Oesterreichische Entwicklungsbank AG –OeEBDevelopment Bank of Austria

October 2013

27. Alpbacher Finanzsymposium 2013

Michael Wancata

Set up in March 2008

Mandated by the Austrian Government as the official Development Bank of Austria

Each project has to fulfil or at least contribute to development policy criteria

NOT tied to Austrian investments and/or supplies and services

100 % private - wholly owned subsidiary of Austria’s ECA (OeKB)

S&P Rating: AA+ (January 2012)

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Basics & Mandate

Mandate

Ownership100 %

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OeEB – A member of EDFIEuropean Development Finance Institutions

A group of 15 bilateral institutions, operating in Developing Countries and Emerging Markets, mandated by their governments to

• foster growth in sustainable businesses

• help reduce poverty and improve people's lives

• contribute to achieving the Millennium Development Goals

by promoting economically, environmentally and socially sustainable development through financing and investing in profitable Private Sector enterprises

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EDFI - members

A network of 15 members across Europe

Institution Country EstablishedCDC UK 1948DEG Germany 1962IFU Denmark 1967FMO Netherlands 1970SBI Belgium 1971PROPARCO France 1977SWEDFUND Sweden 1979FINNFUND Finland 1980COFIDES Spain 1990SIMEST Italy 1991NORFUND Norway 1997BIO Belgium 2001SIFEM Switzerland 2005OeEB Austria 2007SOFID Portugal 2007

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The „third pillar“ in Development Cooperation The DFI plays a complementary role in International Development

Policyand investing in profitable Private Sector enterprises

• Donations, public sector and civil society

• Humanitarian and development assistance

• Loan, grant and guarantee financing

• Public sector, mostly large scale

• Equity, loans andguarantee, politicalrisk insurance

• Private sector• Catalysing co-investment and expertise

AID Development Bank (public sector arms)

DFI’s and private sector arms of development

banks

• Equity, loans & guarantee, political risk insurance

• Private sector• Catalysing co-investment and expertise

The EDFI members represent a “third pillar” alongside traditional aid instruments and development banks dedicated to the public sector

In principle OeEB provides financing to projects in all developing and transition countries on the OECD-Development Assistance Committee list

Planned portfolio breakdown by committed project volume by 2015:

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OeEB‘s Strategy: Regions

30% Asia 15% South Caucasus and Central Asia15% Other

25% Europe 15% Western Balkans/Eastern Europe10% Russia*

15% Latin America 8% Central America7% South America and the Caribbean

20% Africa 18% Sub-Saharan Africa (incl. South Africa)2% North Africa

10% Supra-regional

* Involvement of an Austrian company required

Planned portfolio breakdown by committed project volume by 2015:

60 % Financial Sector: Credit lines to financial institutions as intermediaries (e.g. micro-finance institutions, banks, etc.) to realize projects in the real sector, e.g. for MSMEs financing, energy efficiency or infrastructure projects.

40 % Real Sector: Credit lines to corporates or project companies to realize projects, thereof:

25 % in the infrastructure sector (including energy sector)10 % in the manufacturing/industry sector 5 % in other sectors

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OeEB‘s Strategy: Sectors

A potential project shall

meet development policy criteria (sustainability e.g.: poverty reduction, employment, gender equality and the empowerment of women, transfer of know-how, etc.)

be commercially self-supporting (profitable)

be predominately in the private sector (PPP possible)

be located in a developing country.

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OeEB Financing Criteria

OeEB generally provides the following products:

1. Long-term financing (Investment Finance)

2. Advisory Programmes

3. Equity

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Products in general

Currencies: EUR or USD

Products: senior loans, subordinated loans, risk participations

Amounts: up to EUR 25 million per transaction

Tenors: up to 15 years incl. grace periods, if required

Collateral: Adequate to the respective project

Conditions: i.e.

Solid track-record of the sponsor

Interest and fees close to market rates (no interest subsidies)

Compliance with environmental and social standards.

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Long-term financing

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OeEB – Scope of Support

Austrian investor with OeKB coverage

Commercial bank with OeKB covering the Austrian export share

Equity30 – 40 %

Equity30 – 40 %

Debt Financing60 – 70 %

30 -35 %

30 -35 %

OeEB for financing the not-OeKB-covered position (e.g. local cost)

of that max. 25 % OeEB as equity co-investor

Advisory ProgrammesStudies, project-preparing, -accompanying measures

OeEB project-preparing or accompanying financing

Ove

rall

Fina

ncin

gC

osts

Consultancy

gEconomic Partnership

Program OeEB and ADA

AWO / Advantage Austria

Environmental and Social (E&S) Standards in the OeEB project cycle

Screen for Knock Out criteria - Exclusion List*

• Assess potential negative E&S impacts of project (potentially with the help of independent experts)

• Assess client‘s willingness and capacity to mitigate these impacts

• Identify concrete steps to bring project into compliance with relevant E&S Standards

• Environmental and Social Action Plan (compliance not at project start, but during project implementation)

Agree E&S requirements (incl. final Environmental and Social Action Plan) and put them in contract

Implementation, Reporting and Monitoring

Classify transaction according to E&S riskEarly stage

Due Diligence

Approval

Financial close

Go/no go

Imple-mentation

* http://www.oe-eb.at/de/osn/DownloadCenter/richtlinien/OeEB-Sektorenausschlussliste.pdf

Low Risk High Risk

Environmental and Social (E&S) Standards used in OeEB projects

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OeEB‘s approach based on: EDFI Principles for ResponsibleFinancing

E&S requirements depend on E&S risk of transaction

Use of already established internationally recognized E&S standards(also used by: Equator Principle Financial Institutions; Export CreditAgencies etc.)

