Transcript The European Bank for Reconstruction and Development (EBRD)

AmCham Montenegro
EBRD Business Breakfast
November 28, 2012
RAMADA Podgorica
EBRD as a partner and investor
Giulio Moreno
Tuesday, 21 March 2017
Table of Contents
•
What we do
•
Where we operate
•
EBRD Rating, Portfolio, Capital
•
Montenegro (Economic Outlook)
•
EBRD in Montenegro
•
How to Obtain EBRD Financing
‒
Local Enterprise Facility (LEF)
‒
Western Balkan Sustainable Energy Direct Financing Facility (WeBSEDFF)
What we do
•
The European Bank for Reconstruction and Development (EBRD) was established in
1991 - headquarters in London.
•
Created to support development of market economies after the collapse of communist
regimes.
•
Present in 33 countries - Central Europe, Central Asia and South and East
Mediterranean.
•
Board of Directors - represents shareholders from 63 countries plus the European
Union and European Investment Bank.
‒
•
Kosovo to become 66th member of the Bank;
Every investment must:
‒
Support the further development of sound market economies;
‒
Assume certain level of risk to support private investors;
‒
Follow sound banking principles;
‒
Strengthen sustainability;
Where we operate
May 2012
EBRD Rating, Portfolio, Capital
•
Triple-A credit rating, portfolio of €35 billion and total
capital of €30 billion.
•
Record level of investment achieved in 2011, over €9
billion in 380 projects.
‒ 77% in the private sector;
•
3,400 projects since inception in 1991, cumulative
business volume over €70 billion.
•
Primarily involved in projects of the private sector, in
order to serve the transition to market economies and
democratic societies.
Montenegro (Economic Outlook)
•
Economic performance has weakened
substantially.
•
Still struggling to recover from the effects of the
financial crisis.
•
2010 and 2011 - on its way to a modest but steady
recovery mainly driven by exports and tourism countering the drop in FDI inflows and an on going
credit crunch.
•
2012 – Significant fall in GDP growth = 0.3%
projected, external demand has weakened
substantially as a result of the impact of the
eurozone crisis, combined with weak domestic
demand.
•
2013 – Negligible projected GDP growth of 0.8%,
higher than in 2012, yet lower than projected SEE
average of 1.6%.
Montenegro (Economic Outlook)
Montenegro (Economic Outlook)
•
Current account deficit remains high, at around 20% of GDP.
•
Industrial production is volatile and negative.
•
Uncertainty over the future of KAP, Montenegro’s largest enterprise and exporter.
•
Financial sector – high level of NPLs, bank lending activities continue to shrink, more rigorous loan approval process.
‒
•
Total bank assets declined by 1.7% y/y basis, mostly due to drop in gross loans of 4.2% y/y (Oct 2012);
The fiscal position has been weakened - activation of state loan guarantees related to KAP and weaker than
expected growth.
‒
Public debt was close to 50% of GDP as of August 2012. Ability of the Government to absorb additional
debt to finance infrastructure projects is limited;
Montenegro (Economic Outlook)
•
On a positive note...
‒
Membership to WTO (Dec 2011) and the decision of the European Council to endorse
the European Commission’s recommendation (Jun 2012) reflects substantial and
sustained progress in reforms in both the political and the economic spheres.
–
Visible progress should help to attract further FDI and ultimately boost the
country’s growth prospects;
–
Fiscal policies have become more prudent in the past couple of years.
–
Success in managing the sale of the steel company in Niksic to a Turkish investor.
–
Infrastructure gradually improving, and further development is needed to support the
expanding tourism industry.
‒
Important steps have been taken to develop Montenegro’s energy potential (i.e. Tariff
reforms, underwater interconnection cable).
‒
Deleveraging of the financial sector in the past year and reduction of NPLs from 21% in
2010 to 15.5% in mid-2012.
EBRD in Montenegro
•
Net cumulative business volume of €295 million.
1.
Corporate (agribusiness, manufacturing and
services, property and tourism and
telecommunications);
2.
Energy (natural resources and the power
sector);
3.
Financial sector (investments in micro, small
and medium-sized enterprises via financial
intermediaries);
4.
Infrastructure (municipal environmental
infrastructure and transport);
EBRD in Montenegro
• 2011 – Five projects signed, over €43 million in value.
• 2012 – Five to seven projects of €30 - €35 million, four already
signed, additional projects to be signed by the end of the year.
• 2013 – Six to ten new projects, over €130 million in value,
negotiations already underway:
‒ Loan facility for the power transmission company CGES (coowned by Terna);
‒ Loan facility to EPCG – Montenegrin producer and distributor of
electricity, co-owned and managed by A2A;
• Continue to focus on infrastructure development, with a growing
emphasis on the wider private corporate sector - energy sector
(efficiency improvements, conventional and renewable energy),
property and tourism, agribusiness, financial institutions, etc.
How to obtain EBRD financing
• Large private sector projects
‒ Private sector projects from €5 million to €250 million.
‒ The average amount is €25 million.
• Small projects
‒ Private sector projects from €1 million to €10 million, primarily
financed through LEF (Local Enterprise Facility).
‒ EBRD also supports financial intermediaries, such as local
commercial banks, micro-business banks, equity funds and leasing
facilities.
•
Energy Efficiency and Renewable Energy – financed through
Western Balkan Sustainable Energy Direct Financing Facility
(WeBSEDFF).
‒ Albania, Bosnia and Herzegovina, Croatia, FYR Macedonia,
Montenegro, Serbia, and Kosovo;
Local Enterprise Facility (LEF)
• Eligible investments: expansion, restructuring or acquisitions
of existing private businesses.
• Eligible sectors: a wide range of sectors, with only few
exceptions (weapons, liquors and tobacco). All investments must
be in line with sound environmental principles.
• Size of investments: up to €10 million (EBRD participation).
• Type of investments: equity, quasi-equity and debt financing.
• Target Stake (for equity): [preferably] in the range of 20% to
35% of the capital of the company.
• Time horizon: 3 - 8 years.
• Pre-investment process: 3 - 9 months.
Western Balkan Sustainable Energy
Direct Financing Facility (WeBSEDFF)
• Eligible investments:
‒
Renewable Energy - predominantly greenfield projects of up to 10
MW) – run-of-river hydro power plants; wind farms; solar PV plants;
biomass projects, etc.
‒
Industrial Energy Efficiency – on site co- or tri-generation;
rehabilitation of boilers, compressed air systems and steam
distribution systems; chillers; installations for heat recovery from
processes; various other EE improvement measures or
combinations of them.
• Size of investments: €2 million to €6 million.
• Incentive payments: 10% reduction of the outstanding loan principle
upon project completion.
• Time horizon: 6 - 8 years for energy efficiency and 12 - 15 years for
renewable energy projects, with appropriate grace periods and flexible
repayment schedules.
• Pre-investment process: 4 - 9 months.
EBRD Contact
EBRD – Montenegro Office
T.C. Palada
Serdara Jola Piletica bb
81000 Podgorica
Tel: +382 20 237 173/174/175
Fax: +382 20 237 195
Giulio Moreno, Head of Office
Vasilije Jaukovic, Associate Banker
Thank You!
AmCham Montenegro
EBRD Business Breakfast
November 28, 2012
RAMADA Podgorica