VILNIUS JANUARY 26, 2012 - estcham.lt · 26-01-2012 · Projects presentation PPP Definition Stakeholders Major risks Agenda. SNC-LAVALIN AT A GLANCE HIGHLY SKILLED AND FLEXIBLE

PPPEXPERTISE AND PROJECTS

VILNIUS

JANUARY 26, 2012

Presentation of SNC-Lavalin Capital

Projects presentation

PPPDefinitionStakeholdersMajor risks

AgendaAgenda

SNC-LAVALIN AT A GLANCE

HIGHLY SKILLED AND FLEXIBLE LABOUR FORCE

Over 24,000 employees

Speaking some 60 languages

Representing some 80 nationalities

LOCAL EXECUTION, GLOBAL KNOW-HOW

100 years of evolution, experience, excellence

Ongoing projects in some 100 countries

International network established for over 40 years

Offices across Canada and in some 35 countries

ENGINEERING AND CONSTRUCTION EXPERTISE

Engineering

Feasibility studies

Planning

Detailed design

Contractor evaluation and selection

Project management

Construction management

Commissioning

Procurement

Financing

2010 REVENUES

� Presentation of SNC-Lavalin Capital

� Projects presentation

� PPP•Definition•Stakeholders•Major risks

SNC-Lavalin Capital is…

• An experienced investor:SL Capital oversees the development and management of investments in the context of projects developed as concessions and/or build-own-transfer type projects. We have a strong record of committing equity and raising financing.

• An integrated sponsor of public infrastructure:SL Capital’s multidisciplinary team of 30 experienced professionals with diversified expertise in the fields of investment, financial assessment and project financing combined with financial, accounting and engineering backgrounds allows SL Capital to adopt an integrated approach for the development of every stage of a Private-Public Partnership project.

• A seasoned debt-arranger: SL Capital maintains close interaction with financial institutions, export credit agencies, bilateral and multilateral organizations to obtain the most favorable financing terms for projects developed.

Investment

SNC-Lavalin Capital oversees the equity participations of the SNC-Lavalin Group in

infrastructure projects.

Objectives

To ensure that SNC-Lavalin’s funds are invested in projects, supported by a strong

business plan, that provide a strong positive outlook and create value for SNC-Lavalin shareholders;

To provide active support to all SNC-Lavalin divisions and their clients involved in

concessions, Public-Private Partnership (PPP), and all other types of projects involving the creation of a

single-purpose business unit to operate an infrastructure or industrial asset.

Investment Criteria - Framework of a prudent investor

Focused on feasibility and risk assessment;

Typically invests in a sole purpose limited liability company established for a specific project;

Limited market risks;

Non-recourse basis;

Liquidity of investment;

One or more exit options ensuring liquidity within 10 years;

Asset with good market for resale.

InvestmentInvestmentSNCSNC--Lavalin CapitalLavalin Capital

Fully independent and untied advisor;

Not affiliated with financial institutions;

Objective advice on financing structure, terms and loan documentation;

Strong multi-sourcing export credit financing expertise;

Significant advisory costs savings and optimized financial structure for the sponsors;

Extensive successful experience in working as co-advisor with leading international banks on large project finance transactions.

Industry leader with global presence;

Balanced and flexible revenue distribution;

Sound financial position;

Selective equity investments and concessions;

Consistent cash flow generation and net income growth ;

Consistently among top industry performers for profitability and return on shareholders’ equity.

Benefit as Advisor Value Added as Investor

SNCSNC--Lavalin CapitalLavalin Capital




SNC-Lavalin: Selective PPP’s in Canada

Okanagan Lake Concession PPP: Investment and financial advisor

McGill University Health Centre (MUHC) PPP: Investment and financial advisor

New Acoustic Concert Hall Investor (100%) and financial advisor

South East Stoney Trail Road PPP: Investment and Financial advisor

Canada Line PPP:Investment and co-financial advisor

Highway 407: Acquisition, modeling and advisor

Awards: Project Finance International PFI –Infrastructure Deal of the Year – Americas 2005Euromoney Project Finance – North American Transport Deal of the Year 2005

Awards: CCPPP Gold Award – 2010

North American Social Infrastructure Deal of the Year by Project Finance Magazine -2010

Award: Silver Award for Infrastructure, Canadian Council for PPP, 2008

Award: Project Finance Deal of the Year 1999

• Sector: Social Infrastructure

• Client: Quebec Minister of Cultures, Communication and Feminine Conditions

• Location: Montreal, Quebec

• Total Project Cost: CA $259 M

• SNC-Lavalin Capital’s Role: Investor and financial advisor

• Project Structure: Public-Private Partnership

• Financing Structure: Long-term private placement

• SNC-Lavalin’s Ownership: 100%

The project, a public-private partnership with Quebec Minister of Culture, Communication and Feminine Conditions (MCCCF), is a 29.2-year (2.2 years construction, 27 years operation) concession to provide design, construction, financing, operation and maintenance of the Acoustic Concert Hall of Montreal.

