’s Economy •  General Economic Policies •  Recent Improvements in Economic Condi8on •  A Prospec8ve of the CBI Policies •  AUrac8ons for Foreign Investors

Outlook

360

•  Big market (18th in GDP on PPP basis) •  Abundant factors of produc8on

o Young and educated popula8on; o Well established infrastructures; o Natural resources (1st in natural gas, 4th in crude oil and 10th in non-‐oil mining reserves);

o Diversity in climate and ethnic; •  High interna8onal reserves posi8on and low external debt; •  Geopoli8cal and regional advantages;

Poten'als of Iran’s Economy

361

•  Improving the interna8onal rela8ons; •  Improvement in the business environment; •  Fiscal discipline; •  General review of monetary policy and the ensuing

credibility in the market; •  Commitment to one-‐digit infla8on; •  Stabiliza8on of foreign exchange market; •  Targe8ng 8 percent growth rate;

General Economic Policies

362

•  Reform in money market o  Improving banks’ balance sheet; o Priority for working capital of produc8ve enterprises; o Removal of credit restric8ons and support of equilibrium interest rates in the money market;

o AUempts to reduce banks NPLs; o Widening the scope of the CBI supervision;

•  Pave way towards exchange rate unifica8on; •  Trade rela8ons and par8cipa8on of interna8onal investors.

The CBI’s Policies

363

•  Unu8lized produc8on capacity due to shortage of financing and recessionary drag;

•  Readiness to issue license for foreign banks to improve compe88on in money market;

•  New approach on fiscal and monetary discipline and beUer macroeconomic management;

•  Targe8ng 8 percent growth during the course of the 6th FYSP;

Opportuni'es

364

Investment in Iran AWer Sanc8ons

Presenta8on by the Vice Governor of the Central Bank of the Islamic Republic Of Iran

365

Introduc'on

•  With the successful signing of the Joint Comprehensive Plan of Ac'on -‐ Iran’s aim will be to: –  modernize its exis'ng industrial sectors; –  upgrade its infrastructure; and –  efficiently u'lize its resources and capaci'es.

•  To accomplish this – Iran needs huge amounts of investment. •  The es'mate for FDI and other investments is close to $600

billion for the next 10 years. •  With the oil and gas sector alone needing an es'mate of

$300bn to upgrade, expand and produce.

366

Growth area

•  Iran is a na'on approaching 100 million highly educated consumers in the next 10 years.

•  This is a massive consumer market in itself and more importantly investors should view Iran as a stable and affordable technical labour market for manufacturing‎ and EXPORT to its regional neighbors.

367

Overview

Key industrial sectors requiring investment: 1.  Energy, Petrochemical & Power Sectors 2.  Mining, Commodi'es & Industry 3.  Infrastructure 4.  Agriculture 5.  Fast Moving Consumer Goods 6.  Free Zone, Finance & Capital Markets 7.  Hospitality and service industry

368

1. The Energy, Petrochemical and Power Sectors

•  Major investments are required in the following sectors:

• Oil & Gas sector; • Petrochemical sector; •  Expanding the export sector; and • Power sector.

369

Oil, Gas & Petrochemical

•  New contractual framework created to asract investors (IPC Integrated Petroleum Contract)

•  We encourage poten'al economic operators in this sector to contact our relevant agencies to obtain a priority lis'ng of the investment required under this sector

370

Power

•  The Power genera'ng sector is currently one of the most successful domes'c industries

•  However it is energy inefficient •  Investment will increase efficiency within the domes'c sector

•  Huge poten'al for electricity exports

371

2. Mining, Commodi'es & Industry

This includes an overview of the following sectors:

• Mining sector; • Cement industry; •  Steel industry; and • Car industry.

372

Mining sector

•  Major investment is needed in the development of the mining industry

•  There are a number of priority projects already announced by relevant authori'es.

•  We encourage poten'al economic operators in this sector to contact our relevant agencies to obtain a priority lis'ng of the investment required under this sector

373

Cement & Steel

•  There are huge growth opportuni'es in the following energy-‐intensive industries -‐ given Iran’s current posi'on

•  Cement: Currently the world’s 15th largest cement producer

•  Steel: Producing 15% more steel than the United Kingdom

and an equal amount of steel as France

374

Automobile sector

•  Currently the largest producer of automobiles in the Middle East – 1.13 million cars produced in 2014

•  However has to modernize and respond to the demands of the domes'c market

•  Increase exis'ng capaci'es

375

3. Infrastructure


•  Telecommunica'ons; •  Transport – Avia'on, Train & Metro; and •  Ports.

376

Telecommunica'ons sector

•  Currently a mobile phone usage of about 130 million subscribers

•  Smartphone users have jumped to 40 million people in the last year, with the launch of 3G & 4G

•  With 40% of the popula'on between 12 -‐ 32 years old – there is room for greater data & even more growth

•  Great need for both IT and telecom solu'ons •  Great digital and data opportuni'es

377

Transport Infrastructure

•  Development needed in Air and other transport sectors

•  Air: Domes'c air travel has been held back due to the lack of aircraas –  400 more airplanes are needed in the next 10 years

•  Metro: investment needed to expand the metro and inter-‐city transport op'ons

•  Train: investment needed for the en're countries rail networks

378

Ports

•  Ports require moderniza'on •  Port require expansion in the capacity they can handle – to correspond with other development/ investment in the country.

379

4. Agriculture

•  Revitaliza'on and moderniza'on of Iran's agricultural industry

•  Investment and development are needed for a new concept for food security

•  This is a huge area of growth that will asract direct foreign investment and joint ventures

380

5. Consumer Goods

•  This includes an overview of the following consumer sectors:

•  Fast moving consumer goods; and • Pharmaceu'cals industry.

381

Consumer Goods sector

•  With a popula'on of over 78 million, the country has been effec'vely cut off from global trade for decades

•  In spite of this there is a huge amount of brand loyalty for foreign goods

382

Fast moving Consumer Goods

•  Investment needed in the following sectors: •  Food; • Personal electronics; and • Packaged goods.

383

Pharmaceu'cal sector

•  Currently a large domes'c and regional market

•  Investment needed:

–  to upgrade exis'ng capaci'es; and –  for new medicines

384

6. Free Zone & Finance


•  Free Zones; and •  Finance and Capital Markets.

385

Free Zones

•  Free Zones are one of the first places that investors can securely invest their capital

•  They offer investors protec'on and legal government backing

386

Finance & Capital Markets

•  Finance and Capital Markets provide a great growth sector

•  Capital Markets are greatly underdeveloped •  Currently the stock market trades over $70m per day with a market cap to GDP of $80 billion

387

7. Hospitality and service industry

•  Iran is one of the world’s most culturally rich countries, with 19 World Heritage Sites

•  Great investment is needed in the public rela'ons aspect of tourism and in the hospitality sector

•  There are not enough hotel beds to meet the current demand, let alone a surge in tourists/ corporate visitors

•  Currently no “brand” hotels in the country

388

2nd europe-iran forum presentations

Documents