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Frontier Markets Fund Managers US$ 944 million committed to 52 projects
Roland Janssens, Director
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Frontier Markets Fund Managers- FMFM
FMFM is the fund manager of Emerging Africa Infrastructure Fund (EAIF); and
GuarantCo
The fund manager is owned by Standard Bank (70%), FMO (18%) and EMP
(12%)
The fund management team is based in London
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EAIF & GuarantCo are part of the Private Infrastructure Development Group – PIDG
UK; SWEDEN; NETHERLANDS; SWITZERLAND; GERMANY; AUSTRIA; IRELAND; WBG
PIDG Trust
EAIF GurantCo ICF TAF InfraCo DevCo
provides funding along side
EAIF & GurantCo
EAIF & GuarantCo can finance projects
developed by
InfraCo & DevCo
Management agreement with
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Emerging Africa Infrastructure Fund - EAIF
First dedicated debt fund for sub-Saharan Africa (started in Jan.2002; 10 years old)
Current Size: US$ 710m
Shareholders: 4 European Governments (UK, Netherlands, Switzerland and
Sweden) - US$ 160m
Equity leveraged through a combination of Senior and Subordinated Debt from 7
DFIs (FMO, DBSA, KFW, DEG, IFC, AfDB and OeEB) and 2 commercial banks
(Standard Bank SA and Barclays)
Approval process takes between 8-12 weeks from the in principle approval to
Board approval
Operates on commercial basis
Financed 38 projects to date with a total exposure of US$ 758m
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EAIF – investment policy
Lend to private sector owned, managed and controlled entities with infrastructure sector focus Power Transport Telecoms Water Manufacturers of components of infrastructure e.g. cement Infrastructure within mining and agribusiness projects
Sub-Saharan Africa focus excluding Mauritius Investment Size:US$10 – US$30 million FMFM can arrange US$200 million and more through its financing partners Tenor: up to 15 years Instruments: Senior and Mezzanine Debt (possibly with equity features) Does not require a Political Risk Insurance (PRI)
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EAIF’s Portfolio is Spread Over 7 Sectors & 15 Countries
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EAIF - selected transactions
Rabai Sector: Power Country: Kenya Description and Financing Parameters:
EAIF was the lead arranger of Euro85 million facility for the Rabai Power Project in Kenya, developed by Aldwych International together with BWSC
Debt package comprised of a Senior and Subordinated Debt. Lender Group included, FMO, Proparco, DEG and EAIF
The project received Africa power deal of the year awards from Project Finance International and Project Finance magazine
African Foundries Limited - PARCO Sector: Industrial goods Country: Nigeria Description and Financing Parameters:
EAIF committed US$ 20m of senior debt to African Foundries Limited, Nigeria The Debt package comprised of: (i) a 7¼-year DFI tranche, (ii) a 3 year Comercial Banks tranche
and a working capital facility form Nigeria banks The plant would be the only Nigerian facility with the capability to produce TMT rebars
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EAIF - selected transactions (continued)
Seacom Sector: Telecom Country: Pan African Description and Financing Parameters:
The US$600m Seacom project is the first undersea fiber optic cable project along the east coast of Africa, the only region in the world not currently served by such an infrastructure
EAIF provided US$36.5m debt financing to a special purpose vehicle controlled by Industrial Promotion Services (Kenya), one of the sponsors and a subsidiary of the Aga Khan Fund for Economic Development
The project received deal of the year award from Project Finance International
MOMA Sector: Mining Country: Mozambique Description and Financing Parameters:
The developers of this titanium mineral sands project approached EAIF as a ‘lender of last resort’.
