The African Development Bank Group: A Partner of Choice. GHANA TRADE AND INVESTMENT FORUM Rome, Italy October 31st, 2014

Transcription

1 The African Development Bank Group: A Partner of Choice GHANA TRADE AND INVESTMENT FORUM Rome, Italy October 31st,

2 AFRICAN AFRICAN DEVELOPMENT DEVELOPMENT BANK BANK GROUP GROUP PRIVATE SECTOR OPERATIONS Presentation Outline African Development Bank (AfDB) Group AfDB s Private Sector Development Strategy AfDB as a Business Partner Accessing Financing Bidding on Bank-funded Projects Bank Portfolio in Ghana 2

3 The AfDB Group Africa s premier development financial institution focused on reducing poverty & improving living conditions on the continent Our mission - To spur sustainable economic development and social progress in its RMCs, thus contributing to poverty reduction The ADB Group: three constituent institutions, separate legally and financially, with a common goal African Development Bank ( AfDB ) Established in African and 25 non-african countries Authorised capital: US$ 103 billion The Bank Group achieves its objective by: 1. mobilizing and allocating resources for investment in Africa; and 2. providing policy advice and technical assistance to support development efforts. The African Development Bank Group: 1. Triple-A by all major ratings agencies 2. 0% risk weighting under Basel II NTF African Development Fund ( ADF ) Established in 1972 Subscription: US$ 35 billion Primarily financed by donors Concessional Financing Terms Nigeria Trust Fund ( NTF ) Established in 1976 by Nigeria Maturity 2018 Total resources: US$ 242 million Concessional Financing Terms 3

4 PSD Strategic Priorities Improving the Investment Climate Supporting Private Enterprises Strengthening Financial Systems Building Competitive Infrastructure Promoting Regional Integration and Trade To encourage domestic and foreign investment. Promoting entrepreneurship will create sustainable growth. A sound financial system and a vibrant banking sector are essential. Participation of the private sector in infrastructure through PPPs. To assist African countries to become globally competitive. 5

5 AFRICAN AFRICAN DEVELOPMENT DEVELOPMENT BANK BANK GROUP GROUP PRIVATE SECTOR OPERATIONS Broad Range of Sectors Power Water & Sanitation Transport ICT Oil & Gas Mining Agribusiness Health & Education Financial sector Thermal, Hydro, Wind, Solar Supply, Purification, Desalination, Treatment Ports, Roads, Airports, Rails Submarine Cable, Satellite, Telephony, Optic Fiber Extraction, Refining, Pipelines Extraction, Refining, Smelting Sugar, Oils, Timber, Bio-fuels, Fishing Hospitals, Schools Banks, Insurance, leasing, Microfinance 6

6 AFRICAN AFRICAN DEVELOPMENT DEVELOPMENT BANK BANK GROUP GROUP PRIVATE SECTOR OPERATIONS Financing Instruments Long-term Loans Subordinated Debt Guarantees Equity Technical Assistance Advisory Services Up to 15 year tenor; Up to 3 years grace period; Up to 1/3 of total project cost; Foreign or local currencies. Up to 15 year tenor; Up to 3 years grace period; Local and foreign currency. Partial Risk Guarantee; Partial Credit Guarantee (long tenors). Equity funds; Up to 25% of committed capital. Grants for studies; Capacity-building. Project preparation activities; Project structuring. 7

7 AFRICAN AFRICAN DEVELOPMENT DEVELOPMENT BANK BANK GROUP GROUP PRIVATE SECTOR OPERATIONS Eligibility criteria Which Enterprises/Projects are Eligible for Financing Under the Private Sector Window? Located and incorporated in Africa, whether promoted by African or non- African investors. Majority-owned (51% +) by private-sector investors, or publicly owned with strong financial standing and proven managerial autonomy. Projects for the establishment, expansion, diversification and modernization of productive enterprises. No direct financing of trade and real estate. Maximum investment of 1/3 of total project cost 8

8 AFRICAN DEVELOPMENT BANK GROUP PRIVATE SECTOR OPERATIONS Application Procedure How to enable a prompt assessment of the eligibility of a project for investment? Description of the project (sector, location, production volumes, etc.) The sponsors, including financial and managerial background Cost estimates, including foreign exchange requirements Financing plan, indicating the amount of ADB financing desired Key technical and environmental features Feasibility indicators Business climate, market prospect, incl. proposed marketing arrangements Implementation plan, including the status of required licenses, permits, etc. 9

9 Projects Selection Criteria Additionality Deal structuring Crowding in of commercial investors Political & Financial risk mitigation Procurement Competition default option Unsolicited proposal subject to competitive validation Direct contracting justification Strategic Alignment With national economic & social priorities AfDB strategic fit Commercial viability Market fundamentals Financial structure Sponsor s experience and financial strength Rate of Return Development Outcome Employment E & S Impact Govt. revenue Foreign exchange 10

10 Bidding for Bank Projects Procurement Policies - Encourage Competition Goods and Works Prequalification Detailed specs Price is a major factor No price negotiation Consultancy Services Shortlisting TOR s Price can be a minor factor Negotiation usual Two stages One or Two stages Open Competition and a Range of Methods taking account of complexity, available expertise, time constraints 11

11 Evaluation Criteria Legal Additionally & Development Objective Evaluation Environmental & Social Risk Management 12

12 Project Processing Cycle Origination Due Diligence Structuring & Negotiation Arranging Documentat ion Funding 13

13 Sources of Business Information Bank s Web Site: United Nations Development Business : Project Executing Agencies in Borrowing Countries Press Releases 14

14 Bank Portfolio in Ghana Lending commenced in 1973: 104 operations (USD 2.7 Billion) 19 Ongoing Ops (USD 800m) 14 National Public Sector Ops - $ 700 m 1 Multi-National Operation - $ 24 m 4 Private Sector Operations $ 76m Sector Distribution Ongoing Ops. Energy 16% Private Sector 9% Agriculture 20% Social 12% Electricity Distribution System Reinforcement & Extension Project (approx. USD 75m -Not yet signed) Water & Sanitation 8% Transport 33% Multi-Sector 2% 15

15 Electricity Distribution System Reinforcement & Extension Project (Loan- USD 44m; Grant - USD 30.5m) To reinforce and extend the country electricity distribution network thereby improving population s access to reliable & quality electricity services. Construction of new Bulk Supply Points and switching substations in Kasoa, Juabesso, Ashanti East and West regions Deployment of off-grid solar photovoltaic systems in 60 lakeside and island communities; and Empowerment of key institutions in the power sector through institutional strengthening & capacity building. Benefits: reach 83,000 customers; connect 37,800 new households and 650 news businesses, incl. 30 schools and 30 health centers. 16

16 AFRICAN DEVELOPMENT BANK GROUP PRIVATE SECTOR OPERATIONS Pipeline of Projects Energy Independent Power Producer of 1000 MW plant (about USD 200 m) 28 MW Solar Power Plant (USD 54 m) Extension of Takoradi Thermal Power Station (about USD 250m) Water and Sanitation Urban Sanitation Project (Total - USD 90 m; AfDB USD 30m) Transport Pokuase Interchange (Total - USD 70 million; AfDB = USD 50m) Financial Sector Intermediation Trade Finance Facilities and Long Term Loans to Commercial Banks (Total - USD 70 million) Private Sector Development Business Linkages program (Grant Funding - USD 1 million) 17

17 AfDB Ghana Country Office : afdb_acc African Development Bank Group ghfo@afdb.org AfDB_Group (233)

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