This presentation was held during the 5th GIB Summit, May 27-28 2015. The presentation and more information on the Global Infrastructure Basel Foundation are available on www.gib-foundation.org

1. This presentation was
held during the 5th GIB
Summit, May 27-28 2015.
The presentation and
more information on the
Global Infrastructure Basel
Foundation are available
on
www.gib-foundation.org
The next GIB Summit will take place in Basel,
May 24-25, 2016.
The information and views set out in this presenation are those of the author(s) and do not necessarily reflect the opinion of the Global
Infrastructure Basel Foundation. Neither the Global Infrastructure Basel Foundation nor any person acting on its behalf may be held responsible
for the use of the information contained therein.

2. The 5th Global Infrastructure Basel Summit
27-28 May 2015
Basel, Switzerland

3. PIDG Mission
To
mobilise
private-­‐sector
investment
to
assist
developing
countries
to
provide
infrastructure
vital
to
boost
their
economic
growth
and
combat
poverty.
A
consor;um
of
donor
organisa;ons
who
have
joined
together
to
help
facilitate
private
sector
investment
in
infrastructure
in
developing
countries.
• Australia
(DFAT)
• Switzerland
(SECO)
• Germany
(KfW)
• The
Netherlands
(DGIS)
• Norway
(MoFA)
• United
Kingdom
(DFID)
• Sweden
(Sida)
• World
Bank
Group
(through
IFC)

4. PIDG
• Structure:
designed
to
leverage
private
sector
• Delivers
a
social
return:
carefully
measured
• Demonstra;on
effect:
fron;er
markets
are
viable
• Risk
management:
addressed
/
managed
at
every
step
• Dialogue
with
industry:
key
to
our
strategy
development
• Aims
to
be
transforma;onal

5. Constraints to Private Investment / Risks
• Lack
of
bankable
projects
or
limited
developer
capacity
• Shortage
of
long-­‐term
FX
/
local
debt
(liquid,
longer
term
domes;c
investment
instruments),
depth
of
capital
markets
• Public
sector
capacity
constraints
• Lack
of
credit-­‐worthy
counter-­‐par;es
• Affordability
risk
• Regulatory
risks

6. 6
PIDG Facilities

7. 7
Ongoing gaps
Early stage
(2-5+ years – feasibility
studies, etc.)
Late stage
development
(1-2+ years – contracts
& structure, PPA, EPC,
etc.)
Construction
(1-4 years – oversee
delivery and project
management)
Operation
(15-25 years –
operation and
maintenance)
Commercial
operations
Financial
Close
Concept
stage
Gaps: • Upstream government capacity
• Long term commitment
• Transparent process
• Lack of capitalised companies/
teams to carry out development
work
• Lack of investors able to put equity
at FC
• Lack of investors willing to take
construction risk

8. Gigawatt Solar Power - Rwanda
• Development,
construc;on
and
opera;on
of
an
8.5MWp
Solar
PV
(photovoltaic)
power
plant
in
Eastern
Province
of
Rwanda.
• Total
cost
of
$24
m;
senior
debt
(75%)
financed
by
FMO
and
EAIF
(17-­‐
year
loan)
with
Mezzanine
loan
from
Norfund.
• Shareholders:
Norfund
(Norwegian
Investment
Fund
for
Developing
Countries),
KLP
Norfund
Investments
(vehicle
owned
by
KLP,
largest
pension
fund
in
Norway,
and
Norfund)
and
Gigawad
Global
Coopera;ef,
project
developer.
Built
by
Scatec
Solar.
• Installed
genera;on
capacity
grew
from
25MW
in
1994
to
155MW
today.
But
only
15%
of
Rwanda’s
popula;on
has
access
to
electricity,
which
is
low
compared
to
the
average
Sub-­‐Saharan
Africa
rate
of
31%.
• First
u;lity
scale
private
solar
PV
power
project
in
East
Africa
and
demonstrates
the
poten;al
of
solar
power
for
the
region.
This
transac;on
occurred
within
4
months,
which
is
faster
than
most
IPP
transac;ons
in
SSA
(normally
8-­‐12
months).
• First
solar
power
project
in
the
region.
Skill
transfer,
training
and
development
of
local
employees
included
adendance
at
a
renewable
energy
training
internship
at
the
Arava
Ins;tute
in
Israel
to
build
the
technical
capacity
of
local
engineers.

