Presentation of M. Creighton, Head of SACE Sub-saharan Africa

An Introduction to Sace

Michael Creighton – Sace Sub Saharan AfricaLuanda Angola, September 2009

SACE-International Network 2

Who are we

• The SACE Group is one of Italy’s leading actors in credit management.

• Covering risks in more than 150 countries, totaling approximately €46 billion.

• SACE SpA, a joint stock company, fully owned by the Italian Ministry of Economy and Finance.

• Strong financial position with € 5.9 billion of equity.

• SACE SpA has obtained an Aa2 rating from Moody’s.


Medium / long term credit insurance, political risk, reinsurance, investment protection and advanced financial solutions.

Medium / long term credit insurance, political risk, reinsurance, investment protection and advanced financial solutions.

Short-term insurance services both in domestic and foreign markets. Leader in the surety business, specifically in the construction industry.

Short-term insurance services both in domestic and foreign markets. Leader in the surety business, specifically in the construction industry.

The SACE Group


What we do

• Our core business is described as that of an Export Credit Agency.

• We are not a direct lender

• We have a range of products that can facilitate the raising of finance and….

• …. that can facilitate trade on an open account credit basis.


• Italian Exporters and their foreign subsidiaries.

• Italian contractors - bid, performance or advance payment bonds.

• African counterparties importing Italian products or working with Italian companies.

• Financiers of trade or projects involving Italian companies.

• Local government’s purchasing Italian Equipment or utilsing the services of Italian companies.

• Project Finance structures involving Italian companies or equipment purchased from Italy.

Our Target Market


Export credit (Supplier or Buyer)- Insurance of export credit, with the opportunity to ‘cash in’ Supplier’s Credit earlier by transferring insured credits to financial institutions.

LC Confirmation – Confirmation of LC’s issued by African banks to European banks, for the payment of goods imported from Italy.

Political Risk Insurance – Protects Italian investments against political risk – such as nationalisation, embargo or civil disorders – which may cause loss of the invested capital.

Equity Loan Cover - Guarantees on loans granted by banks for Italian investments abroad.

Bid/performance/advanced payment bonds - Issuance of Surety Bonds either directly or through banks / insurance companies counter-guaranteed by SACE.

SACE’s Products:


Product Example: Supplier Credit

Italian Company

African Buyer

Export of goods and services

Payment of exported goods

African subsidiary

Insurance policyInsurance policy


Product Example: Buyer Credit

Italian Company

African Buyer


Payment of exported goods

African subsidiaryBank

Insurance policyInsurance policyor or

Financial GuaranteeFinancial Guarantee

Repayment

Financing


Product Example: Support of LC Confirmation

Italian Company

African Buyer


Confirmation and Financing of Documentary Credit

Bank

(Italian or foreign operation in Italy)

Insurance policyInsurance policy

Issuance of LCPayment for the Payment for the

export of export of goods & servicesgoods & services

African Bank

(Operating for the African Buyer)

LC Request


Key Benefitsto the Borrowers

• Risk partner: acting as a risk taker and credit enhancer, SACE decreases the risk

• Flexibility: the new national interest programme widely extends the range of SACE eligible operations

• High visibility: SACE’s support is fully backed by the Italian Government

• Competitiveness: longer tenors and attractive all-in cost of funding

• Capacity provider: safeguarding of company’s investments and bank credit lines


SACE’s strategy in Sub-Saharan Africa

Johannesburg office, designed to meet a growing demand for support of exports and investments within the Sub-Saharan Africa region.

SACE supports transactions within the limitations on sovereign risk imposed by the International Monetary Fund and in the framework of responsible lending agreed by the G-7.

