introduction to the idb and the idb group’s private sector...
TRANSCRIPT
Introduction to the
IDB and the IDB
Group’s Private
Sector Operations
Lori Kerr
Vice Presidency for Private Sector and Non-Sovereign Guaranteed Operations
January 18, 2011
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Agenda
I. The IDB: Who we are and what we do
II. Introduction to the IDB Group’s Private Sector Windows
III. Working with the IDB
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IV. Contacts and sources of information
I. The IDB: Who we are and what we do
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Our history…
• Established in 1959, the IDB is the oldest and largest
of the regional multilateral development banks
• Provides more development finance to Latin America
and the Caribbean than any other multi or bilateral
institution
• 48 member countries, 26 borrowing member countries
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The IDB is majority controlled by borrowing
member countries
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Latin America &
the Caribbean
Japan, China &
Republic of Korea5%
United States
30%
Canada
4%Europe & Israel
11%
50.02%
Our role…
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• The IDB, the largest source of long-term lending in
Latin America and the Caribbean, combines financial
resources with knowledge to help fight poverty and
inequality, and brings about sustainable development.
The IDB has two modalities to support
development
Sovereign-guaranteed (SG)
programme
• Lending with a sovereign guarantee
• Technical assistance to governments
Non-sovereign guaranteed
(NSG) programme
• Lending and guarantees to private sector entities and state-
owned enterprises without a sovereign guarantee
• Technical assistance to private and state-owned companies
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Through SG and NSG lending, the IDB has the
largest exposure in Latin America and Caribbean
of any development bank
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SG lending: US$54.3
billion
NSG lending and guarantees:
US$3.7 billion
Total IDB lending
exposure to LAC: US$58.0
billion
The IDB’s Board of Governors recently approved
its ninth general capital increase
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Two strategic goals
Addressing the special needs of less developed and smaller countries
Fostering development through the private sector
Two overarching objectives
Reducing poverty and inequality Sustainable growth
Major increase in resources of US$70 billion to sustain an overall annual lending volume of US$12 billion
The IDB has five sector priorities that guide
operations
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Social policy for equity and productivity
• Social safety nets, health, education, housing, food and nutrition, base of the pyramid, job creation
Infrastructure for competitiveness
• Regulatory and investment support for power, transportation, water, tourism
Institutions for growth
• Institutional strengthening, MFI and SME on-lending through financial institutions, capital markets development
Regional and global integration
• Trade, natural resources, cross border investments
Climate change
• Regulatory and investment support for renewable energy, energy efficiency, recycling industries, biofuels, agriculture and food security
Four lending programme targets by 2015
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Objectives and Targets
• Objective: Increase support to small and vulnerable countries (19 countries) from 27% to 35%
• Objective: Increase lending volumes for poverty reduction and equity enhancement from 40% to 50%
• Objective: Increase loans for climate change and environmental sustainability from 5% to 25%
• Objective: Increase integration and regional cooperation to 15%
II. Introduction to the IDB Group’s Private Sector Windows
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IDB Group: A Key Business Partner for Development through the Private Sector
Micro and Small Enterprises
SMEs and Small BanksLarge Companies, Projects and Financial Institutions
The IDB Group comprises four teams dedicated to
the private sector
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Multilateral Investment Fund (FOMIN)
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MIF Focuses on Micro and Small Enterprises
Grant resources and investments to support private sector development by financing innovative, sustainable projects that can be scaled up and replicated in other sectors and countries.
MIF works with local partners from the private sector, civil society organizations and governments.
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Grants for private non-profit
organizations (e.g. business associations),
NGOs and foundations, public sector
agencies
70%
Investments through financial intermediaries that provide loans, equity
investments and technical
assistance
30%
MIF’s “Agendas” guide grants and investments
Access to Basic Services
• Engaging private sector in delivery of basic services
• Climate change
Access to Markets and Capabilities
• Market Functioning
• Business Capabilities
• Job skills
Access to Finance
• Microfinance
• Early-stage equity
• SME Financing
• Financial Services for Low Income People
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Inter-American Investment Corporation (IIC)
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IIC finances SMEs and Smaller Banks
Support SMEs through local financial institutions for on-lending.
Direct investment in key sectors such as agriculture and agribusiness, food and beverage, education, energy, infrastructure, pulp and paper, manufacturing, textiles, among others.
Products
Medium or long-term loans in US dollars or local currencies at market rates
Syndicated loans (B-loans)
Partial credit guarantees
Equity and quasi-equity investments
Technical assistance
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Technical assistance specialized for SMEs• Methodology to perform diagnostic reviews of
SMEs that allows for a systematic evaluation of operations and provide a roadmap for improvement.
FINPYME
• Improves SME export capability based on Aid-for-Trade Initiative of WTO.
