EBRD Your Partner in North- West Russia Tetsuya Uchida Head of EBRD St. Petersburg office 10 November, 2005 8989 regionsregions andand 77 FederalFederal DistrictsDistricts
Chukota Kaliningrad Murmansk
Karelia Koryask Nenets AO Pskov Archangelsk Taimyr Novgorod Komi Tver Vologda Smolensk Yaroslavl Moscow BryanskKaluga Kostroma Salekhard Magadan Ivanovo Oryol Tula Vladimir Kursk Ryazan N.Novgoro Kirov Komi-Permyatski Lipetsk Belgorod d Mariy El Tambov Mordovia Chuvashia Evenkysky Sakha Voronezh Udmurtya Perm Penza Khanty-Manskiysk Kamchatka Tatarstan Ulyanovsk Ekaterinburg Rostov Krasonda -on- Volgogra Saratov Samara Bahkortostan Tyumen r Don d Maikop Elista Orenburg Cherkessk Astrakhan Nal’chik Stavrop Chelyabinsk Vladikavkaol Kurgan Tomsk Omsk Krasnoyarsk z Nazran Groznyi Amur KhabarovskSakhalin Makhachkala Irkutsk
Novosibirsk Kemerovo
Chita Altai-T Ust-Ordynsky Jewish Khakssia Buryatia Aginsky Primorsk Buryatia Altai-O Tyva Region: NORTH-WEST Area: 1.68 mln km2 NorthNorth--WestWest FederalFederal DistrictDistrict Population: 15 mln Cities: 152 Capital: St. Petersburg
10% of Russian population 28% below poverty line 12% of workforce in SME Murmansk Large projects Growth above 5%
9% of GDP Kaliningrad SME financing Decline above 5% 7% of FDI 80% of shipbuilding Karelia 40% of timber production Apatite Bauxite FDI grows in Leningrad Oblast, St.Petersburg Nenets AO Iron ore St. Petersburg, Novgorod. Pskov Archangelsk Nickel Novgorod Current agenda Komi Oil & Gas o Key transport hub to Europe Vologda Timber o St. Petersburg tourism and property Titanium
Potential: Agribusiness, general industry, infrastructure, tourism and property
Risk: Average risk area Lower risk in Novgorod and St. Petersburg Higher risk in Komi A network of 32 offices in 27 countries EBRDEBRD RResidentesident OOfficesffices
St. Petersburg RO
Moscow RO Ekaterinburg RO
Vladivostok RO
Rostov RO Samara RO (2006) (2005) High Market Potential • EBRD has presence in 47 out of 89 regions. • A “real” presence is maintained in 19 regions in which the Bank has 4 or more big projects. Good Market Potential What is EBRD?
z International financial institution est. 1991, owned by 62 national and supranational shareholders
z Promotes market-based economies in 27 countries in 20 central & eastern Europe and the former Soviet Union 15 z Committed cumulatively €26.2
10 billion for 1,167 projects to date
z Mobilized additional €55.7 billion 5 of cumulative business
z Capital base of 0 95 96 97 98 99 00 01€20 billion 02 03
Audited May 2004 EBRDEBRD offersoffers aa widewide varietyvariety ofof productsproducts
GuaranteesGuarantees 14%14% LoansLoans 81%81% EquityEquity 5% 5%
z z Specific risk guarantees Corporate or Project z Venture (i.e. political, commercial specific Capital
risk participations) z Non or limited recourse to z Privatisations z Commodity-backed sponsors z New Equity instruments (i.e. z Syndicated loans (w. z Quasi-equity warehouse receipts) underwriting) z ‘Portage’ z Trade facilitation z Parallel with ECA’s, program (with other IFI’s or Banks participation of local banks) z Hard / local currency
z Floating/fixed rates Business volume, Portfolio and Pipeline in Russia
€ billion 7 Cumulative z Largest investor in Russia 6 Business Volume z Since 1991 the EBRD’s a 5 Cumulative Business Volume is €5.9 billion (this is 23% of 4 all projects financed by EBRD) 3 st z At the end of 1 quarter 2005 2 the Portfolio Stock was at €3.9 billion and Pipeline projects 1 were at €3.8 billion
z 76% of the Bank’s portfolio in 0 Russia was the private sector, 1991-1994 1997 2000 2003 while 81% was debt, 14% Annual Business Volume (cumulative '91-'94) equity and 5% guarantee Net Cumulative Business Volume Russia Becoming the Biggest Focus