Strategic countries (limits in €):

South Africa Nigeria (100 Mn) Angola (100 Mn) Kenya (50 Mn, Max 5 yrs) Tanzania (50 Mn, Max 5 yrs) Mozambique (50 Mn, Max 5 yrs) Ethiopia (10 Mn, Max 5 yrs) Lesotho (10 Mn) Cape Verde (IMF limits) Madagascar (10 Mn)

Additional markets (limits in €):

Botswana Zambia (50 Mn, Max 5 yrs) Ghana (50 Mn, Max 5 yrs) Eritrea (10 Mn, Max 5 yrs)


Open with conditions, restrictions may apply according to: counterparts (i.e. sovereign) amounts (i.e. cap for country or single transaction) tenors (i.e. short, medium-long term)

SACE Terms of Cover

GH

AN

A

NIGERIA

NIGER

CHAD

CENTRAL AFRICAN REPUBLIC

S U D A N

CAMEROON

SA

O T

OM

É A

ND

P

RIN

CIP

E

GABON

CO

NG

O,

RE

PU

BL

IC

CONGO, DEMOCRATIC

REPUBLIC

BURKINA FASO

BE

NIN

TO

GO

COTE D’IVOIRE

LIBERIA

SIERRA LEONE

GUINEAGUINEA-BISSAU

MAURITANIA

SENEGALGAMBIA, THE

MALI

ETHIOPIA

KENYA

UGANDA

MALAWI

MOZAMBIQUE, REPUBLIC

M A

D A

G A

S C

A R

ZIMBABWE

BOTSWANA

SWAZILAND

LESOTHO

SOUTH AFRICA

NAMIBIA

ANGOLA

Z A M B I A

EQUATORIAL GUINEA

RWANDA

TANZANIA

DJIBOUTI

BURUNDI

ERITREA

SEYCHELLES

COMOROS

SOMALIA

MAURITIUS

CAPE VERDE

2005

2009

Implementing the Africa Programme: New Terms of Cover

Cover on case-by-case basis for:• co-financing with Multilaterals, local development banks and other ECAs• investments• non-credit risks

Open without restrictions


SACE’s activities in Sub-Saharan Africa

208

259281

0

50

100

150

200

250

300

2006 2007 2008

€ M

n

Sub-Saharan Africa exposure as at 31/12/2008

14,0%

0,3% 0,0% 1,0% 1,0%

15,0%

64,0%

5,0%

0%

10%

20%

30%

40%

50%

60%

70%

Angola Ethiopia Gabon Kenia Mauritius Nigeria SouthAfrica

Tanzania

Geographical mix as at 31/12/2008

New Guarantees in Sub-Saharan Africa

In 2008, SACE issued 21 new guarantees in Sub-Saharan Africa, The Region accounts for 2.6% of SACE’s new guarantees.

In 2009, SACE concluded new projects amounting to € 175 Mn. Other transactions for a total value of € 596 Mn are under negotiation.

SACE’s main operations: South Africa (64%), Nigeria (15%), and Angola (14%)


SACE in Sub Saharan Africa: highlights 2008


OTHER REPRESENTATIVES OVERSEAS

Moscow

Krasnopresnenskaja Naberejnaja, 12

123610 Moscow - Office n.1202

Tel. +7 49 52582155, Fax +7 49 52582156

Hong Kong

40/f Suite 4001 - Central Plaza 18, Harbour Road

Wanchai, Hong Kong

Tel. +852 36202323, Fax +852 36210227

Sao Paulo

Av. Pauista 1971 – 3° andar

01311-300 Sao Paulo

Tel. +55 11 31712138, Fax +55 11 32664051

REGIONAL OFFICES

Milan

Via A. de Togni, 2 - 20123 • Milano

Tel. +39 02 434499701, Fax +39 02 434499749

Modena

Via Elsa Morante, 71 - 41100 • Modena

Tel. +39 059 331201, Fax +39 059 820832

Turin

c/o ICE - Via Bogino, 13 - 10100 • Torino

Tel. +39 011 836128 - Fax +39 011 836425

Venice

Viale Ancona, 26 - 30172 • Venezia - Mestre

Tel. +39 041 2905111, Fax +39 041 2905103

HEADQUARTERS

Rome

Piazza Poli, 37/42 - 00187 • Rome

Tel. +39 06 67361, Fax +39 06 6736225

How to contact SACE

SACE SUB-SAHARAN OFFICE

please contact: Michael Creighton

Email: [email protected]

Chester Road, 42

2193 Parkwood Johannesburg

Tel. +27 11 8800020, Fax +27 11 8801019

Email: [email protected]

Documents

Presentation of M. Creighton, Head of SACE Sub-saharan Africa