COMMERCIAL AND POLITICAL RISK MITIGATION AND …

COMMERCIAL AND POLITICAL RISK MITIGATION AND CREDITENHANCEMENT SOLUTIONS

Expanding export and investmentopportunity in our member countries

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S O L U T I O N S F O RBANKS AND FINANCIALINTITUTIONS

TRADE CREDIT INSURANCE OFFERINGS1

COVERED RISKS• Insolvencyoftheobligor.• Failureorrefusaloftheobligortopayonduedate.• Currencyinconvertibilityandtransferrestrictionsimposedbytheobligor’scountry.• Expropriation,confiscationoradversegovernmentinterventioninthebusinessoftheobligor.• Warorcivildisturbanceintheobligor’scountry.

KEY BENEFITS• Protectsbalancesheetagainstlossesduetocommercialand non-commercial(i.e.political)risks.• Improvescapitaladequacyviacapitalrelief.• OptimizesBalanceSheetbyde-riskingaportionoftheportfolio.• BetterreflectioninICAAPandCRMtechniques.• Providesadditionalheadroomcapacity.• Reducesportfoliocostusingthecreditratingofahighlyratedmultilateralinstitution.• Minimizesnon-performingassets.• Enhancesbusinessvolume.• HelpsinstructuringShariahcompliantfinancingfacilities.

ELIGIBILITY• Banks/FinancialInstitutionsdomiciledinICIECMemberCountries.• Banks/FinancialInstitutionsdomiciledinICIECNon-memberCountries ownednotlessthan50%bytheIsDBorbynationalsofaMemberCountry.• Banks/FinancialInstitutionsofferingShariahcompliantproducts.• Banksthatfinancestrategicexportstomembercountries.

TENOR OF COVER

Upto7years

CREDIT INSURANCE PRODUCTS• DocumentaryCreditInsurancePolicy(DCIP)• BankMasterPolicy(BMP)

InsuranceofLettersofCredit/BuyerCreditInsurance

KEY OBJECTIVES• De-riskingcrossbordertrade• Helpingmembercountriestobolsterexports

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HOW IT WORKS

Documentary Credit Insurance Policy (DCIP)

Bank Master Policy (BMP)

1.ImporterarrangesissuanceofL/C.2.TheissuingbankissuesanLCtotheexporter’sbank.3.Theexporter›sbankappliestoICIECtoinsuretheLC.ICIECinsurestheLCuptoacertain

percentage(e.g.90%).TheInsuredisrequiredtokeeptheuninsuredamountonitsownaccount.4.Incaseofnon-paymentbyissuingbank,theexporter›sbanksubmitsclaimandICIECpays

compensation(90%oftheloss).5.ICIECrecoversfromtheissuingbankandpays10%backtotheexporter’sbank.

Buyer

Exporter’s Bank Exporter

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4

Importer

IssuingBank

Exporter’sBank

Exporter

1

2

3

4

5

1.Theexporter’sbankconcludesaninsurancecontract(BankMasterPolicy)withICIECuptoacertaininsuredpercentage(e.g.90%)andpaysthepremium.

2.ThebankprovidesIslamicfinancingtotheexporterorimporterwiththepurchasecontractassecurity.3.Incasethebuyerfailstopay,thebankfilesaclaimwithICIEC,whichindemnifiesthebankforupto

90%oftheloss.4.ICIECrecoversfromthebuyerandreturnsthe10%uninsuredsharetothebank.

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POlITICAl RISk INSURANCE AND CREDIT ENhANCEmENT OFFERINGS2

KEY BENEFITS• Facilitatesaccesstofinance.• Protectsbalancesheetagainstlossesduetonon-commercial(i.e.political)risks.• Attractsadditionalprojectcapital.• Enablesthepenetrationofhigh-riskmarkets.• Reducescostoffunding.

ELIGIBILITY• Newinvestments,acquisitionorexpansionofexistinginvestments/projects.• InvestmentnotprohibitedbyShariah.• InvestmentsbeingundertakeninaMemberCountry.

KEY OBJECTIVES• De-riskingForeignDirectInvestmentforinvestors,sponsorsandlenders.• Facilitatingcross-borderInvestments(Equity,DebtandLoanGuarantees).• Scalingupdevelopmentalimpactformembercountries.