Located in one of the most under-developed regions of Mozambique, the US$413 million project is the second lowest cost producer of titanium in the world
EAIF committed US$36.5 million of senior and subordinate debt (total debt package of US$270 million)
The project received deal of the year awards from both the Mining Journal and Project Finance International publications
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Pipeline: 26 additional NBC approve projects US$488 m exposure
Sector Number Amount
of Projects US$ m
Agribusiness 4 72.5
Power 8 161.2
Telecoms 3 32.1
Transport 2 47.5
Water 1 28.3
Waste 1 20.0
Gas 2 21.0
Manufacturing 3 60.0
Mining 2 45.0
Total 26 487.6
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Projects financed or in the process of financing by EAIF
EAIF Summary of transactions (2003-2008)
1139
Oct 2004
MOMAGBP 594 million
Construction and operation of a Greenfield mineral sands project (ilmenite, rutile, zircon)
near Moma, northern Mozambique
US$ 5m - Senior Debt US$ 24.5m - Mezz. Facility
Jan 2003
MSI-Cellular / CeltelUS$ 260 million
Expansion of a GSM network across selected countries in Arica
US$ 30m Mezzanine debt facility
Feb 2007
Eleme PetrochemicalsUS$ 400 million
Financing of a post privatisation turnaround program for a petrochemical plant in Nigeria
US$ 20m Senior Debt facility
February 2007
Celtel NigeriaUS$ 190 million
Corporate facility for the expansion of Celltels GSM network in Nigeria
US$ 35mSenior Debt Facility
June 2007
Celtel AfricaUS$ 320 million
Corporate facility for expansion of GSM network in 5 African countries
US$ 24mSenior Debt Facility
Nov 2007
SeacomUS$ 600 million
Debt financing for equity participation of IPS Kenya (AKFED) in Seacom, the first submarine
fibre optics cable along the eastern coast of Africa
US$ 36.5m lender to IPS CSH for Seacom equity
Jan 2008
Orpower 4US$ 180 million
Expansion of the Olkaria III Geothermal power project to 48 MW
US$ 15m Senior Debt Facility
Mar 2008
Safal InvestmentsUS$ 211 million
Construction of a 13 MW run of river hydro power plant in Uganda
US$ 15m - Senior DebtUS$ 14m - Sub Debt
May 2008
Tronder PowerUS$ 56 million
Construction of a 13 MW run of river hydro power plant in Uganda
US$ 35m Senior DebtUnderwriter and Arranger
Sept 2008
Rabai Power ProjectEUR 120 million
Construction of a 90 MW HFO fired power plant in Kenya
EUR 22.5m Arranger –Senior Debt Facility
September 2008
SAEMSUS$ 85 million
US$ 14m Senior Debt Facility
Corporate facility for a portfolio of 12 small hydro power plants in Sri Lanka and Uganda
Aug 2003
AES SonelEUR 240 million
Construction of an 85 MW HFO fired power plant in Cameroon; in 2006 the facility was
increased to EUR 240 million and EAIF acted as a co-lender
EUR 24m Arranger –Senior Debt Facility
Nov 2004
MTN NigeriaUS$ 200 million
Corporate facility for the expansion of MTN’s GSM network in Nigeria
US$ 10mSenior Debt Facility
September 2005
Obajana CementUS$ 798 million
Construction and commissioning of a greenfield cement production plant with a capacity of 4.4 million tons per annum in
Nigeria
US$ 30m Senior Debt Facility
Nov 2004
SPM GhanaUS$ 47.3 million
Financing of a Single Point Mooring system and a conventional buoy mooring system in
the waters outside Tema Port, Ghana
US$ 12m Senior Debt Facility
EAIF Summary of transactions (2009-2011)
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July 2010
ALAF LimitedUS$ 35 million
Construction of a Metal Coating and Roofing facility in Tanzania
US$ 5mSenior Debt Facility
October 2010
Tema Osonor Power LtdUS$ 128 million
Construction of a 126MW gas-fired power plant in Tema, Ghana
US$ 15mCo-Arranger –Senior Debt Facility
November 2010
DPW Dakar EUR 216 million
Upgrade & expansion of the container terminal in the Port of Dakar, Senegal
EUR 12.5mSenior Debt Facility
November 2010
O3b NetworksUS$ 1.2 billion
Orbit Satellites and ground facilities to deliver fibre quality broad band
communications services to emerging markets
US$ 12.5m Senior Debt US$ 12.5m Sub Debt
December 2009
African Foundries LimitedUS$ 130 million
Construction of a 150MT p/a rolling mill that will produce TMT Rebars, Nigeria
US$ 20mSenior Debt Facility
African Foundries Limited
December 2009
Helios Towers NigeriaUS$ 250 million
Corporate facility for the expansion of Helios’ tower network in Nigeria
US$ 19mSenior Debt Facility
October 2009
Bisha Mining Share CompanyUS$ 460 million
Construction and operation of the first modern mine in Eritrea mining gold and
copper in Eritrea
US$ 25m Mezzanine debt
June 2009
Zain GhanaUS$ 523 million
Construction and operation of a greenfield mobile network in Ghana
US$ 17.5m Senior Debt Facility – B Loan
Jan 2009
SPA MaghrebUS$ 24 million
Construction of green field steel pipe manufacturing company in Algeria
US$ 17mSenior Debt Facility
February 2009
Aldwych InternationalGBP 44 million
Round B equity and high yield debt financing for start up power plant developer Aldwych
International
EUR 6m - Senior debtUS$$ 1m - Equity
June 2011
Tower Power Abeokuta LtdUS$ 21.3 million
Constriction of Greenfield 12.5MW gas fired combined cycle power plant in Nigeria
US$ 15m Arranger –Senior Debt Facility
June 2011
Addax BioenergyEUR 267 million
