IFC AND THE NATURAL GAS SECTOR Gas Competence Seminar - Mozambique

TABLE OF CONTENTS

2

Introduction to IFC within the World Bank Group (Slides 2- 5)

How IFC Creates Opportunity (Slides 6 - 10)

Key Downstream Development Opportunities (Slides 12 - 14)

IFC Sector Experience (Slides 15 – 18)

IFC: A MEMBER OF THE WORLD BANK GROUP

3

Conciliation

and arbitration

of investment

disputes

Guarantees

of foreign

direct

investment’s

non-

commercial

risks

Interest-free

loans and

grants to

governments

of poorest

countries

Loans to

middle-

income and

credit-worthy

low-income

country

governments

Solutions

in

private

sector

development

IBRD

International

Bank for

Reconstruction

and

Development

IDA

International

Development

Association

IFC

International

Finance

Corporation

MIGA

Multilateral

Investment

and

Guarantee

Agency

ICSID

International

Centre for

Settlement of

Investment

Disputes

PROVIDING DEVELOPMENT SOLUTIONS … Customized To Meet Client Needs

▪ A member of the World Bank

Group

▪ Provides investment, advice,

resource mobilization

▪ AAA credit rating; nearly 60-year

history in emerging markets

▪ Present in 100 countries

4

IFC is the largest global development institution focused exclusively

on the private sector in developing countries.

IFC IN SUB-SAHARAN AFRICA ( 3 Hubs, 21 Country Offices)

5

IFC Hub Offices

IFC Country Offices

ATLANTIC

OCEAN

Mediterranean

Sea

INDIAN

OCEAN

Johannesburg Maputo

Antananarivo

Lusaka

Freetown

Nairobi Kigali

Douala

N’Djamena

Lagos Accra

Ouagadougou

Abidjan

Dakar

Cairo Amman

Jerusalem Beirut

Algiers

Rabat

Sana’a

Dubai

Monrovia

Kinshasa

Addis Ababa

Dar es-Salaam

Bujumbura

Bamako

Bangui Juba

Tunis

Abuja Conakry

HOW IFC HELPS END EXTREME POVERTY

AND BOOST SHARED PROSPERITY

6

Frontier markets

Climate change

and environmental

& social sustainability

Local financial

markets

Long-term

client relationships

in emerging markets

Strategic

Focus

Areas

Constraints to private sector growth in infrastructure,

health, education, and the food supply chain

7

$17.7 billion in long-term investment:

• $10.6 billion for IFC’s own account,

• $7.1 billion mobilized

$50.4 billion committed portfolio

$4.7 billion invested in IDA Countries

Long-Term Investments: 406 new

projects in 83 countries

Advice: 65% of program in IDA

countries, 20% in fragile and conflict-

affected areas

FISCAL YEAR 2015

HIGHLIGHTS

PHILIPPINES

WHAT CLIENTS VALUE ABOUT IFC

RESULTS OF IFC Client Survey

8

Long-Term

Partner Role

Stamp of

Approval

Financing

Not Readily

Available

Elsewhere

Worldwide

Presence

Global

Expertise and

Knowledge

Affiliation

with the

World Bank

Group

Ability to

Mobilize

Additional

Funds

Pricing

WHAT WE DO

Integrated Solutions, Increased Impact

9

INVESTMENT

(Loans, Equity, Trade Finance, Syndications,

Derivative and Structured Finance, Blended Finance)

ADVICE

(Integrated with IFC Investment)

IFC ASSET MANAGEMENT COMPANY

(Mobilizing and Managing Capital for Investment)

3 Focus

Industries:

3 Product

Areas:

MANUFACTURING

AGRIBUSINESS & SERVICES FINANCIAL INSTITUTIONS

INFRASTRUCTURE AND

NATURAL RESOURCES

10

Exploration & Development:

Award Of Contracts & Licenses

Regulation & Monitoring Of

Operations

Collection Of Taxes &

Royalties

Revenue Management & Allocation

Implementation Of Sustainable

Development Policies & Projects

Macro/Fiscal, Governance, Trade, Enviro, & Transport GPGs

Cross-Cutting: Gender, Jobs, Climate, Conflict, PPPs

IBRD/IDA

IFC

MIGA

Energy & Extractives GPGs

Investment Services

Political Risk Insurance

World Bank Group Strategic Approach: Extractive Industries

Each link in the chain needs to be strong in order to deliver transformative development impact.