Net cumulative commitments €26.2 billion of which €5.9 billion in Russia
Central Europe 40%
SEEC 30% Central Asia 7%
Russia 23% Russia Portfolio by Region
Others 17% Multi-Regional Kamchatskaya Oblast 21% 2%
Volgada Oblast 2% Perm Oblast 2% Russia Nizhny-Novgorod R. 3% Portfolio Yamalo-Nenetsk R. Stock 3% €3.75 billion National Samara Oblast 14% 4%
Moscow Oblast 7% St Petersburg City Moscow City 14% 11% Russia Portfolio Stock by Sector
Portfolio Volume €3.75 billion
Equity Funds Transport Agribusiness 8% 15% 9% Financial Institutions Small 14% Business Property & 3% Shipping 3% Telecoms & Media 3% General Infrastructure Industry Power & Natural 11% 20% Energy Resources 5% 9% EBRDEBRD inin NorthNorth--WestWest RussiaRussia
z Priority region for the Bank z Total cumulative portfolio of signed projects – EUR 1.5 billion (2005) z Well diversified portfolio: municipal, food processing, general manufacturing, forestry, telecommunications, property etc z 70% of the portfolio concentrated in St. Petersburg and Leningrad oblast MajorMajor projectsprojects inin NorthNorth--WestWest RussiaRussia 11
z Municipal & Infrastructure – St.Petersburg:
z Municipal Support Project;
z Toxic Waste Clean-Up Project;
z South Waste Water Treatment Plant (22 September 2005- opening ceremony);
z Flood protection barrier;
z Ring Road – Arkhangelsk Municipal Services Improvement Programme
z Food Processing – Dirol Chewing Gum Factory (Novgorod) – Baltika Brewery – Vena Brewery MajorMajor projectsprojects inin NorthNorth--WestWest RussiaRussia 22
z Property & Tourism – Nevsky 25 Business Centre – Radisson SAS Hotel
z Other Industries – North-West GSM (telecommunications) – Air Cargo Terminal Pulkovo (transport) – Lenenergo (power & energy) – Severstal-Arselor JV (steel making, Vologda region) – Pestovo Novo Sawmill (UPM Kummene) (forestry, Novgorod region) ProjectsProjects signedsigned inin 20042004 andand pipelinepipeline 20052005
Signed in 2004: z Nokian Tyres (Leningrad oblast; 22 September 2005- opening ceremony) z Uralkali II (Baltic Bulker Terminal, St. Petersburg) z Pokrov Glass Plant (Vologda) z Power Machines (St. Petersburg) z Lenta cash & carry hypermarkets (S. Petersburg) z Komi Municipal Water Services Improvement Programme (Komi)
Total signed in 2004 – EUR 160 million Total pipeline 2005 is estimated at EUR 250 million StrengthsStrengths ofof thethe EBRDEBRD
z Strong, internationally recognised financial partner with long- term perspective and mission; z Willing to share risks, including political risks (customised to each transaction); z International institution; z Preferred Creditor Status; z Longer term perspective than that of many investors in the CEE & CIS region (i.e. medium- to long-term financing); z One of the few sources of limited recourse finance for projects in Russia and Central Asia; z Excellent working relationships with governments; z Political leverage due to EBRD’s unique mandate and shareholders’ structure PortagePortage EEquityquity FinanceFinance
Equity Toyota Toyota EBRD Equity Russia LLC
z The EBRD purchased a 20% equity stake in the Russian company established by Toyota in the amount of EUR 15 million z EBRD exits through a put and call arrangement to Toyota z Diversify Russian economy z Maturity 7 years z Pricing equal Toyota’s debt funding costs plus a margin Note: details are simplified for case study How to contact us
z Moscow Resident Office Victor Pastor, Director, Russia Team Tel: +7-095-787-1111 / fax: 787-1122 z St. Petersburg Resident Office Tetsuya Uchida, Head of Office Tel: +7-812-703-5525 / fax: 703-5526 z Procurement Opportunities and General Information via web site: www.ebrd.com z Publications Tel: +44-20-7338-7553 / fax: +44-20-7338-6102