9. Kalangala Infrastructure Services & Renewables - Uganda
InfraCo
Africa
developed
an
innova1ve
financial
structure
for
the
project
with
blended
finance
(including
OBA),
allowing
the
project
to
reach
the
poorest
residents
whilst
also
being
commercially
viable
4
integrated
infrastructure
components:
• Total
project
investment
-­‐
$44.5m
• Co-­‐financed
by:
NedBank,
USAID
(co-­‐guarantor),
Ugandan
Development
Corpora;on,
Industrial
Development
Corpora;on
of
South
Africa,
EAIF,
GuarantCo
and
OBA
support
from
TAF
Project
details:
• Solar
power
supply
and
distribu;on
• Solar-­‐powered
pump
based
water
supply
• Two
ferries
• 66
km
road
rehabilita;on
to
serve
popula;on
of
Bugala
Island,
Lake
Victoria
• Project
developed
by:
InfraCo
Africa
• It
is
es;mated
that
due
to
the
project,
literacy
will
be
increased
by
5%
by
2020
and
20%
of
women
who
are
engaged
in
commercial
ac;vity,
will
be
doing
so
as
a
consequence
of
the
project.

10. • Design,
construct
and
operate
a
340MW
Combined-­‐Cycle
Gas
Turbine
plant
in
the
Tema
industrial
zone,
24
kilometers
east
of
Accra.
Adjacent
to
West
African
Gas
Pipeline
landing
point
in
Tema.
• Project
developed
by
Cenpower
Holdings
and
InfraCo
Africa.
Financial
close
reached
end
of
2014
with
equity
sold
to
Sumitomo
and
AFC
Equity
Investment.
InfraCo
Africa
Development
have
exited,
recovering
development
costs
and
allowing
money
to
be
recycled
for
other
project
development.
• Total
cost
of
US$903m
(72:28
debt/equity)
– Debt:
funded
under
export
credit
cover
(ECIC)
and
DFIs:
Rand
Merchant
Bank,
Nedbank,
Standard
Bank,
FMO,
DEG,
IDC,
DBSA,
OFID,
EAIF.
– Equity:
AFC
Equity
Investments
(32%);
Sumitomo
Corp.
(28%);
Cenpower
Holdings
(15%);
FMO
(4%).
• ‘African
Power
Deal
of
the
Year’
in
2014
(PFI
Awards),
the
plant
should
be
fully
opera;onal
by
2017.
Cenpower, 340 MW IPP in Tema - Ghana
First
IPP
in
Ghana
(10%
of
installed
capacity);
first
genera1on
license
(license
no.
001);
and
first
connec1on
agreement
between
the
Government
and
an
IPP.

11. • TBEC
sets
up
biogas
plants
near
agri-­‐processing
factories
to
extract
biogas
from
the
factories’
wastewater.
The
biogas
is
used
to
generate
clean,
renewable
energy
(replacing
coal,
Diesel
or
HFO).
• Plants
reduce
local
air
and
water
pollu;on,
provide
renewable
energy
&
electricity,
help
in
mi;ga;ng
climate
change
through
methane
capture,
and
provide
a
range
of
financial
and
non-­‐financial
benefits
to
the
host
agri-­‐
processing
factories.
• The
total
investment
of
$12.5m
has
been
used
to
set
up
two
new
wastewater
processing
plants
in
Laos
and
Cambodia.
• 100%
commercial
debt
financing
was
provided
by
a
local
Thai
lender,
ICBC.
GuarantCo
provided
a
100%
guarantee
for
ICBC’s
loan.
Thai Biogas Energy Company - Mekong Region
• Facility
required
by
TBEC
was
too
small
for
local
banks’
project
finance
teams
and
too
complicated
for
their
corporate
banking
teams.
Even
with
a
100%
guarantee
from
GuarantCo
it
took
one
year
to
find
a
suitable
commercial
lender
for
the
project.
• GuarantCo’s
flexibility
in
structuring
solu1ons
is
cri1cal
in
enabling
small,
unconven1onal
yet
highly
development
projects
to
successfully
raise
commercial
financing.

