ismed training: ppps in egypt's river transport_erbd
DESCRIPTION
Presented at the Training Session on Public Private Partnerships organised by the MENA-OECD Investment Security in the Mediterranean (ISMED) Support Programme in September 2014.TRANSCRIPT
OECD EU Conference – River Nile Transport
Cairo, 17th of September 2014
Philip ter Woort, EBRD Director Egypt
What is the EBRD?
• IFI: Promotes transition to market economies in 34 countries
• Owned by 64 countries and two inter-governmental institutions
• AAA rated - capital base of €30 billion
• Invested EUR 85 billion through 3945 projects
Projects in all key business sectors
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Transport
Industry, Commerce & Agribusiness
Financial Institutions
Manufacturing & Services
Municipal & Environmental Infrastructure
Power & Energy
Natural Resources
Property & Tourism
Telecommunications, Informatics & Media
Transport Team at EBRD
• Transport Team is part of EBRD Infrastructure Business Group with over 30 banking and sector professionals
• Deep experience: Executed 240 projects for a total project value of EUR 43.6 billion
• Headquartered in London with dedicated sector coverage bankers in Astana, Istanbul, Kiev and Moscow
• Transport Team can mobilize dedicated in-house specialists to support project needs, including procurement, improvement of environmental standards and energy efficient solutions
• EBRD offers banking services (debt and equity) to clients across every transport mode: railways, maritime, aviation and roads
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EBRD’s presence in Transport Sector
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Portfolio by Region Portfolio by Sector
The Bank supports the development of efficient multimodal networks, investing a total of EUR 11.4 billion as of end June 2014 across all sectors and regions to support 245 projects
Central Asia 9% 27 projects/
€ 1.0 bn Central Europe and
Baltics 20% 56 projects/
€2.2 bn
Eastern Europe and Caucasus 18%
51 projects/ €2.1 bn Regional 2%
4 projects/ €0.2 bn
Russia 21% 41 projects/
€2.5 bn
SEMED 1% 1 project/ €0.1 bn
South-Eastern Europe 26% 58 projects/
€3.0 bn
Turkey, 3% 7 projects/
€0.3 bn Aviation 6% 38 projects/
€0.7 bn Intermodal 4% 10 projects/
€0.4 bn
Ports and Shipping 6% 47 projects/
€0.7 bn
Rail 34% 73 projects/
€3.9 bn
Road 50% 77 projects/
€5.7 bn
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PPP: What are the models?
Degree of Private Sector Involvement
Deg
ree
of P
rivat
e S
ecto
r Ris
k
Public Sector
Service Contracts
Management Contracts
Design-Build
Operational Concession
Design-Build-Operate-Maintain
Design-Build-Finance-Operate
Build-Operate-Transfer
Build-Operate-Own
Privatisation
Realm of PPPs
Adapted from P. Livesly
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PPP: Issues to consider
Project essential ?
Political will may endure over long-term for essential infrastructure and related services
Value for Money ?
Risk-adjusted cost of the proposed PPP project should be lower than by traditional public procurement means
Does private sector has expertise?
Private sector should be able to deliver the PPP and is willing to come to the market
Size matters PPP transition costs are relatively high so that a project must be of a certain size to off-set the preparation costs (i.e. legal, technical, financial)
Contract designs
Allow a level of flexibility through ‘reference designs’ allowing private sector the creative ‘space’ to come up with new solutions
EBRD support to PPPs
With public authorities
• General advice on acceptable process
• EBRD Policy for procurement
• Grant funded technical assistance
• General letter of interest to finance
With bidders
• Pre-bidding dialogue with interested players
• Review of financing instruments (equity, debt) and indicative financing terms
• EBRD cannot commit to exclusivity (‘open support’) – general letter of interest
• After award, negotiation of detailed terms and conditions with the preferred bidder
Case Studies
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Case Study R1 Motorway Refinancing, Slovakia
Client: Granvia, a special purpose vehicle owned by VINCI Concessions SA and Meridiam Infrastructure Fund
EBRD finance: EUR 200 million
Type of finance: Project Bond
Total Project cost: EUR 1,243 million
Year: 2013
Project description: Refinancing of the R1 Motorway PPP project
Impact: Optimising the long-term financing of newly constructed sections on the R1 Motorway PPP between Nitra and Tekovske Nemce and the Banska Bystrica Northern Bypass, totalling 51.6 km
Fostering economic development in central Slovakia through provision of private sector engagement in road sector financing
The project demonstrates EBRD engagement as a long term partner in support of the Slovakian Government’s PPP programme, following on from the successful construction and operational start of the R1 Motorway.