COVERED RISKS• Currencyinconvertibilityandtransferrestrictions.• Expropriation.• Warorcivildisturbance.• Breachofcontract.

a. PoliticalRiskInsuranceforEquityInvestments,DebtFinanceandLoanGuarantees

COVERED RISKSNon-HonoringofSovereignFinancialObligations

• Non-HonoringofFinancialObligationsbythesovereign/ sub-sovereign/State-ownedEnterprises(SOEs).

b.Non-HonoringofSovereignFinancialObligations/PoliticalRiskInsuranceofCross-BorderLoans

S O L U T I O N S F O RBANKS AND FINANCIALINTITUTIONS

(InvestmentInsurance)

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TENOR OF COVER

Upto20years

INVESTMENT INSURANCE PRODUCTS• Non-HonoringofSovereignFinancialObligations.• ForeignInvestmentInsurancePolicy(FIIP)forFinancingFacility.• ForeignInvestmentInsurancePolicy(FIIP)forLoanGuaranteeFacility.

HOW IT WORKS

Investor Host CountryGovernment

Project

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1

1. InvestorsubmitsapreliminaryapplicationtoICIEC,ICIECgivesitsinitial‘in-principle’approvalandrequestsafulldetailedapplicationandpaymentofapplicablefees.

2. ApplicantsubmitscompletedMainApplication.Onthebasisofthedetailedapplication,ICIECwillassesstheproject/countryrisks.

3. ShouldICIECmanagementapprovetheinsurance,ICIECwillissueaninvestmentinsurancepolicytotheinvestor.

4. ICIECwillobtainthenon-objectionofthegovernmentofthehostcountry.5. Incaseofriskoccurrence,theinvestorsubmitsaclaimtoICIECandICIECpaysthe

compensation.

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Upto7years

TENOR OF COVER

ELIGIBILITY• NationalsofaMemberCountry.• CorporationsorotherjuridicalentitieslocatedinICIECmembercountriesorownedat

least50%bytheIsDBorbyaMemberCountryiflocatedinNon-membercountries.• Goodsshouldhaveatleast20%-30%value-addedfromoneormoreMemberCountries.• Incaseofcapitalgoodsorstrategiccommodities,theabovecriteriaarenotapplicable.

However,thebuyershouldbeinaMemberCountry.• GoodsnotprohibitedbyIslamicShariah.

KEY BENEFITS• Protectsbalancesheetagainstnon-paymentofexportreceivables.• Enhancescompetitiveness.• Increasesinternationalsalesbyofferingflexiblepaymenttermstooverseascustomers.• Offerstocustomersopenaccountcredittermswhileprotectingtheinsuredagainst

creditrisk.• Helpsaccessworkingcapitalfacilitiesfrombanksbyassigningtheinsurancepolicyto

thebanksassecurity.

COVERED RISKS• Insolvencyofthebuyer/Issuingbank.• Failureorrefusalofthebuyertopay.• Refusalofthebuyertoacceptgoodsaftershipment.• Arbitrarycancellationofthecontractbythebuyer.• Currencytransferrestrictionsbythebuyer’scountry/issuingbank’scountry.• Expropriationbythegovernmentofthebuyer.• Warorcivildisturbanceinthebuyer/issuingbank’scountry.

S O L U T I O N S /

CORPORATESTRADE CREDIT INSURANCE OFFERINGS1 InsuranceofSupplierCredit

KEY OBJECTIVES• De-riskingcrossbordertrade• Helpingmembercountriestobolsterexports

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CREDIT INSURANCE PRODUCTS

• ComprehensiveShort–TermPolicy(CSTP)• SpecificTransactionPolicy(STP)• SpecificTransactionPolicy(STP)(ContractFrustration)

HOW IT WORKS

1. Exporterentersintoasalecontractwithimporters/buyers.2. TheexporterconcludesaninsurancecontractwithICIECtocovernon-payment

risksofuptoacertainpercentage(e.g.90%)andpaysthepremium3. TheexportershipsthegoodstothebuyersanddeclarestheshipmentstoICIEC4. Incaseoneofthebuyersfailstopay,theexportersubmitsaclaimtoICIEC

whichindemnifiestheexporterforupto90%ofthecoveredamount.5. ICIECrecoversfromthebuyerandpays10%sharetotheexporter

Exporter Importer

3

1

52 4

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ELIGIBILITY

• Foreigninvestment/projectinMemberCountries.• Newinvestment,acquisitionorexpansionofexisting

investments/projects.• InvestmentsshouldnotbeprohibitedbytheIslamicShariah.

KEY BENEFITS

• Protectsbalancesheetagainstlossesduetonon-commercialrisks.• Attractsadditionalprojectcapital.• Enablesthepenetrationofhigh-riskmarkets• Involvementinaprojectofamultilateralinstitution(suchasICIEC) isitselfariskmitigant.• Actsasadeterrenceagainstadversegovernmentactionagainsttheproject.

COVERED RISKS

• Currencyinconvertibilityandtransferrestrictions.• Expropriation.• Warandcivildisturbance.• Breachofcontract.

