ebrd in latvia · ica, 6.0 regional, 44.3 power and energy, 104.7. cumulative business volume in...
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RigaMarch 2012
© European Bank for Reconstruction and Development 2010 | www.ebrd.com
EBRD supporting cross-border activities of
Czech companiesEBRD in Latvia
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What is the EBRD
AAA/Aaa rated multilateral development bank
Founded in 1991
Owned by 62 shareholders – 60 states, EU and EIB
Invested over €71 billion in more than 3,600 projects since 1991
Record year in 2010 - €9.0 billion invested in 386 projects
In 2011 €9.0 billion in 380 projects 77% in the private sectorDebt 85% and Equity 15%
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1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Ann
ual b
usin
ess
volu
me
(AB
V)
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5
10
15
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25
30
35
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45
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55
60
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70
Net cum
ulative business volume
Debt ABV Equity ABV Net Cumulative Business Volume
Note: Provisional data as at 30th June 2011
€ billion
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Annual Business Volume 2011 by Region
Russia33%
Central Europe & Baltics
15%
Turkey10%
Central Asia5%
Eastern europe & Caucasus
20%
South-Eastern Europe
17%
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A network of 33 offices in 29 countries More than half our bankers based in the region
Where we operate
** Expansion of the Bank’s region of operations to include Southern and Eastern Mediterranean, initially Egypt, Morocco, Tunisia and Jordan
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How EBRD adds value
Private sector focused
Wide product range, currency, tenors, innovative financing programmes
Local presence in almost all countries of operations, detailed understanding of local business environment
Involved in policy dialogue with regard to regulatory, investment and policy matters
Work with locally owned companies as well as cross border investors
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EBRD in the Baltics
Annual Business VolumeBaltics 1999 - 2011
0
50
100
150
200
250
€mill
ion
Lithuania 64 108 83 5 26 52 19 21 31 0 29 99 2
Latvia 32 49 34 9 37 3 27 0 21 0 115 104 19
Estonia 49 57 24 73 27 23 8 0 11 1 28 8 20
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
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EBRD and Latvia (1)
Results of active operation
• EBRD closed its office in Riga at the end of 2007, but has remained engaged here.
• Since 1991 EBRD invested EUR 572 million in Latvia in 76 projects of total project value EUR 1.88 billion
• 65 % of the investments have been in the private sector
• Current portfolio represents EUR 271 million in 6 projects with Latvian entities (and 23 regional projects having allocations into Latvia)
• EBRD has invested through equity funds in Latvian 19 companies and is still invested in 8
Portfolio Distribution, €million
Financial Institutions,
100.2Infrastructure,
16.5
ICA, 6.0
Regional, 44.3
Power and Energy, 104.7
Cumulative Business Volume in Sectors
Infrastructure26%
Power and Energy15%
ICA20%
Financial Institutions
39%
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EBRD and Latvia (2)
EBRD prepared to
• Enhance capital investment
• Help develop more technology and skill-intensive products
• Support export-oriented manufacturing and cross border investments
• Finance renewable energy generation
• Strengthen the stability of the financial sector
• Support the development of private equity financing
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EBRD Financing Solutions
• Senior, subordinated, convertible
• Long Term • Working capital• Floating/ Fixed interest
rates• Major currencies and
some local currencies (e.g. Romania, Russia, Poland)
• Political risk guarantees
• Common/preferred shares
• Mezzanine financing• Exclusively minority
participations (up to 35%)
• “Portage Equity”
• In-house syndication unit
• Lender of record• EBRD’s Preferred
creditor status attracts other financiers
99
Syndication EquityLoans
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Financing requirementsFinancing requirements How to obtain finance?How to obtain finance?