Industry Recognition 2013 PFI Award 2013 - Bond Deal of the Year – Europe
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Case Study Eurasia Tunnel, Turkey
Client: ATAS, a joint stock company incorporated in Turkey
EBRD finance: USD 150.0 million
Type of finance: Senior Loan
Total Project cost: USD 1.2 billion
Year: 2012
Project description: Design, finance, build, operate and transfer concession for the road tunnel under the Bosphorus (Istanbul Strait Road Tube
Impact: Fostering expansion of private sector participation in the development, management and operation in the transportation sector in Turkey
Relieving traffic congestion within the city of Istanbul and region by reducing journey time and distance between and Göztepe significantly, with the subsequent positive impact the climate change and local environment
The project forms part of a larger PPP transport sector programme under consideration by the Turkish authorities aimed at upgrading and modernising the transport network using private sector funding.
Industry Recognition 2012 Project Finance International – Turkish Infra Deal of the Year Euromoney Project Finance – European Deal of the Year
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Case Study WHSD Central Section Road PPP, Russian Federation
Client: Northern Capital Highway, a special purpose company selected develop and operate the WHSD road PPP in St. Petersburg
EBRD finance: EUR 200.0 million
Type of finance: Senior Loan
Total Project cost: EUR 3,128.0 million
Year: 2012
Project description: Construction of the central section of WHSD road and tolling, operation and management of the full length of the road (46 km) under a 30 year concession agreement
EBRD non-financial contribution:
Environmental due diligence gap analysis
Active Lender participation
Impact: Supporting the development of the first large road PPP awarded to a private sector concessionaire under a regional framework in Russia
The project will relieve pressure on the road network; the main transportation hub to the national motorway network, improving road access to the port and as such supporting increasing cargo traffic in and out of the country
The project supports the continuation of the PPP road programme planned by the City of St. Petersburg Authorities to develop and expand the road transportation network. The investment is a priority national infrastructure investment in Russia.
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Case Study Istanbul Ferries Privatisation, Turkey
Client: TASS, a special purpose company, established by three Turkish companies (Tepe, Akfen, Sera) and the UK’s Souter Investments acquire IDO, the world largest municipal ferry operator, 50 million passengers p.a.
EBRD finance: USD 150 million
Type of finance: Limited recourse; mandatory cash sweep; USD 100 million - long term senior loan, sculptured repayments USD 50 million - mid-term junior loan, bullet repayment
Total Project cost: USD 860 million
Year: 2011
Project description: Financing acquisition of IDO by TASS
EBRD non-financial contribution:
Upfront environmental due diligence
Active Lender participation on the structuring
Impact: Demonstration effect of the private sector value-added: introduction of new demand-driven ticket tariffs, creation of routes and intermodal passenger transportation services
Flexible financing structure with a sufficient grace period which allowed the sponsors to introduce measures to turnaround the company
Introduction of a gender action plan as a tool for inclusiveness The project assists in increasing private sector participation in the public transport sector in Turkey.
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Client: TAV Ege Terminal Yatirim, a special purpose company established TAV Havalimanlari Holding A.Ş, to design, build, finance and new domestic terminal for the Izmir Adnan Menderes Airport
EBRD finance: EUR 70 million
Type of finance: Senior loan
Total Project cost: EUR 430 million
Year: 2012
Project Construction of a new domestic terminal at Izmir airport, and of this domestic terminal together with the international terminal
Impact: Demonstration effect of successful restructuring with the of the latest airport operations policies, passenger screening security arrangements
Expansion of private sector participation in terms of provision of capital as well as project management, construction and expertise
The project supports the involvement of the private sector in the provision of public services, in particular where the Bank is additional to fill funding gaps for infrastructure projects and including active participation in financing PPP projects.
Case Study TAV Ege Terminal, Turkey
