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Inter-American Development Bank

Inter-American Development Bank

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Inter-American Development Bank

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  1. Inter-American Development Bank Private Sector Department (PRI) Financing Private Investment in Infrastructure in Latin America and the Caribbean Lori Kerr Investment Officer, PRI April 16, 2004

  2. Inter-American Development Bank I. Overview of Private Sector Department (PRI) II. Products and Financial Instruments III. PRI Portfolio IV. Transaction Cycle V. Consulting Opportunities with PRI VI. Contact Information

  3. Inter-American Development Bank • Public Sector • Private Sector Department (PRI) An Operational Window to finance private participation in infrastructure investments without government guarantees. Commenced operations on January 1, 1995

  4. Eligible Sectors for PRI Financing • Energy • Transportation • Water and Sanitation • Communications • Capital Markets and Trade Finance

  5. Eligibility of Projects • Eligibility Aspects: • at least 50% private participation • greenfield, capital expansion or rehabilitation • technical, financial, economic, environmental viability • positive developmental impact

  6. PRI Products • LENDING • A-Loans • B-Loans • GUARANTEES • Political Risk Guarantees • Credit Guarantees

  7. Financial Instruments - Loans A-Loans(IDB account) • Long-term loans for limited/non recourse or corporate finance structures • Per project limit of up to 25 or 40 percent of total project costs, to a maximum of US$75 million • Tenor up to 20 years • Market-based pricing

  8. Financial Instruments - Loans B-Loans(market participation) • Syndicated loan participations with commercial banks and/or institutional investors • IDB is lead lender and lender of record • Work with Arranger or Placement Agent • Advantages for commercial banks • IDB “umbrella” • country ceilings • withholding taxes

  9. Financial Instruments - Guarantees Political Risk Guarantees • Convertibility, Transferability, and Expropriation of Funds • Breach of Contract • Other political risks • Per project limit of up to 50 percent of total project costs, to a maximum of US$150 million

  10. Financial Instruments - Guarantees Credit Guarantees • Flexible instrument - comprehensive, rolling, selected risks, selected tenors, local currency, USD • Per project limit of up to 25 or 40 percent of total project costs, to a maximum of US$75 million

  11. PRI Portfolio Highlights: 1995 - present • 61 projects • 16 countries • 81 financial institutions from 15 countries • Total Project Costs of US$16 B

  12. PRI Portfolio Sector Concentration 1995-2003 (number of projects)

  13. Transaction Cycle • Approval Process, Financial Closing and After: • eligibility and mandate • due diligence review • credit committee • negotiate terms and conditions • Board of Executive Directors • complete syndication • financial closing and disbursement • ongoing administration

  14. Consulting Opportunities with PRI • Due Diligence and Monitoring Areas: • Technical • Market • Economic • Environmental and Social • Financial

  15. Consulting Opportunities with PRI • Due Diligence: • Mandate • Request for Proposals • Proposal evaluation • Consultant selection • Consultant Services Agreement • Monitoring: • Financial Closing • Request for Proposals • Proposal evaluation • Consultant selection • Consultant Services Agreement

  16. Contact Information for Consultants Send firm’s information to: Norma Lally Private Sector Department Inter-American Development Bank 1300 New York Avenue, NW Washington, DC USA 20577 Mail Stop E0213 E-mail: normal@iadb.org

  17. Inter-American Development Bank Private Sector Department (PRI) Financing Private Investment in Infrastructure in Latin America and the Caribbean April 16, 2004