EBRD Key Financing Requirements
Ensure appropriate returns by carefully assessing the risks: Management strength and strategyClear business plan and project costsTransparency of operationsDisclosed identity of final shareholders and corporate structureIdentified and limited tax liability riskRecourse to subsidiaries generating profits and holding assets
Ensure appropriate returns by carefully assessing the risks:Management strength and strategyClear business plan and project costsTransparency of operationsDisclosed identity of final shareholders and corporate structureIdentified and limited tax liability riskRecourse to subsidiaries generating profits and holding assets
Provide EBRD with an overview of proposed investmentCommitment to cooperation
clarify role of EBRDmandate to initiate transactionmutual understanding of corporate integrity issues
Project / business plan, market analysis, strategy, ownership structure, financial analysis, risk assessment Exit strategy
Provide EBRD with an overview of proposed investmentCommitment to cooperation
clarify role of EBRDmandate to initiate transactionmutual understanding of corporate integrity issues
Project / business plan, market analysis, strategy, ownership structure, financial analysis, risk assessment Exit strategy
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Examples of Cross Border Investments within the EBRD Region
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E Energija into Latvia and Ukraine
• Client: E Energija, a Lithuanian, privately owned multi-utility energy company providing heat and hot water services to residential and industrial customers in Lithuania and Latvia
• EBRD Finance: €5 mn equity and €15 mn debt
• Use of Proceeds: To support the company’s expansion in Ukraine and energy efficient investments in Latvia and Lithuania
• EBRD Added Value: country knowledge, local presence, risk sharing (equity), policy dialogue
Signed in 2011
Signed in 2007
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VMG into Belarus
•Sponsor: Vakaru Medienos Grupe, a Lithuanian privately owned wood- processing company with a long history of co-operation with IKEA
•EBRD Finance: Senior loan of €19.5 million and subordinated loan of €6.5 million
•Use of Proceeds: To finance the development of a green-field, integrated wood processing complex in Mogilev FEZ
• EBRD Added Value: Political, encouraging FDI into Belarus, needed maturities not available in commercial market, subordinated feature
•Associated TC: Energy audit and a ‘Belarus Forestry Sector Study’Signed in 2011
Signed in 2011
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SBA into Belarus
• Client: Mebelain, a wholly owned subsidiary of Lithuanian SBA Furniture Group
• EBRD finance: Senior loan of €5 million
• Use of proceeds: to finance a green-field veneer-faced furniture plant in Mogilev FEZ
• EBRD Added Value: Political, encouraging FDI into Belarus, needed maturities not available in commercial marketSigned in 2012
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Graanulinvest into Latvia
Client: Graanulinvest is an Estonian privately owned pellet producer
Project description: Construction of two CHPs adjacent to the company’s pellet plants in Helme and Launkalne and energy efficiency investments in the pellet plants
EBRD Finance: A loan of €34 million, maturity 12 years
EBRD Value Added: long maturity, supporting renewable energy and a privately owned energy producer in Estonia and Latvia
Signed in 2011
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Eskaro into Russia and Ukraine
Signed in 2011
Client: Regional manufacturer of architectural coatings (paints and varnishes) with plants in Estonia, Russia, Ukraine, Belarus and Finland
Project description: Construction of new distribution centres in Russia and Ukraine;completion of a new manufacturing plant in Ukraine;
EBRD Finance: Equity investment of €1.25million and mezzanine loan of €4.75 million
EBRD value added: Supporting further regional expansion into the CIS of an originally Estonia-based company and strengthening of environmental standards in particular in the CIS
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Trade Facilitation Programme
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EBRD Trade Facilitation Programme - TFP
EBRD supports trade by providing
• guarantees that cover risks arising from trade finance transactions
• short-term advances/financing to banks in the Countries of Operation for trade finance purposes
• TC funded trade finance training and advisory service to local banks
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TFP - Two Main Components
Trade Facilitation Programme(EUR 800 million framework)
Trade Finance Guarantee
Facility(fully operational
since 1999)
Trade Finance Cash
Facility(launched in 2000)
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BuyerSeller
Banking InstrumentBanking Instrument
ApplicationConfirmation
EBRD issues a Stand-By Letter of Credit covering the risks of Issuing Bank
towards the Confirming bankObligation Issuing
Bank,Country of Operation
Obligation Receiving Bank,
World Wide
UnderlyingTrade Transaction
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TFP – Cash facility
Local Company
Local Bank (EBRD’s borrower)•Takes local company risk
•Borrows from EBRD•On-lends to the local company
EBRD•Takes local bank risk
•Lends to the local bank againstsub-loan reports
Loan repayment Loan disbursement
Repayment to EBRD EBRD’s disbursement
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Trade Facilitation Programme in numbers
•• Active Issuing banks: 102Active Issuing banks: 102•• Confirming Banks: 800+ in 77 countriesConfirming Banks: 800+ in 77 countries•• Since 1999, more than 11,600 transactionsSince 1999, more than 11,600 transactions•• Supporting Supporting €€7.8 billion trade volume and 7.8 billion trade volume and •• Effectively covering Effectively covering €€7.1 billion worth of trade finance.7.1 billion worth of trade finance.
LatviaLatvia in particularin particular:
–– 24 export transactions from and via Latvia totalling 24 export transactions from and via Latvia totalling €€ xxx millionxxx million
–– 3 Latvian Confirming Banks (as of January 2012)3 Latvian Confirming Banks (as of January 2012)
SEBSEB
SwedbankSwedbank
UnicreditUnicredit
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Contact details:
Viesturs BernansPhone: +370 5 2638502E-mail: [email protected]
Matti HyyrynenHead of BalticsPhone: + 370 5 2638480Fax: + 370 5 2638481E-mail: [email protected]