FINPYME ExportPlus
• Geared towards improving the governance of family-owned SMEs.
FINPYME Family Business
• Help SMEs adopt best practices to combat fraud and corruption and instill business ethics into their daily operations.
FINPYME Integrity
• Helps SMEs reduce energy consumption by adopting best practices in energy efficiency thereby lowering carbon emissions.
GREENPYME
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Structured and Corporate Finance (SCF)
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SCF has three operational divisions
Infrastructure
•Energy
•Emphasis on renewable generation (wind, solar, geothermal)
•Promoting service improvements to energy transmission and distribution
•Focus on low access and supply areas
•Transportation
•Toll Roads
•Airports
•Ports
•Water & Sanitation
•Water supply
•Water and waste treatment
•Energy efficiency
Industries and
Services
•Transformational Investments
• Industrial energy efficiency investments
•Recycling
•Sustainable cement
•Clean fuel alternatives
•Food Security
• Integrated agribusiness
•Agricultural inputs
•Small-farmer productivity
•Sustainable Natural Resources
•Sustainable mining & forest products
•Sustainable tourism
•Job creation through industrial competitiveness
•Social Impact
•Healthcare
•Education
•Supply chain
• Incentivizing CSR
Financial Markets
•Financing Social Inclusion
•Reaching underserved markets
•SMEs
•Affordable housing
•Microfinance
•Developing local capital market
•Valuing the Environment
•Reducing the environmental footprint of financial intermediaries
•Mitigating climate change while generating financial returns
•Fostering Trade and Integration
•Expand trade financing for SMEs (TFFP)
•Promoting Sustainable FIs
•CSR projects:
-financial literacy
-corporate governance and transparency
•Funds for infrastructure
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SCF focuses on large projects, corporates
and financial institutions
Project financing for greenfield and brownfield projects
Corporate financing for expansions and modernizations
Financing for large financial institutions and intermediaries
Products
Medium or long-term loans, primarily in US dollars, at market rates
Syndicated loans (B-loans)
Partial credit guarantees (including for local currency loans)
Political risk guarantees
Technical assistance
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Opportunities for the Majority (OMJ)
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Innovative business and marked-based
solutions to benefit low income population
• 70% of Latin Americans earn
less than US$3/day
• OMJ targets this sector with
medium and long-term loans
and partial credit guarantees
up to US$10 million
• Technical assistance
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III. Working with the IDB
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Why consider working with the IDB? (1)
Partnering in risky markets
Your project is in a regulated or sensitive industry and you would like to have a partner engaged in framing corresponding institutional frameworks
Your project requires specialized knowledge available at IDB
Your products and services reach or engage “the Majority”
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Why consider working with the IDB? (2)
You are undertaking a Public-Private-Partnership
Credit for your project is not entirely available from private sources
Your project has sensitive environmental or social impacts that you would like to address with a partner experienced in these matters
Your project requires technical assistance to flesh it out fully or assure its success
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Financing from the IDB Group is…
•in structure, terms, and payment conditions
Flexible
•with new solutions for new needs
Creative
•in the analysis, approval, and disbursement process
Efficient
• Overview of project or investment
• Financing requested
• Purpose of the financing
• Company/sponsor information
• Market information
• Environmental and social information
To begin a discussion….
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Consulting opportunities
• Two phases in transaction cycle
where external consultants are
needed:
– Detailed due diligence
– Ongoing administration and monitoring
• Process of engagement
– Request for proposals
– Proposal evaluation
– Consultant selection
– Consultant Services
Agreement/Monitoring Agreement
Areas of expertise
Technical
Market
Financial
Economic
Env & Social
Insurance
Other specialized
fields
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Consulting opportunities
Our web page: www.iadb.org
Consultancy opportunities
within private sector projects
• Business
– Doing Business
• Contract opportunities
– Consultancy within
private sector projects
– Consultancy within
public sector projects
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Consultant enrollment form
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IV. Contacts and sources of information
Please feel free to contact us
Julie Katzman
Manager, MIF
Tel. 202-623-1278
Email: [email protected]
Hans Schulz
Manager, SCF
Tel: 202-623-3702
Email: [email protected]
Steven Reed
Deputy General Manager, IIC
Tel: 202-623-3981
Email: [email protected]
Steven J. Puig Lori Kerr
Vice President for Private Sector and Vice Presidency for Private Sector and
Non-Sovereign Guaranteed Operations Non-Sovereign Guaranteed Operations
Tel: 202-623-1253 Tel: 202-623-3184
Email: [email protected] Email: [email protected]
Luiz Ros
Manager, OMJ
Tel. 202-623-2676
Email: [email protected]
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Vanessa Defournier
Office of External Relations
Communications Specialist, Private Sector
Email: [email protected]
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