TENOR OF COVER

Upto20years

S O L U T I O N S /

CORPORATESPOlITICAl RISk INSURANCE AND CREDIT ENhANCEmENT OFFERINGS2

KEY OBJECTIVES• De-riskingForeignDirectInvestmentforinvestors,sponsorsandlenders.• Facilitatingcross-borderInvestments(Equity,DebtandLoanGuarantees).• Scalingupdevelopmentalimpactformembercountries.

(InvestmentInsurance)

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Investor Host CountryGovernment

Project

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1

• ForeignInvestmentInsurancePolicy(FIIP)forEquity

HOW IT WORKS

1. TheinvestorsubmitsapreliminaryapplicationtoICIEC.ICIECprovidesitsinitial‘in-principle’approvalandrequestsafulldetailedapplicationandthepaymentofapplicablefees.

2. ApplicantsubmitsacompletedMainApplication.Onthebasisofthedetailedapplication,ICIECwillassesstheproject/countryrisks.

3. ShouldICIECmanagementapprovetheinsurance,ICIECwillthenissueaninvestmentinsurancepolicytotheinvestor.

4. ICIECwillobtainthenon-objectionofthegovernmentofthehostcountry.5. Incaseofriskoccurrence,theinvestorsubmitsaclaimtoICIECandICIECpays

thecompensation.

INVESTMENT INSURANCE PRODUCTS

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COVERED RISKS

• CommercialandPoliticalRisks.

KEY BENEFITS

• Providecapacity-buildingsupportforECAsinMemberCountries.• ProvidetechnicalassistanceintheestablishmentofECAsinMemberCountries.• Providecreditinformationservices.• JointmarketingandtechnicalassistancetotheECAsofMemberCountries.• HelpECAsinnon-MemberCountriestocoverprojectsinMemberCountries.

ELIGIBILITY

• ExportsfromICIECMemberCountriestoanycountryintheworld.• TheinflowofcapitalandinvestmentsfromtheworldintoICIECMemberCountries.• DomesticsalesofexportersinICIECMemberCountries.• ImportofstrategicandcapitalgoodsfromtherestoftheworldtoICIECMember

Countries.• InsuredgoodsshouldnotbeprohibitedbyIslamicShariahandshouldhaveatleast

30%value-addedinanyICIECMemberCountries.

• 2yearsshortterm• 7yearsmediumterm• 20yearsforeigninvestment

TENOR OF COVER

S O L U T I O N S /EXPORT CREDIT AGENCIES/ INSURERS/ EXIMBANKS

• QuotaShareTreaty• ExcessofLoss• ReinsuranceFacultativeAgreement

PRODUCTS

ExPORT CREDIT AND INvESTmENTINwARD REINSURANCEReinsurance/Co-insurance/Fronting

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Established in 1994 in Jeddah - Saudi Arabia as a multilateral institution and member of the Islamic Development Bank Group

ICIEC is the only multilateral export credit and investment insurance Corporation in the world that provides Shariah Compliant insurance and reinsurance solutions

OwnedbyAAAratedIslamicDevelopmentBankand47countrieswhicharemembersoftheOrganizationofIslamicCooperation

AuthorizedCapitalIslamicDinar(ID)400million(equivalenttoUSD552million)(1ID=USD1.38)

RatedAa3byMoody’swithaStableOutlook.

PioneerofShariah-compliantexportcreditandinvestmentinsuranceandreinsurancesolutions.

OURVISIONToberecognizedasthepreferredenableroftradeandinvestmentforsustainableeconomicdevelopmentinMemberCountries.

ICIECSTRATEGY• Toenhanceeconomicdevelopmentinmembercountriesandensurefinancialsustainability.

• Tobethepreferredenablerofeconomicandsocialdevelopmentinmembercountries,usingtradecreditandinvestmentinsurancesolutionsasatool.

OURMISSIONTofacilitatetradeandinvestmentbetweenmembercountriesandtheworldthroughShariah-compliantriskmitigationtools.

I C I E C A T A

GLANCE

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CREDIT INSURANCE

Tofacilitatesmembercountries’exportstotherestoftheworld.

Tofacilitatesimportofstrategicandcapitalgoodsbymembercountriesfromnon-membercountries.

MEMBER COUNTRIES

REST OF THEWORLD

MEMBER COUNTRIES

REST OF THEWORLD

INVESTMENTINSURANCE

INTRA-OICCOOPERATION

Tofacilitatestheflowofforeigndirectinvestmentintomembercountries.

Facilitatetrade,investmentandinformationsharingbetweenOICmembercountries.

