1. BRBC Programme
December 17, 2012
• Welcome by Mr. Johan Vanderplaetse, General Director Emerson Russia
• Economic highlights of the last months, Mr. Trouveroy, Ambassador
• Activities of the EBRD in Russia, Mrs. Anna Tokarz, Senior Banker and Mr.
Bruno Balvanera, Head of Regional development
28/12/12

2. EBRD, your strong partner in Russia
Bruno Balvanera, Head of Regional Development
Anna Tokarz, Senior Banker, Industry, Commerce & Agribusiness
Belgium Embassy
December 2012
© European Bank for Reconstruction and Development 2012 | www.ebrd.com

3. What is EBRD?
European Bank for Reconstruction and Development
International Established in 1991 and owned by 63 countries
Financial Institution and 2 inter-government institutions (EU and EIB)
To foster the transition of 30 countries* from
Development
Central and Eastern Europe to Central Asia
mandate
towards open market-oriented economies
Largest investor in Since 1991 signed EUR 72bn of investments in its
the region countries of operation
Solid financial
Capital base of EUR 30bn with AAA/Aaa rating
position
*In addition to these 30 countries, the process of granting Egypt, Jordan, Morocco and Tunisia “potential recipient country” status is
well underway.
3

4. EBRD’s objectives achieved through
financing mainly the private sector
We have invested:
over €71.1 billion in more than € billion
3,389 projects since 1991
12 70
€9.0 billion in 386 projects in 2010
65
60
10 €9.1 billion in 380 projects in 2011:
55
–72% in private sector
Annual business volume (ABV)
50
Net cumulative business volume
8 –Debt 82% & Equity 18% 45
40
6 35
30
25
4
20
15
2
10
5
0 0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Debt ABV Equity ABV Net Cumulative Business Volume
4

5. Key Strengths of EBRD
Institutional Operational
 Strong, internationally recognised  Extensive knowledge of local economy,
financial partner with business environment and practices with
long-term perspective local presence
 Close working relationships with  Engaged minority partner for business
governments
 A business partner who shares risks,
 Political leverage thanks to unique including political
mandate and shareholders
 Catalyst to access additional equity, debt
 Work closely with market sources of and trade finance
capital to fill “market gaps”
 Provides finance to both private and
 Preferred Creditor Status (exempts public sector clients
from payments moratoria)
 Highest standards for corporate
 AAA rating governance and compliance
5

6. EBRD Countries of Operations
6

7. Russia is the largest Country of Operations
~ 1/3 of EBRD business volume
3 25
bn
€20.6 bn in > 700 successful transactions since 1991
Net cumulative business volume (NCBV), €
2.5
bn
20
€2.9 bn in 2011, 27% growth yoy
Annual business volume (ABV), €
2
15
1.5
10
1
5
0.5
0 0
'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11
ABV NCBV
7

8. Strategic Directions in Russia
Energy Efficiency across all sectors
Modernization & Diversification of Corporate Sector
Infrastructure improvement: transport, municipal, energy
Support of Small and Medium Enterprises
Local Capital Markets and Equity
Knowledge Economy and Innovation
8

9. EBRD’s Key Priorities in Russia
Improve Energy Efficiency and Sustainable Use of Energy
Improve Energy Efficiency and Sustainable Use of Energy
Medium Size and
Medium Size and Closing the
Closing the Capital Markets and
Capital Markets and
Larger Companies
Larger Companies Infrastructure Gap
Infrastructure Gap Financial Intermediaries
Financial Intermediaries
 Promote regional growth  Reduce transport  Develop domestic investor
bottlenecks and ensure base, deepen domestic
 Support modernisation flow of goods and capital markets
and diversification of people
industries  Support banking sector,
 Improve municipal encourage diversification,
 Build investor infrastructure capitalisation, risk taking
confidence and foster capacity
transfer of technologies  Modernise power
generation and remove  Foster corporate standards
 Support FDI electricity transmission and institutional
bottlenecks improvements
9

10. Projects Across Sectors in Russia
Corporate – 40% Financial institutions – 26%
26%
40%
14%
Infrastructure – 20% Energy – 14%
20%
84%
private sector
investments
*The Bank does not finance defence-related activities, the tobacco industry, selected alcoholic products, substances banned by
international law and stand-alone gambling facilities
**As of February 2012
10

