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Investing in Kazakhstan with SACE

Investing in Kazakhstan with SACE. Fabio Fritelli October 2007. SACE Group. Credit insurance, reinsurance, investments protection and advanced financial solutions. Short-term insurance services both in domestic and foreign markets.

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Investing in Kazakhstan with SACE

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  1. Investing in Kazakhstan with SACE Fabio Fritelli October 2007

  2. SACE Group Credit insurance, reinsurance, investments protection and advanced financial solutions Short-term insurance services both in domestic and foreign markets. Leader in surety business, specifically in the construction industry

  3. A strong financial partner Gross written premiums € 240.5 mln Outstanding € 31,979.9 mln Net profit € 510.1 mln Equity € 5,734 mln Rating (Moody’s) Aa2 Key figures 2006

  4. SACE exposure: sectors • Strong experience in Oil&Gas sector

  5. RUSSIA GEORGIA KAZAKHSTAN ARMENIA Open AZERBAIJAN Open (with conditions) UZBEKISTAN Off cover TURKMENISTAN KYRGYZISTAN TAJIKISTAN SACE’s Terms of Cover in CSI Countries

  6. Kazakhstan • S&Ps: BBB • Moody’s: Baa3 • Fitch: BBB Rating • Country Category4/7 OECD • Sovereign/Bank/Corporate Risk: Open SACE Cover Policy

  7. SACE vs Bank Sector in Kazakhstan Main Financial Institutions positively assessed for SACE support Kazkommertsbank Bank Turan Alem ATF Bank Halyk Saving Bank of Kazakhstan Alliance Bank JSC Astana Finance JSC CJSC Development Bank of Kazakhstan Kazakhstan Investment Fund Alfa Bank Kazakhstan Bank Caspian Bank Centercredit Development Bank of Kazakhstan Eurasian Bank Nurbank Temirbank Tsesnabank euro 47 M approx. Total Current SACE Exposure Maximum available exposure euro 490 M approx

  8. Why SACE: benefits Competitiveness Longer payment terms for the buyers Security Transfer of risk Liquidity Credits monetization at competitive costs Protection Safeguarding your investments and credits abroad Stability Improvement of your balance sheet composition

  9. Why SACE: Basel II • Cost of funding based on company credit rating • Increased company transparency and disclosure of business information Basel II effects With Basel II fund raising is more difficult for companies withoutan investment grade • Zero weight for loans guaranteed by SACE • Boost borrowing power Role of SACE

  10. SACE Range of Activities: 1) Export Related Products • SACE has widened its eligibility criteria: • SACE is now able to provide cover for the financing of: • supply contracts signed by anItaliancompany; or • supply contracts signed by a foreign companyparticipated for at least 20%* by an Italian company, or • Italian origin supplies under contracts signed by a non-Italian company, and • local costs,in application of OECD Regulation Framework • Italian origin of goods is not an eligibility requirement, as SACE could cover all goods/services (of Italian, EU, or extra EU origin) provided under such contract (*) Such threshold is reduced to 10% for listed companies.

  11. SACE Range of Activities: 2) Non-Export Related Products • Investments made by Italian companies / Italian subsidiaries (*) • Transactions of “strategic interest” for the Italian economy: • Strategic imports (power, gas, oil, raw materials for re-exports); • Strategic foreign customers/partners to Italian companies in their activities abroad; • Infrastructures (including domestic infrastructures) supporting: (a) the internationalization of the Italian economy (terminals, railways, roadways, etc), or (b) diversification of energy sources for the domestic market (pipelines, regasification plants, etc); • Internationalization of Italian banks; • Employment and economic growth in Italy; • Strategic industries: renewable energies, environment, technological innovation (*) Participated at least 20% by an Italian companies. Such threshold is reduced to 10% for listed companies.

  12. Credit Insurance (I) Buyer Credit (II) Supplier Credit SACE SACE Payment of exported goods Insurance policy Insurance policy Payment of exported goods Foreign Entities Italian Companies Foreign subsidiary Financing Foreign Entities Italian Companies Bank Export of goods and services Export of goods/services Reimbursement • Coverage up to 100% for political and commercial risks • Financing up to 100% of premium amount and IDC • Tied or multitied financing / refinancing of import transactions • Coverage up to 100% for political and commercial risk • Monetisation of assets through assignment of the insurance policy to a financial institution on a pro-soluto basis Main Features

  13. PRI:Capital contribution abroad Structure B A SACE SACE Guarantee Guarantee Capital contribution / Financing Capital contribution / Financing Italian Company Foreign Company (Recipient) Foreign Subsidiary Foreign Company (Recipient) Controlling Stake Italian Company • Coverage including capital contributions, capital goods and others, or subordinate loans and guarantees • Financing of foreign investments also by assigning the insurance policy to a bank • Coverage up to 100% of the investment value as a consequence of a political event • Eligibility for investments via foreign vehicle/holding Main Features

  14. Financial Credit Insurance: Cross Border Investment & Preshipment Facilities(*) (I) Cross Border Invest. Facility (II) Pre - Shipment Italian entities and /or Foreign Subsidiaries SACE Structure SACE Funding Banks Banks Guarantee Guarantee Working Capital financing Funding Capital Markets Italian Related Business Italian Entities Italian related business • Financing linked to internationalisation of the Italian economy • First demand guarantee in favour of the funding bank • Risk participation with the funding bank,on a % to be agreed, against non-payment risk • Release of the bank’s regulatory capital • Freeing up borrowers credit lines • More competitive borrower’s all-in cost of funding Pricing: participation feepaid by the funding bank to SACE on an up front / running basis Main Features

  15. Commitment: € 1 bln • Insured: Italcementi S.p.a. • Beneficiary: Ciments Francais • Country: Egypt, India, Kazakhstan, Thailand • Structure: Investment Policy • Commitment: €230 mln • Supplier: Danieli & Officine Meccaniche S.p.a. • Buyer: OMK Steel (Russia) • Country: Russia • Structure: Strcutured Finace • Commitment: € 50 mln • Exporter: Ansaldobreda S.p.a • Beneficiary: DSB- Material • Country: Denmark • Structure: Surety Bond Credentials • Commitment: $ 1.2 bln • Insured: Bond Issued by Gazprom • Supplier: Snam,Saipem,Ilva,Nuovo Pignone • Country: Russia • Structure: Structured FinanceGuarantee

  16. www.sace.it

  17. Disclaimer This presentation has been prepared solely for information purposes and should not be used or considered as an offer to sell or a solicitation of an offer to buy any insurance/financial instrument mentioned in it. The information contained herein has been obtained from sources believed to be reliable or has been prepared on the basis of a number of assumptions which may prove to be incorrect and, accordingly, SACE does not represent or warrant that the information is accurate and complete.

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