ICIEC – Enabling Trade

May 2016

• ICIEC in Brief

• Products & Services

• Focus on Indonesia

•Selected ICIEC Experience

Agenda

2

ICIEC in Brief

Islamic Development

Bank (AAA Rated)

ICIEC

Shariah Compliant Export Credit &

Investment Insurance

IRTI

Research in Islamic Finance

ICD

Private Sector Development

ITFC

Islamic Trade Finance

3

ICIEC’s Mandate

Export Credit Insurance

Member

Countries

To encourage exports from Member Countries to the rest of the World

Investment InsuranceTo Encourage the Flow of Capital and Investments

from the Worldto Member Countries

Member

Countries

Provide Export Credit Insurance solutions to suppliers of Capital Equipment, Essential Commodities and Food Security Related Items to Member Countries

4

1. ALBANIA2. BANGLADESH3. BRUNEI4. INDONESIA5. IRAN6. KAZAKHSTAN7. MALAYSIA8. PAKISTAN9. TURKEY

9 ASIAN/ EUROPEAN Countries

1. BENIN2. BURKINA FASO3. CAMEROON4. CHAD5. COTE D’IVOIRE6. DIJBOUTI 7. GABON8. GAMBIA9. GUINEA10. MALI11. MOZAMBIQUE12. NIGER13. NIGERIA14. SENEGAL15. UGANDA

15 AFRICANCountries

Member Countries

1. ALGERIA2. BAHRAIN3. EGYPT4. IRAQ5. JORDAN6. KUWAIT7. LEBANON8. LIBYA9. MAURITANIA10. MOROCCO11. OMAN12. PALESTINE13. QATAR14. SAUDI ARABIA15. SUDAN16. SYRIA17. TUNISIA18. U.A.E19. YEMEN

19 ARAB Countries

5

Eligibility criteriaForeign Direct

Investment

Imports of essential commodities,

strategic goods and capital equipment

ShariahCompliant

Exports

ICIEC Member Country

ICIEC is the Only Multilateral Export Credit andPolitical Risk Insurer in the World

6

Co

rpo

rate

s

• Export

Credit

Solutions

• STP & CSTP

Fin

an

cia

l In

stit

uti

on

s

• Risk

Mitigation

Instruments

• DCIP, BMP

and NHSO

Inv

est

ors • Investment

Protection

Tools

• Equity, Loan

Guarantee

and Breach

of Contract

Ex

po

rt C

red

it A

ge

nci

es

• Capacity

Enhancement

Assistance

• Inward

Reinsurance

and Fronting

Agreements

ICIEC product range

7

Export Credit Insurance Solutions for

Exporters

• Used for single risk export/import contracts• Flexible on coverage amount (subject to reinsurance support)• Can be used to cover pre-shipment risk

Specific Transaction Policy

• For recurring export transactions/covering whole turnover of exporter• Credit period can be up to 720 days• Competitive flat premium rate

Comprehensive Short Term Policy

8

• Export Credit Insurance (ECI) protects the balance sheet against non-payment of export receivables

• Provides protection against credit and political risks in buyer country

• Enables access to liquidity through Loss Payee mechanism

• Protects contractors against contract frustration risks, and unfaircancellation of contracts

• Allows exporters to be competitive by offering extended payment toterms to overseas customers

Benefits to Exporters

9

101010

Exporter Buyer1

42

6

3

1. Sale Contract between Exporter &Buyer

2. Exporter enters into an Insuranceagreement with ICIEC, to cover Buyer’sNon-payment Risk

3. Exporter discounts ICIEC policy withDiscounting Bank, receives financing

4. On failure of buyer to pay, exportersubmits claim,

5. ICIEC indemnifies Discounting Bank forup to 90% of contract value

6. ICIEC recovers arrears from buyer,returns 10% share to Exporter/Discounting Bank

5

Discounting Bank

How it works

Risk mitigation solutions for

investors

• Equity: Policies to protect against various political risks of investment

destination

• Breach of Contract: Protection against non-honoring of obligations related

to contracts with government entities, examples include off-take

agreements and PPA

• Non-honoring of Sovereign Obligations: Used to cover default risk of

Member Country government/GRE project finance borrowings

Foreign Investment Insurance Policies:

11

• Protecting balance sheet against losses due to non-commercial reasons

• Attracting additional project capital

• Ability to access relatively high risk markets

Benefits to investors

12

Focus on Indonesia

• UNCTAD’s World Investment Report ranked Indonesia 14th out of the

Top-20 FDI recipients in 2013-2014

• This makes the country the #1 Destination out of all OIC countries for

FDI Inflows in the referenced period

• Indonesia also ranks as the 14th most attractive country (and the #1

OIC country) for Investment attractiveness in a survey of Multinational

Enterprises by UNCTAD

13

Focus on Indonesia

• The GoI aims to spend IDR 5,400tn oninfrastructure in 2015-19, of which~70% needs to be financed by theprivate sector

• To support FDI, GoI has launched aseries of deregulation packages aimed atcutting red tape, simplifying regulations,and improving the investment climate

• As the accompanying chart shows, thestrong policy support has led to FDIcontinuing to remain strong in 2015

Source: Standard Chartered Bank

14

Focus on Indonesia

• Besides traditional sectors like Mining and Power, Indonesia offerssignificant opportunities in sectors like Logistics and Healthcare…

Source: Standard Chartered Bank

15

Focus on Indonesia

• And the Investmentpolicy of the GoIcontinues to evolve ina business-friendlymanner, with moreindustries beingopened up for ForeignInvestorParticipation…

16

Focus on Indonesia

• With Indonesia’s GDP set to continue to grow strongly, the country presents anexceptional opportunity for investors from other OIC Member Countries

• Export Credit and Foreign Investment Insurance should be an essential part of aninvestors toolkit when entering unexplored markets…

17

SELECTED ICIEC EXPERIENCE

18

Enabling Member Countries Attract International Capital - UAE

Sovereign Guarantee

Insurance Policy – USD 50 mil

Al Sufouh Tram Project, Dubai, UAE Department of Finance, Dubai, UAE

European Bank

Financing Facility

Transaction Profile

• Covered Parties: European Bank

• Cover Against: Non-honoring of

payment guarantee by the Department

of Finance, Dubai

• Insurance Duration : 12 Years

• Percentage of cover: 95%

• Investment Value : USD 100 mn

• ICIEC Covered amount : USD 50 mn

• Status : Completed Successfully

19

Enabling Long-term Supplier Credit in Ethiopia

Opens LC in favor of ICIEC Client

Discounts Policy, receives non-recourse funding

80% Risk Ceded

Transaction Profile

• Contract: Supply of cables & transformers

• Tenor : 7 years

• Payment terms: Equal quarterly installments, after 1 ½ years

grace; LC from Commercial Bank of Ethiopia

• ICIEC cover: Against default on documentary credit

• Status: Currently underway

Ethiopian Electric Power Company

International Reinsurers

Discounting Bank

Commercial Bank of Ethiopia

USD 75 mn PolicyExport of Cables & Transformers

7 Year Supplier Credit

Exporter

20

Enabling Contractors in ICIEC Member Countries

Contract

USD 25 million Cover against FEWA’s

non-payment

Aquatech

GhalilahSWRO Plant

EPC

FEWA

Transaction Profile

• Contract: EPC Contract for Ghalilah SWRO

Plant

• Sponsor: FEWA

• Tenor: 2 Years

• Credit Limit: USD 25 mn

• ICIEC Cover: Against default by FEWA on

payment obligations to Aquatech

• Status: Completed Successfully

21

Thank You!

For more information please visitwww.iciec.com

22