11. EBRD Financing Solutions
Debt Equity Trade finance
Size EUR 10-250m
Term 5-7 (up to 12) years Typically from 3-7 years 1.5-2 (up to 3) years
Currency Rubles and major foreign currencies
Finance up to 35% of
Usually up to 20% Mainly through Trade
Approach the project (60% with
share, minority stake Facilitation Programme
syndication)
► Senior, subordinated ► Portage equity ► Import/export operations
Options or convertible finance ► Pure guarantees, cash
► Floating or fixed rates ► Risk equity advance trade finance
► Greenfield or Brownfield ► Issues to international
► Modernisation and energy efficiency banks
Applications
► Acquisition and consolidation ► Takes the risk of
► Privatisation transactions of local banks
Exact terms depend on specific needs and market conditions
11

12. EBRD Value Added
For Russian Companies For Foreign Companies
 Support goals of business and  Solid local expertise
shareholders
 Local offices in each region
 Flexible financing (tenors and
 Problem resolution experience
currencies)
 Long-term reliable partner  Preferred creditor status
 First step to access  Market intelligence
international markets  Knowledge of local business
 “Stamp of Approval” community
12

13. Working with Foreign Investors in Russia
Companies from France
which countries Other 15%
invest most? 18%
Austria
5% USA
Sweden 14%
5%
Finland
27% 5%
of all EBRD volume of Turkey
Germany
investments in Russia 6%
Japan 13%
are made with a foreign Italy
sponsor 7%
12%
13

14. FDI Support Across Industries
What industries Other Financial
13% Institutions
get most Municipal
(without funds)
Infrastructure
investments? 3%
17%
Forestry &
Paper
6% Auto & Special
Equipment
13%
Transport &
Aerospace
9%
65% Natural
Agriculture &
Food Production
Resources & 11%
of EBRD volume of Energy
investment with FDI are Construction &
9% Real Estate &
Building
going to the industries Retail
Materials
sector 10%
9%
14

15. We support FDIs in the regions
Top Regions where EBRD supported FDI
outside Moscow and St. Petersburg Regions: 27%
▲ Kaluga
of all EBRD volume of
▲ Nizhniy Novgorod
investments in Russia
▲ Rostov
are made with a foreign
▲ Novgorod sponsor
▲ Vologda
▲ Tatarstan
▼St. Petersburg 65%
of EBRD volume of
▼ Moscow investment with FDI are
going to the industrial
sector
▼ ▼ Yekaterinburg
Rostov ▼
Samara
▼Krasnoyarsk
▼Vladivostok
Strong FDI presence ▼ Regional offices
Some FDI projects
15

16. Belgium and EBRD joint cooperation
 Total value of projects with Belgium-EBRD involvement: €25.1 billion
 Value of joint Belgium-EBRD investment: €6.2 billion as of
December 2011
– EBRD investment: €3.7.billion
– Belgian investment: €2.5 billion
 Major beneficiary regions: Russia, Hungary, and Slovenia
 Dominant investment sectors
– Industry, Commerce and Agribusiness: €2.4 billion
– Infrastructure: €1.9 billion
– Financial Institutions: €1.0 billion
– Energy: €0.8 billion
As of December 2011
16

17. Belgian companies and consultants
Procurement
 From 2007 to 2011, Belgian entities won 2 contracts valued at €0.7 million from a
total of 669 public sector signed contracts for a total value of €7.1 billion.
Consultancy services
 In 2011 Belgian consultants were awarded 28 consultancy contracts with a total
value of €594,297.
As of December 2011
17

18. Belgium and Technical Cooperation
 Contribution of over €1.9 million in Technical Cooperation (TC) funds supporting
projects in manufacturing (mainly through TAM programme) and transport in
countries such as Azerbaijan, Kazakhstan and Ukraine.
 Contributors are the governments of Belgium, Flanders and Wallonia
 Contributor to EBRD’s Multilateral Carbon Credit Fund (over €22 million as of
December 2011)
As of December 2011
18

19. Belgium: Trade Facilitation Programme
 Since the start of the programme in 1999, EBRD has financed more than 11,629
transactions in the total amount of more than €7.2 billion
 Regarding Belgium in particular:
– financed 221 export and import transactions of Belgian companies in the total
amount of €52.2 million
– 9 Belgian Confirming Banks (as at December 2011)
As of December 2011
19