MEMBER COUNTRIES

REST OF THEWORLD

MEMBER COUNTRIES

MEMBER COUNTRIES

ICIEC Mandate is to Expand Commercial Transactions and Encourage Investment Flows into OIC Member Countries

MANDATE

ICIECalsosupportsinternationalexporterssellingtomembercountries,ifthetransactionsareforcapitalgoodsorstrategiccommodities.

ICIECservesitsmandatebyprovidingriskmitigation&creditenhancementsolutionstomembercountries’exporterssellingtobuyersacrosstheworld,andtoinvestorsfromacrosstheworldinvestinginmembercountries.

ICIECmandateistopromotecross-bordertradeandforeigndirectinvestment(FDI)initsmembercountries.

I C I E C A T A

GLANCE

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CentralAsia&EuropeAlbania,Kazakhstan,Uzbekistan,Turkmenistan,Turkey

SouthEastAsiaBangladesh,Brunei,Indonesia,Iran,Malaysia,Pakistan

ArabAsianCountriesBahrain,Iraq,Jordan,Kuwait,Lebanon,Oman,Palestine,Qatar,SaudiArabia,Syria,UAE,Yemen

East&CentralAfricaCameroon,Chad,Comoros,Djibouti,Gabon,Mozambique,Uganda

SouthAmericaSuriname

WestAfricaBenin,BurkinaFaso,Côted’Ivoire,Gambia,Guinea,Mali,Niger,Nigeria,Senegal

NorthAfricaAlgeria,Egypt,Libya,Mauritania,Morocco,Sudan,Tunisia

ICIEC Supports Trade & Investment Flows in 47 Member Countries

Top 10 shareholders

SHAREHOLDING

50.69%20.28%

4.53%3.38%2.53%2.53%2.20%1.69%1.69%1.69%

IsDBSaudi ArabiaEgyptIranKuwaitUAEKazakhstanMoroccoQatarTurkey

41%

Bahrain 1.26%Malaysia 0.93%Pakistan 0.84%Nigeria 0.74%Libya 0.51%Algeria 0.34%Tunisia 0.34%Yemen 0.34%Sudan 0.25%Burkina Faso 0.23%Bangladesh 0.17%Indonesia 0.17%Gambia 0.17%

8%

Other shareholders Turkmenistan 0.17%Iraq 0.17%Jordan 0.17%Lebanon 0.17%Oman 0.17%Albania 0.08%Benin 0.08%Cameroon 0.08%Chad 0.08%Comoros 0.08%Djibouti 0.08%Gabon 0.08%Guinea 0.08%

Mali 0.08%Mauritania 0.08%Mozambique 0.08%Niger 0.08%Palestine 0.08%Senegal 0.08%Suriname 0.08%Syria 0.08%Uganda 0.08%Cote D′Ivoire 0.08%Uzbekistan 0.08%Brunei Darussalam 0.08%

51%

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ICIEC headquartersIsDBGroupHQComplex,KingKhalidRoad,P.O.Box15722Jeddah21454KingdomofSaudiArabiaTel.:(+966)126445666Fax:(+966)126379755

KingdomCentre,AlOlayaStreet,10thfloor,OffNo.1005P.O.Box230011Riyadh11321KingdomofSaudiArabiaTel.:(+966)112110072(*OperationalstartatQ22020)

Riyadh, Saudi Arabia Dubai, UAEOffice201,Building12,BaySquare,BusinessBayP.O.Box:114462,Dubai,UAETel:(+971)42776257/42776256

Istanbul, TurkeyIsDBGroupCountryGatewayOfficeNO:1,Kat:31Daire:122Maslak,Sariyer,Istanbul-TurkeyTel.:(+90)2122348100-Ext5556

Rabat, moroccoAvenueAnnakhilang.AvenueAlHaour,HayRyad10104Rabat,RoyaumeduMarocTel.:(+212)537548800

Dakar, SenegalIsDBGroupRegionalOffice18BoulevarddeRepublique,P.O.Box:6253DakarEtoileSenegalTel.:(+221)338891144-Ext:7735

Dhaka, BangladeshIsDBBhaban(Level-10),E/E-A,RokeyaSharaniSher-e-BanglaNagar,Dhaka-1207BangladeshTel.:(+880)29183460/29183461/29183462

Jakarta, IndonesiaIsDBCountryGatewayOffice35C,Office8,Jl.JendSudirmanKav52/53Senopati,Jakarta12190IndonesiaTel:(+62)2129333468-Ext5625

Future Office Cairo, Egypt

PRESENCEG L O B A L

COMMERCIAL AND POLITICAL RISK MITIGATION AND CREDITENHANCEMENT SOLUTIONS