This new state of the art acoustic concert hall will house the Montreal Symphony Orchestra for up to 120 musicians and 2,100 seated spectators. Technical innovations and challenges are numerous as the concert hall has to achieve the highest acoustic standard possible (N-1).

Financial close and contract execution was achieved in April 2009. Construction of the concert hall began in May 2009 and is expected to be completed in the summer 2011.

Groupe immobilier ovation Groupe immobilier ovation

(OSM)(OSM)Projects presentationProjects presentation

In transit BCIn transit BC

(Canada line)(Canada line)Projects presentationProjects presentation

• Sector: Transport

• Client: Richmond-Airport-Vancouver Project Management Ltd. (RAVCO) and the Greater Vancouver Transportation Authority (GVTA)

• Location: Vancouver, British Columbia

• Total Project Cost : CA $1.9 B

• SNC-Lavalin

Capital’s Role: Investor and co-financial advisor

• Project Structure: Public-Private Partnership

• Financing Structure: CA $600 M long-term bank debt

• SNC-Lavalin’s Ownership: 33.33%

Awards : Project Finance International PFI –

Infrastructure Deal of the Year – Americas 2005

Euromoney Project Finance – North American

Transport Deal of the Year 2005

InTransit BC Limited Partnership signed a 35-year concession with Richmond-Airport-Vancouver Project Management Ltd. (RAVCO) and the Greater Vancouver Transportation Authority (GVTA) to design, build, partially finance, operate and maintain the Richmond-Airport-Vancouver (RAV) rapid transit line.

The RAV Line links Waterfront Station in downtown Vancouver to the airport and Richmond city centre. Completed since August 2009, the new transit line is a fully automated, driverless system that will use rotary-driven metro-type vehicles. It has 16 stations (eight underground, six elevated and two at-grade stations) as well as an operations and maintenance centre. InTransit BC, a limited partnership formed by SNC-Lavalin, British Columbia Investment Management Corporation (BCIMC) and the Caisse de dépôt et placement du Québec (CDPQ), will own and operate the Canada Line for 35 years and has subcontracted all engineering, procurement and construction (EPC) to SNC-Lavalin. InTransit also subcontracted the operation and maintenance to ProTrans BC Operations Ltd., a wholly-owned subsidiary of SNC-Lavalin.

Myah TipazaMyah TipazaProjects presentationProjects presentation

• Sector: Water

• Client: Algerian Energy Company

• Location: Algeria

• Total Project Cost: CA $177 M

• SNC-Lavalin Capital’s Role: Exclusive financial advisor

• Project Structure: Concession

• Financing Structure: US $145 M long-term bank debtUS $36M Equity Investment

• SNC-Lavalin’s Ownership: 25.50%

In consortium with Acciona Agua, SNC-Lavalin has signed a contract worth approximately US$150 million with Myah Tipaza for the engineering, procurement and construction of a 120,000 m3/day seawater desalination plant in the province of Tipaza, Algeria. Myah Tipaza is 51% owned by Algerian Water Investment (a company formed in equal partnership by SNC-Lavalin and Acciona Agua) and 49% by a publicly-owned Algerian economic enterprise, “Algerian Energy Company Spa”. Algérienne des eaux, an industrial and commercial public authority, and Sonatrach, a publicly-owned Algerian economic enterprise – two companies wholly owned by the Algerian Government – signed a 25 year concession with Myah Tipaza to design, build, finance and operate the seawater desalination plant,

and will purchase the water plant’s entire production as part of a 25-year “Take or Pay” water purchase and sale contract. SNC-Lavalin Capital acted as financial advisor to Myah Tipaza on the long-term, non-recourse financing, underwritten by Crédit Populaire d’Algérie (CPA) for 80% of the project’s value. Myah Tipaza shareholders will fund the remainder of the project by investing about US$35 million of the company’s capital stock.

