The New Bank and Private Sector Activities

The New Bank and Private Sector Activities

Lori KerrAdvisor, Vice Presidency for Private Sector and Non-Sovereign Guaranteed Operations

Washington, DC October 15, 2008

AgendaAgenda

Background on IDBBackground on IDB

Private Sector OperationsPrivate Sector Operations

New Business ModelNew Business Model

Products for Private Sector ClientsProducts for Private Sector Clients

IDB’s Competitive AdvantagesIDB’s Competitive Advantages

Consulting OpportunitiesConsulting Opportunities

Contact InformationContact Information

Inter-American Development BankInter-American Development Bank

Oldest and largest multilateral lender to Latin America and the Caribbean dedicated to accelerate economic and social development

Regional institution with 47 member countries, including 26 borrowing member countries

Established in 1959 Provides US$10 billion annually in lending and technical

assistance Public sector operations Private sector operations

IDB: New Business ModelIDB: New Business Model

New corporate structure Strengthened private sector operations Broader client base Expanded sectors More agile and responsive

IDB: New Business ModelIDB: New Business Model

Public Public Private*Private*PPPPPP

MixedMixed

BasicInfrastructure:

TransportEnergy

Water & SanTelecom

State Owned State Owned EnterprisesEnterprises

withoutwithoutSovereign Sovereign GuaranteeGuarantee

(Federal, State, (Federal, State, Municipal Municipal

Sovereign- Sovereign-

Guaranteed Guaranteed

OperationsOperations

*Authorized up to 10% of IDB Outstanding Balance

Extractive Industries:

Gas Oil

Mining

Basic .Industries:

PulpPaper

ChemicalSteel

ManufacturingTourism

AgribusinessServices

Private Sector Operations: IDB Group

Private Sector Operations: IDB Group

The IDB Group, comprising the Inter-American Development Bank, the Inter-American Investment Corporation and the Multilateral Investment Fund, provides a wide range of financial and non-financial products and services to non-sovereign clients

Large projects, enterprises and financial institutions

SMEs and financial institutions focused on

SMEs

Micro, small and medium enterprises

Inter-American Development BankStructured and Corporate Finance Department

Opportunities for the Opportunities for the MajorityMajority

IDB’s Competitive Advantages IDB’s Competitive Advantages

Deep Knowledge and Excellent Relations with Latin America and the Caribbean– Oldest and largest multilateral lender to the Region– Cooperative, long-term relationship with member

countries– Help mitigate political risks– Exemption from withholding taxes and de facto

preferred creditor status Solid Financial Position

– AAA/Aaa Rating (S&P, Moody’s)– Authorized capital of US$101 billion– Ability to extend tenors at market pricing

IDB’s Competitive Advantages IDB’s Competitive Advantages

IDB Value-Added– “Umbrella Effect” helps to attract other lenders – Catalytic role: IDB financing mobilizes private

investment– Internationally recognized environmental, social,

labor and health standards provide comfort to governments, communities, lenders and sponsors

– Flexible risk sharing arrangements

Products for Private Sector ClientsProducts for Private Sector Clients

A/B Loans Political Risk Guarantees Partial Credit Guarantees Direct equity and quasi-equity investments Investment funds Technical assistance:

– Renewable Energy (SECCI)– Infrastructure (InfraFund)– Water & Sanitation (Aquafund)– Other trust funds

Consulting OpportunitiesConsulting Opportunities

Phases in transaction cycle:– Upstream feasibility– Detailed due diligence– Ongoing administration

and monitoring

Process of engagement:– Request for proposals– Proposal evaluation– Consultant selection– Consultant Services

Agreement

Areas of expertise:– Technical– Market– Financial

– Economic– Environmental and Social– Insurance

Contact InformationContact Information

Structured and Corporate Finance Department (SCF) Structured and Corporate Finance Department (SCF) Large projects, enterprises and financial institutions

– Phone: +1 (202) 623-3702Phone: +1 (202) 623-3702– www.iadb.org/scf

Opportunities for the Majority (OMJ) Opportunities for the Majority (OMJ) Market-based strategies to bring economic and social development to low-income populations

– Phone: +1 (202) 623-2676Phone: +1 (202) 623-2676– www.iadb.org/OM

Inter-American Investment Corporation (CII)Inter-American Investment Corporation (CII) SMEs and financial institutions focused on SMEs

– Phone: +1 (202) 623-3900– www.iic.int

Multilateral Investment Found (MIF)Multilateral Investment Found (MIF)Micro, small and medium enterprises

– Phone: +1 (202) 942-8124– www.iadb.org/mif