Compliance with E&S requirements from national and local legislation

Compliance with ILO Core Labour Standards

Compliance with:• IFC Performance Standards*• World Bank Environmental, Health and

Safety Guidelines*• E&S management systems according

to international standards

* www.ifc.org/sustainability

HPP project Lengarica/Albania Austrian investor: Enso

Austrian distributor: Global Hydro Energy, Strabag

Total investment: ~ EUR 23 Mio.

OeEB share of financing: EUR 5 Mio.

Green for Growth share of financing: EUR 9 Mio.

Selected Reference Projects

Selected Reference Projects

Equity Shareholder:Enso Hydro Energji

sh.p.k.

Borrower:Lengarica & Energji

sh.p.k.

Hasi:Hasi Energji sh.p.k.

Parent:Enso Hydro GmbH

80%

100%

99,99% 0,01%

HPP project Lengarica/Albania

La VegonaHydropower plant in HondurasSenior loan

Total Investement Amount: USD 98 million

To reduce the dependence on fossil fuel and to improve the competitiveness and sustainability of Honduras’ exporters the Honduran government promotes investments in renewable energy.

IFC and OeEB are providing USD 98 million in financing for CompañíaHondureña de Energiá Removable S.A. (COHERSA) to construct a private hydropower project with a capacity of 38.5 megawatt

Selected Reference Projects

Total Investment Amount: USD 157 million

Nicaragua has some of the most abundant geothermal resources of any country worldwide. Aside from their great economic importance, these resources have special significance against the backdrop of climate change. Geothermal power is a clean and reliable form of renewable energy.

OeEB is supporting this project which will be built by an experienced project company, PENSA (Polaris Energy Nicagagua S.A.) with an investment amount of USD 15.1 million, together with IFC and eight other development institutions.

Selected Reference Projects

San Jacinto,Geothermal power plant in NicaraguaSenior loan

Joint Credit Line: EUR 20 million

OeEB and KfW Entwicklungsbank have provided support to Turkish Sekerbank with a joint credit line of EUR 20 million for the provision of energy efficiency loans to its clients. OeEB Investment EUR 10.8 million.

Sekerbank specialises in the financing of micro-, small and medium enterprises (micro- and SMEs), and can now expand its portfolio of loans in the area of energy efficiency due to the cooperation with OeEB and KfW Entwicklungsbank.

Selected Reference Projects

Sekerbank, TurkeySpecial loans for energy efficiency investments

Aim of project:

Sekerbank is one of the most important private banks in Turkey with 250 branches. In the forefront of an earmarked credit line to refinance energy efficiency loans, OeEB and KfW have provided technical assistance to Sekerbank to improve thecapacity of the employees at Sekerbank and its clients regarding energy efficiency.

Main activities of the project included:

Integrating energy efficency as a new product at Sekerbank

Capacity training for employees and clients

Performance of an impact measurement of the credit product.

Selected Reference Projects -Continued

Sekerbank, TurkeyEstablishing a new bank product for energy efficiency financing toSME‘s and households

Advisory Programmes (AP) can be used to enhance the developmental impact of projects.

The allocation of these AP funds shall be linked to projects that offer financing opportunities now or in the near future.

The financial support provided through AP can be in the field of

identifying, preparing and implementing projects or their assessment and monitoring.

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Advisory Programmes

Project related Advisory Programmes might be:

• Training for local staff, management assistance

• Studies (sector, market or feasibility studies, ESIA)

• Technical experts during project preparation, implementation and monitoring

• Project related measures regarding environment or healthcare

• Measures in the context of privatisations or restructurings which alleviate negative social effects.

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Advisory Programmes II

Conditions for equity participation in companies (incl. banks):

Minority shareholder, max. 25% share

Investment volume: EUR 2-5 million

Pre-defined exit strategy

Conditions for participation in funds:

Total Fund volume: Max. EUR 150 million

Investment volume: Max. 10% of fund volume (up to 5 million)

No “start-up”

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Equity

Shore Cap II, Mauritius Private Equity Fund Microfinance Sector

Fund Size: USD 80 million

Total Investment OeEB: USD 4.1 million

Aim of project:

Shore Cap II is a Private Equity Fund with the target to support MFIs and SBBs in Asia and Sub Sahara Africa via equity contribution to enable stable growth in theportfolio companies. Beside the equity injection the fund implemets capacitybuilding measures to improve governance structures and staff trainings in theinvestee companies.

With its first equity project OeEB was able to produce a link between an AP Project and an Equity investment.

Selected Equity Project

Commitments signed ˜ EUR 500 million

Total assets ˜ EUR 347 million

Operating profit for the year ˜ EUR 2 million

Profit for the year ˜ EUR 902.000

Staff 25

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Key Figures 2012

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Thank you!

Contact Details:

OeEBOesterreichische Entwicklungsbank AGStrauchgasse 31011 ViennaAustria

Tel. +43 1 533 12 00-0Fax +43 1 533 12 00-5252