20. Belgium and SME Finance Facility
 EBRD has committed €20 million to Belgian-owned financial institutions, of
which the EU has provided EUR 1.7 million
 Belgian financial institutions have taken part through the Polish subsidiary of
Fortis
 As of January 2012, 1,150 sub-projects have been disbursed for a total volume
of €45.2 million
As of December 2011
20

21. EBRD and Belgium
Case Study Examples
21

22. RusVinyl
JV Sponsors: Solvin (Solvay, Belgium/BASF,
Germany) and Sibur, a major Russian
petrochemicals producer
EBRD financing: EUR 1.3 billion green field plant
in the Nizhny Novgorod region: 330 ktpa PVC and
235 ktpa caustic soda capacity
–Equity participation of EUR 52m
–Loan to RusVinyl: EUR 750m, wihich
included EUR 150m from EBRD
Multi-party financing (EBRD, Sberbank, and with
ECA support: BNP Paribas, HSBC, ING)
Signed in 2010
EBRD Value-added - Bringing together:
Project Finance International & Euromoney –Russian and International companies
Petrochemical Deal of the Year, 2011 –industrial and financial partners
–government and private sector
22

23. Petrovax Pharm Equity
to Improve Production Facility in Moscow Region
Company: NPO Petrovax Pharm, a niche Russian
pharmaceutical company focused research,
development and commercialization of branded
products primarily in the field of immunology
EBRD Finance: the Bank acquired a 25% equity
interest in Petrovax for EUR 15 M through a
subscription to newly issued equity units
Use of Proceeds: construction of an additional
production line at the company's facility in Pokrov
(Moscow region); research, development and
commercialisation of new products; enhancement of
the company’s organisation structure and corporate
governance standards
Security: Tag/Drag Along Rights; Accelerated Put
Option
EBRD added Value: introduction of new products &
technology targeted at saving lives & reducing the
economic costs associated with diseases; setting
standards in corporate governance practices;
Signed in 2008 increased competition
23

24. Cora Regional
The EBRD provided financing in
2003 to the leading Belgian retail
group Louis Delhaize for the
expansion of their Cora
hypermarket brand in Hungary
and Romania
€30 million in senior debt
Signed in 2003
24

25. Bor Glass Factory (Russia)
 EBRD Equity: US$ 15 million
Asahi - Bor Glass (signed on 1 December 1997)
 EBRD Loan: US$ 25 million
(signed on 4 February 2003)
 Acquisition of a 75 per cent controlling
interest in the Company by a
Asahi/Glaverbel-led consortium, which is
to be followed by the completion of a
short-term capital investment program in
order to improve productivity
Signed in 1997 and 2003
25

26. Belgian Sponsor in Central Europe:
KBC Bancassurance Holding
 KBC Group and EBRD supported together the
privatisation of four banks in four countries:
– Poland: Kredytbank (EBRD exited to KBC)
– Hungary: K&H Bank (EBRD exited to KBC)
– Czech Republic: CSOB (EBRD holds
7.5 per cent, KBC 66 per cent)
– Slovenia: NLB (EBRD holds 5 per cent, KBC
holds 34 per cent)
 KBC plays a role in the management of NLB,
while EBRD, with one seat on the Supervisory
Board of NLB, plays a role in the improvement
of corporate governance practices
 In 2002, KBC bought 34 per cent of Nova
Ljubljanska banka for
€433 million, while EBRD bought 5 per cent of
NLB for €64 million
26

27. How to contact us?
6 Gasheka Street Ducat Place III Second floor
Moscow, Russia 125047
Tel: +7 (495) 787 1111 Fax: +7 (495) 787 1122
Moscow@ebrd.com
Natasha Khanjenkova,
George Orlov,
Managing Director for Russia
Director, Financial Institutions
KhanjenN@ebrd.com
OrlovG@ebrd.com
Lindsay Forbes, Alexander Orlov,
Director, Industry, Commerce and Director, Government Relations
Agribusiness OrlovA@ebrd.com
ForbesL@ebrd.com
Bruno Balvanera, Anna Tokarz,
Head of Regional Development Senior Banker, ICA
BalvaneB@ebrd.com Tokarza@ebrd.com
27

28. thanks
For its support
28/12/12