Infrastructure Concession Investments

Held Concession Equity

Since Years Location Participation

Highway 407 108 km electronic toll road 1999 99 Canada (Ontario) 16.77%

InTransit BC rapid transit line 2005 35 Canada (B.C.) 33.3%Okanagan Lake floating bridge 2005 30 Canada (B.C.) 100.0%

TC Dome 5.3 km electronic cog railway 2008 35 France 51.0%Chinook Roads 25 km six-lane road 2010 33 Canada (Alberta) 50.0%

REPL 189 Km toll road 2010 30 India 36.9%

AltaLink regulated transmission lines 2002 indefinitely Canada (Alberta) 76.9% (3)

Astoria I 500 MW power plant 2004 indefinitely United States (N.Y.) 21.0%

Astoria II 550 MW power plant 2008 indefinitely United States (N.Y.) 18.5%Hadjret En Nouss 1,227 MW power plant 2006 indefinitely Algeria 26.0%

Ambatovy nickel and cobalt open-pit mine 2007 indefinitely Madagascar 5.0%Groupe Ovation concert hall for the MSO 2009 29 Canada (Quebec) 100.0%

Malta Malta Airport 2002 65 Malta 15.5%MUHC McGill University Health Centre 2010 34 Canada (Quebec) 60.0%

Myah Tipaza seawater desalination plant 2008 indefinitely Algeria 25.5%SEVE (Vatry) cargo airport 1999 21 France 51.1%

Highways, Bridges & Rail

Power

Others




PPP PPP --

DefinitionDefinition

� Project finance focuses on the prospects of the project to generate cash flows during operations and its capacity to repay the loan as opposed to an analysis of the credit of the sponsors;

� Project finance is therefore generally referred to as limited recourse financing and is the most widely used form of financing for public and private infrastructure projects.

� Limited recourse financing

PPP PPP --

DefinitionDefinition

� PPP means certainty:

• The project cannot move forward unless:

• All contracts are in place;

• Sponsors have provided their unconditional commitment to provideequity and other guarantees;

• Lenders have provided their unconditional commitment to provide financing (mainly depends on the above conditions, but not only).

• All costs are included in the financial model at financial close.

� Cost of financing of private sector reflects risk allocation to Project Co. (this point is often overlooked when comparing private sector and public sector funding cost in PPP vs conventional –type

� Financing must be secured before any design-construction work can start.




Project organizationProject organization

PPP PPP --

StakeholdersStakeholders

ProjectCo-Single purpose entity created by the Sponsors-Non-recourse entity to the Sponsors (most riskstransferred to subcontractors)

Equity /

Equity-like

Limited Recourse Debt

Project Agreement

DB Contract Service Contract

Sponsor- Developers, alone or in partnership;- Role : to invest resources and money into the project; to bring all stakeholders together and get the deal done;-Different investment style and multiple roles

Debt Providers

Banks, Life insurance companies,

Bond underwriters, …

AuthorityManages the tender process : RFQ / RFP,Description of the project specification…

DB ContractorDesign & Build of the asset according to the specification in Projet Agreement

Operator- Operation & Maintenance of the asset in accordance with the specifications / - Key Performance Indicators of the PA

Financial Advisor-Selection of other advisors-Funding competition-Financial modeling-Assistance in closing







Example of risks allocationExample of risks allocation

1 – Design risks2 – Permits risks3 – Construction risks4 – Completion risks5 – Operating risks6 – Major Maintenance /

Rehabilitation risks7 – Revenue risks/

Availability risks8 – Legal and regulatory risks9 – Compensation

on termination

ProjectCo

Authority

Debt Providers

Design-Build Constructor

Service Provider

12 3

45

6

7Security Package

Service Contract

Security Package

Risk transfer via the Project Agreement

Assignment of

Security package

DB Contract

PPP PPP --

Major RisksMajor Risks

8

Risk allocation may vary depending on projects.

Risk is allocated where it creates best value for money to the Authority (e.g. legal risk can be shared between Project Co. and the Authority, archaeological risk, force majeure, etc.).

91 23 45 67 8

WE CARE embodies SNC-Lavalin’s key corporate values and beliefs. It is the cornerstone of everything we do as a company.Health and safety, employees, the environment, communities

and quality: these values all influence the decisions we make every day. And importantly, they guide us in how we serve our clients and therefore affect how we are perceived by our external partners. WE CARE is integral to the way we perform on a daily basis. It is both a responsibility and a source of satisfaction and pride by providing such important standards to all we do.

WE CARE about the health and safety of our employees, of those who work under our care, and of the people our projects serve.

WE CARE about our employees, their personal growth, career development and general well-being.

WE CARE about the communities where we live and work and their sustainable development, and we commit to fulfilling our responsibilities as a global citizen.

WE CARE about the environment and about conducting our business in an environmentally responsible manner.

WE CARE about the quality of our work.

Documents

VILNIUS JANUARY 26, 2012 - estcham.lt · 26-01-2012 · Projects presentation PPP Definition Stakeholders Major risks Agenda. SNC-LAVALIN AT A GLANCE HIGHLY SKILLED AND FLEXIBLE