12. Mobilink Pakistan – PKR 8bn ($75m) Sukuk
• The
Sukuk
was
structured
as
a
Service
Ijara,
the
first
;me
this
structure
has
been
used
in
Pakistan.
• Strengthening
and
deepening
local
capital
markets
–
mobilising
16
Islamic
investors,
60%
of
financing
from
new
sources.
• GuarantCo
now
has
relevant
Islamic
capital
markets
experience
that
can
be
applied
in
other
countries.
• CSR
ac;vity
(part
supported
by
TAF)
involves
a
successful
SMS
based
literacy
programme
to
impart
educa;on
through
mobile
phone
technology
to
illiterate
women
in
KPK
province
of
Pakistan.
• Pakistan
Mobile
Communica;ons
Limited
was
seeking
to
expand
network
into
underserved
rural
areas
to
enable
access
to
telecommunica;on
services
for
wider
propor;on
of
popula;on.
• To
fund
this
capital
expenditure
PMCL
decided
to
issue
a
local
currency
Islamic
bond
(Sukuk)
of
up
to
$75
mm
equivalent.
• Given
limited
size
of
the
corporate
bond
market
in
Pakistan
PMCL
was
constrained
by
exis;ng
investors
having
reached
their
regulatory
limits
either
in
terms
of
exposure
to
PMCL
or
telecommunica;ons
sector.

13. CocSan Run-of-River Hydro - Vietnam
• 29.7
MW
run
of
river
hydro
in
Lao
Cai
province.
• Project
developed
by
InfraCo
Asia
Development.
• Total
cost:
$50
m.
• Debt
provided
100%
by
local
Vietnamese
bank.
• 20
year
standard
PPA
with
Northern
Power
Corpora;on
• EPC
Turn
Key
Lump
Sum
Contract,
24
months
construc;on
period.
• Benefits:
(1)
Reduce
cost
of
electricity
and
enhance
energy
security
by
providing
an
alterna;ve
to
the
high
cost
and
unreliable
electricity
from
China;
(2)
Support
expansion
of
various
industries
such
as
iron
mining,
copper,
and
fer;lizer
produc;on
from
apa;te
mines.
PIDG
at
work
-­‐
Coopera;on
with
other
Facili;es:
Ø TAF
grant
to
par;ally
finance
the
costs
of
an
early
stage
appraisal
of
the
subsidy
requirements
of
a
hydropower
project
in
Vietnam.
Ø VGF
grant
of
US$
5
mm
to
close
the
viability
gap.
Ø InfraCo
Asia
Investments
provided
funding
of
US$10m
at
financial
close
to
bridge
the
gap
in
funding
required
at
financial
close.

14. Thank you
14
www.pidg.org

15. 15
PIDG Facilities and the Project Cycle

16. PIDG: Key Facts
• From
2003
to
31
Dec
2014,
the
PIDG
Facili;es
have
commided
US$1.9
bn
of
funding
to
128
PIDG
projects
that
have
reached
financial
close
in
58
countries,
mobilising:
• US$
27.3bn
of
Total
Investment
Commitments,
of
which:
– US$
18.6bn
or
68%
is
from
commercial
private
sector
investment
(PSI)
sources;
and
– US$
8.7bn
or
32%
is
through
DFI
financing.
Every
$1
of
contribu1on
from
PIDG
donors
will
leverage
$20
of
private
sector
investment
in
infrastructure
• 49%
of
project
investments
mobilised
by
PIDG
facili;es
are
located
in
Fragile
and
Post
Conflict
States.
• 55%
of
project
investments
mobilised
by
PIDG
facili;es
are
located
in
the
poorest
DAC
I/
II
countries.
16