The development of a 10,000ha sugarcane plantation, an ethanol distillery producing 82,000 m3 of ethanol p.a. and a 32MW
cogeneration power plant in Sierra Leone
EUR 20m Co-Arranger –Senior Debt Facility
US$ 25mCo-Arranger –Senior Debt Facility
August 2011
KivuWatt LtdUS$ 140 million
The development of an Integrated Methane Gas to Power Project in Rwanda utilizing
Lake Kivu’s unique methane gas resources. The project will consist of a Gas Extraction
Facility plus a 25MW power plant
December 2011
Helios Towers TanzaniaUS$ 85 million
Acquisition of >1000 telecom towers from Millicom Tanzania Ltd. Debt facility for
refurbisment and expansion of the tower network
US$ 15mSenior Debt Facility
December 2011
Kalangala InfrastructureUS$ 54 million
Development of road, ferry, water supply and power services for Kalangala District in
Uganda
US$ 7mSenior Debt Facility
EAIF Summary of transactions (2012-)
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January 2012
SAEMS IIUS$ 30 million
Increase of the corporate facility to facilitate the development of SAEMS’s 2nd hydro
power project in Uganda
US$ 6mSenior Debt Facility
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GuarantCo
GuarantCo’s business is:
“Credit enhancement of local currency debt issuance by the private, municipal and parastatal infrastructure sectors in lower income countries”
In addition to enabling infrastructure this approach also builds sustainable financing capacity in domestic capital markets through partnering with local institutions and introducing new approaches to project risk evaluation and financing
Initial capital of US$100m leveraged to US$200m by KFW and Barclays Additional backing from KfW / Barclays up to total of US$400m Covers similar infrastructure sectors to EAIF plus urban infrastructure Can include refinancing to local currency Operates globally
Financed 14 projects to date with a total exposure of US$ 185.5m
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GuarantCo offers
Partial credit guarantee covering default risk on a portion of a loan or bond - generally on demand and unconditional
Partial risk guarantee covering default risk due to specific events - such construction failure or revenue shortfall
Cover for senior, mezzanine or sub debt; maturity, coupon or principal strips; Loans, bonds or securitisation
Other methods of risk transference considered (e.g. insurance / reinsurance or CDS / derivatives)
Preference for risk sharing - defined on a case-by-case basis
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Case Study – Tower Aluminium Limited
Tower Aluminium Group Limited (“Tower”), the largest manufacturer of aluminium roofing in West Africa
In late 2008 the Naira devalued by c 25% against the USD. Tower’s revenues are mostly in Naira and the impact of the devaluation was to significantly increase the cost of servicing its USD financial liabilities.
Tower decided to refinance its USD liabilities by issuing a 7 year Naira denominated corporate bond.
Tower was however unable to secure the “A” local rating required to be able to access local pension funds. GuarantCo was able to use its local AAA rating in Nigeria to credit enhance Tower’s bond issue.
This was the first time such a structure had been used in Nigeria. GuarantCo’s support also stretched the tenor to 7 years from the typical 5 years for previous
corporate bonds. Following a request for assistance, GuarantCo is also working with the Nigerian Securities &
Exchange Commission to set up training and mentoring of their staff.
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GuarantCo - Summary of transactions (2005-2009)
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GuarantCo - Summary of transactions (2010-2011)
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Potential Transactions
Up to $15m partial guarantee for an integrated wood fuel manufacturing and power
generation project in Liberia
Guarantee of Thai Baht financing for biogas projects in Mekong region
Partial guarantee of $7m finance for a new private sector utility on Bugala Island,
Uganda
$17m partial guarantee for a new factory producing steel pipes for the water sector
in Algeria
Partial guarantee of a $22m broadband backbone service financing in Niger
$20m partial guarantee for a 128km gas pipeline in Nigeria
Credit enhancement of a $13m programme for financing sub-national providers of
water and waste water services in Kenya
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Through PIDG we can provide grant funding to new projects
The grant funding supports the following activities
Infrastructure Development Strategies: Studies intended to support go/no decision for new projects
Environmental Studies: Studies intended to support the Project’s environmental aspects
Pioneering or Pilot Transactions: Support to the design and implementation of particular projects or transactions such as feasibility
studies Capacity Building:
Activities aimed at policy development and initial legal work
Contact details
Roland JanssensDirectorFrontier Markets Fund Managers (FMFM)
Add: 20 Gresham Street, London, EC2V 7JETel: +44 203 145 8611Mob: +44 7825 504 290Mail: [email protected]
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www.frontiermarketsfm.com www.emergingafricafund.com www.guarantco.com