general overview on idb financing ... - aicep portugal global · lisbon, portugal november 10, 2014...

Lisbon, Portugal

November 10, 2014

General Overview on IDB financing Opportunities for Private Sector Projects

How does the IDB engage with the private sector?

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Non-financial support to enable firms to do business in LAC: ConnectAmericas

Developing partnerships

Financing private investments in LAC

Informing about procurement opportunities of IDB financed projects

Why consider Latin America & Caribbean

Unprecedented overall macro and political stability.

Growing private consumption with emerging middle class.

Vast natural assets.

Strong investment needs (e.g. infrastructure for better logistics requires 5,2% of

GDP per year).

Transformative industries in need of more sustainable supply chains.

Technological innovation for green growth.

European know-how can help addressing these needs creating a win-win.

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Why we support the private sector

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A healthy private sector is essential for economic development and poverty reduction.

Generates 90% of our region’s employment.

Drives innovation and sustainability.

Provides knowledge transfer and capacity building.

Increases productivity.

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Who we work with in the private sector

Companies Micro, small and medium enterprises (MSMEs) Large corporates Special purpose vehicles State-owned enterprises

Financial intermediaries International and local banks Investment funds Microfinance institutions

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Conditions under which the IDB can support private sector projects

• The project will contribute to addressing some of the region’s sustainable development needs

• IDB complements (never substitutes) commercial banks, only when private sources of financing insufficient for specific project

• Support is needed to invest in innovative solutions

• Special technical skills are required:

– Potential social or environment impact that should be addressed with help from a partner with expertise in those fields

– Need some technical assistance to get project started in LAC

IDB supports only private sector projects that bring specific additional value to development

How does the IDB work with the private sector

• Market-based prices

• Longer tenors

• High environmental, labor, ethical and health requirements and standards

• IDB seeks to act as a catalyst to leverage additional funding sources

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What sectors do we work on?

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IDB supports the private sector through its four windows

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Structured and Corporate Finance Department (SCF)

Inter-American Investment Corporation (IIC)

Multilateral Investment Fund (MIF)

Opportunities for the Majority Initiative (OMJ)

Medium and large scale private sector sustainable investments

SMEs Business models that serve the Base of the Pyramid

Access to finance, markets and basic services

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IDB supports the private sector in a segmented way through four windows

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Medium and large scale investments

SMEs Business models that serve the Base of the Pyramid

Access to finance, markets and basic services

Contact:

[email protected] Application-online :

http://www.iadb.org/en/structured-and-corporate-finance/resources-for-clients,7580.html

Contact:

[email protected] Send Application to: [email protected]

Contact:

[email protected] Send Application to: [email protected]

Contact:

[email protected] Application-online: http://www.fomin.org/Login.aspx?ReturnUrl=%2fapps%2foap%2fuseroap.aspx?lang=SP

Tickets: US$10 – 200M Tickets: US$100k – 40M Tickets: US$100k– 5M

Europe Office: [email protected]

Tickets: US$5 – 10M


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• Medium and large scale private sector sustainable investments

• 10M$ to 200M$

• Loans (syndicated and parallel)

• Project finance and public private partnerships

• Partial credit guarantees and Political risk guarantees

• Support of international trade

• Technical Cooperation

• Climate change concessional finance

• Clean Energy Assessments

www.iadb.org/scf [email protected]

Sectors

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Infrastructure - Energy - Transportation - Water and Sanitation

Social Infrastructure - Education - Healthcare

Industries and Services - Transformation

investments - Food security - Sustainable

natural resources

Financial Markets - Financing social inclusion - Valuing the environment - Fostering trade and

Integration - Promoting sustainable FI

Syndications

SCF. Overaching Priorities in Infrastructure

13 www.iadb.org/scf [email protected]

• Energy: – Renewable generation (Wind, Solar, Geothermal) – Service improvements to energy transmission and distribution – Focus on low access and supply areas

• Transportation: – Toll Roads, Airports, Ports – Increase capacity & access – International safety standards

• PPPs – Water supply, water and waste management, energy efficiency

• Water and Sanitation – Public private partnerships (PPPs) across a range of sectors


Project Overview Pozo Almonte: three photovoltaic solar power plants

(26 MW) in the Atacama Desert in northern Chile – the world s best region for solar energy generation.

IDB loan of $41.4 million to finance its construction of which $20.7 million co-financed through the Canadian Climate Fund.

Development Impact Help develop local energy sources to diversify Chile's

energy matrix. Replace fossil fuels with a renewable energy resource

for power generation for the mining industry. Reduce CO2 emissions by 56,000 tons annually.

First large-scale photovoltaic plant in Chile

SCF. Infrastructure-Wind Farms in Mexico


Project Overview

Acciona’s 250 MW wind farm is the largest in Latin America (Eurus).

Total cost of US$ 600 million, a cornerstone of Mexico’s strategy to diversify its energy matrix.

IDB role critical in light of 2009 financial crisis as planned commercial financing fell away.

As co-lender, IDB provided US$45 million of its resources and structured another US$259 million.

IDB also structured US$30 million from the Clean Technology Fund (CTF).


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Support the growth of SMEs

Products • Loans (also syndicated) for investments and working capital

– Loans: US$100K to US$40M – Payment terms from 1 to 15 years – In local currency lending in Mexico and Colombia in support of

capital market issues • Equity: from US$2M to US$10M

– Investments with terms of 4 to 10 years

• Technical Assistance for SMEs

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[email protected] www.iic.int


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• Engaging with private sector companies, local governments, and communities in the development of innovative market- based solutions that serve the “base of the pyramid”

– Support innovative and financially sustainable approaches that

• Provide higher quality and lower prices goods and services

• Build local value chains

• Adapt product, services and distribution channels to increase access and enhance product value

- Products and services

• Loans US$3M to US$20M with up to 15 year maturity

• Partial credit guarantees

• Technical Assistance (US$100K to US$500K)


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• Expanding access to finance, markets and basic services

• Support the development of microfinance industry

• Support the Venture Capital industry

• Develop producer cooperatives and exporters’ competitiveness

• Alliances with business community networks to transfer technical skills

• Expand access to cleaner and more efficient energy for MSMEs and lower income populations

• Promote the entry of 1 M vulnerable young people into the labor market

- Instruments

• 70% of the resources are grants for non-profit organizations

• Loans (from US$100K to US$5M)

• Technical assistance

• Equity

Project Cycle

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• Confidentiality agreement • Environmental and social

criteria • Integrity

• Mandate letter • Financial analysis and due

diligence • Web publication • Impact evaluation • Term sheet

• Loan proposal • Quality and risk assessment • Publication • Board Presentation

• Loan documentation • Legal Agreements • Signature • Disbursement

• Monitoring compliance with the conditions

• Requests for information • Annual visits • Disbursements • Refunds • Monitoring the

development impact

Thanks! IDB office in Europe: [email protected]

Alejandro Alvarez von Gustedt: [email protected] Pilar Morán: [email protected]

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http://www.iadb.org The Inter-American Development Bank Discussion Papers and Presentations are documents prepared by both Bank and non-Bank personnel as supporting materials for events and are often produced on an expedited publication schedule without formal editing or review. The information and opinions presented in these publications are entirely those of the author(s), and no endorsement by the Inter-American Development Bank, its Board of Executive Directors, or the countries they represent is expressed or implied. This presentation may be reproduced with prior written consent of the author.

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Inter-American Development Bank/ www.iadb.org

general overview on idb financing ... - aicep portugal global · lisbon, portugal november 10, 2014...

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