As WBG, we combine strengths to work across the value chain to achieve this.

E&S Services

Advisory Services

WBG Involvement Across Entire Extractive Industries Value Chain

11

Exploration

Appraisal & Development

In-country & International

Gas Pipelines

Oilfield Services

Liquefied Natural Gas

Compressed Natural Gas

Liquefied Petroleum Gas

IFC is active throughout the entire oil and gas value chain

Floating Production, Storage, Offloading

Liquefaction & Regasification

Gas Distribution

Petrochemicals & Refineries

Fertilizers

Gas-to-Power

Gas & Mixed Fuel Generation

Greenfield Oil & Gas Projects to Corporate Expansions

CASE STUDY – Peru LNG

12

Investment thesis

• Peru LNG approached IFC looking for a financial

partner with the experience to provide advice on the

environmental and social management of their $4

billion liquefied natural gas project that includes a

liquefaction plant and a 408-kilometer pipeline that

connects to an existing pipeline network east of the

Andes.

IFC’s Added Value

•Local supplier development program

• Regional program to help municipalities better

manage increased revenues

• Land acquisition and compensation

• Training community members to monitor the

company’s E&S performance

Results • Local Supplier Development - Trained 116 small

businesses including areas such as quality, negotiations,

marketing, and HSE. 167 new permanent jobs have been

created and 31 women owned firms have received SME

business management training.

• Municipal Royalty Management - Working with three

Peruvian municipalities to manage, plan, and allocate

revenues.

• Community Participatory Monitoring Program - 82

community monitors trained to focus on social and

environmental project impacts.

Peru LNG

$300,000,000 Syndicated Project

Financing

Lender

Peru

June 2007

13

Select IFC Oil & Gas Investments in Africa

IFC Hub Offices

IFC Country Offices

Cape Town

Johannesburg Maputo

Antananarivo

Lusaka

Freetown

Nairobi

Kigali

Douala

N’Djamena

Lagos

Accra

Ouagadougou

Abidjan

Dakar

Cairo

Algiers

Rabat

Monrovia

Kinshasa

Addis Abala

Dar-es-Salaam

Bujumbura

Bamako

Bangui Juba

$40,000,000

Revolving Credit

Facility

Gabon

June 2005

VAALCO Energy

$165,000,000

Senior Loan

Ghana

2009, 2011

Tullow Oil

$100,000,000

Senior Loan

Ghana

2009, 2012

Kosmos Energy

$30,000,000

Mezzanine Loan &

Equity Investment

Tunisia

October 2008

TOPIC

Tunisia

$10,000,000

Equity Investment

January 2012

Candax Energy

$175,000,000

Reserve Based

Islamic Financing

Egypt

2009, 2011, 2012

Kuwait Energy

$200,000,000

Senior Loan and

Syndication

Chad-Cameroon

June 2001

Chad-Cameroon

Pipeline

$18,500,000

Equity Investment

Mozambique

December 2003

Southern Africa

Gas Pipeline

$1,000,000

Equity Investment

Nigeria

April 2005

Afren

$20,000,000

Equity Investment

Cote d’Ivoire

January 2012

Rialto Energy

IFC’s Track Record in LNG

14

IFC is a leading bank in financing small scale LNG, LNG trucking and LNG filling stations

▪ FY04, IFC finance the first LNG trucking project in Dominican Republic.

▪ FY04, IFC provided $40 million A Loan and $10 million equity to Xinao Gas, China to build city gas

distribution network.

▪ FY08, IFC provided $200 million loan to Petronet LNG expansion in India

▪ FY08, IFC provided $300 million A Loan to help finance Peru LNG (4.5 mtpa)

▪ In FY13 IFC provided $150 million to ENN Energy to develop 500 LNG filling stations in China to

encourage fuel switching from diesel to gas.

▪ In FY15, IFC invested $150 million equity (with AMC) in Tian Lun Gas for building small LNG

liquefaction plants, city gas distribution network, and LNG/CNG stations;

▪ In FY15, IFC provided $300 million loan to China Gas to expand the company’s city gas distribution

network.