Presentation By : Hussein Iman Chief Investment Officer

Presentation By :

Hussein Iman Chief Investment Officer

South Africa Regional Resource Center African Development Bank

MOZ2013MAPUTO

Who We are

• AfDB is the Pan-African Multilateral Development Bank

• Infrastructure Finance, Private Sector Development, and Regional Integration are institutional top priorities

• AfDB leverages its AAA balance sheet to support the economic development in its regional member countries

• AfDB has consistently been a major financier to the Extractive Industry & Energy Sector in Africa

3

AfDB’s lending operations

AfDB has 2 lending windows: Public and Private

Public window

Governments or state owned enterprises

Sovereign

Concessionary terms

Private window

-Privately owned enterprises - “Financially strong”

government owned enterprises

Non sovereign

Commercial terms

Recipient

Guarantee

Financial terms

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• Upstream – Upstream gas infrastructure, Upstream production for Indigenous entrepreneurs (oil/gas)

• Midstream – Gas Processing Plants, Pipelines (oil/gas), Storage (oil/gas)

• Downstream – Refineries, Petrochemical/Fertilizer Plants, LNG Plants

The AfDB finances projects in Oil &Gas & Coal Sectors to promote availability of cleaner energy resources and promote local value addition

5

What the ADB is doing in the Mining Sector

• Increase the impact of Mining Sector in RMCs’ Social and Economic development

• Build infrastructure support with highly integrated networks (Power, roads, railways and ports)

• Monitoring and Enforcing Environmental compliance

Act as a :

Financier and invest our financial resources to pursue economic development goals ahead of profit

Advisor and leverage our knowledge of sustainable development practices

Partner and help mobilise our public and private sector counterparts in solving development issues

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Lessons Learnt from the Bank’s intervention in the extractive sector financing • Local participation in is key to maximizing benefits from the

sector (public or private)

• Role of Development Financial Institutions – (Advisory, financiers including infrastructure & monitoring )

• Local content development - SME business linkages

• Work force development - Education

• Enabling business environment - Legal and Regulatory framework- African Legal Support Facility

• Strong Institutions – key to the realization of project benefits ( Environment, Finance, Mining & Mineral, Education etc.,)

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• Senior Debt – tenor and currency adapted to project needs; debt arranging capacity:

– African Financing Partnership– DFI co-financing platform

– A-B Syndication Program– leveraging the AfDB Preferred Creditor Status

• Guarantees – partial risk, partial credit

• Subordinated Debt

• Equity – direct, or indirect (equity funds)

• Technical Assistance

The AfDB selects its financial instruments to meet investee company’s needs

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• Policy Level– foster policy design, promulgation & implementation

• Legal and Regulatory framework- African Legal Support Facility

• Technical Assistance for capacity building

• Specific Local content programs- SME linkages programs, LOC to financial institutions

The AfDB strongly supports Local Content Development

Examples of selected projects Examples of selected projects

SASOL natural gas project

A public-private partnership between the GOSA, GOM and Sasol

• South Africa - Mozambique• Investment ZAR 8.5 bn• ADB loan ZAR 550 mn• ADB roles

– Long term debt – Reduced cost of PRI

• Benefits– Reduction of air pollution – Jobs– Social benefits– Regional integration

• Capacity– 856 KM– 122 -183(MGJ/a) per annum

Moma Titanium Minerals Mine in Mozambique• One of the world’s largest known titanium minerals

deposits with >200 mt of contained ilmenite

»Phase I approx capacity:

--800 ktpa ilmenite, 50 ktpa zircon, 14 ktpa rutile

~7% OF GLOBAL FEEDSTOCK SUPPLY

•Phase II approx. capacity:

-1.2 mtpa ilmenite, 75 ktpa zircon, 21 ktpa rutile

~10% OF GLOBAL

FEEDSTOCK SUPPLY10

Kenmare Resources – World Class Kenmare Resources – World Class AssetAsset

the Mozambique natural gas project, on stream

2004• A pioneering project in partnership between Sasol and

the Mozambique and South African governments

Examples of selected projects Examples of selected projects

Nigeria Liquefied Natural Gas Project• Nigeria• Investment USD 2.1 bn• ADB loan USD 100 mn• ADB roles

– Political risk mitigation – Complementary financing– Advisor to local banks

• Benefits– Reduce gas flaring – adds value to a natural

resource – Jobs– Social benefits

• Capacity– Additional processing

capacity of 1.334 mscfd

Examples of selected projects Examples of selected projects HASDRUBAL OIL AND GAS FIELD DEVELOPMENT PROJECT

• Tunisia• Investment USD 1.3 bn• ADB loan USD 150 mn• ADB roles

– Corporate Loan – Financier during difficult time– Advisor – ESMS

• Benefits– Import substitution – Revenues to Government – foreign exchange earnings– Infrastructure development

• Capacity– 150 MCF/day– Onshore gas processing 16,000 b/d

of oil equivalent

During the financial crisis, the Bank played a countercyclical role

Examples of selected projects Examples of selected projects EGYPTIAN REFINERY COMPANY PROJECT

• Egypt• Investment USD 3.5 bn• ADB

– Senior Loan USD 200 mn– Sub Loan USD 25 mn

• ADB roles– Financier during difficult time– ESMS

• Benefits– Import substitution – Revenues to Government – foreign exchange earnings– Infrastructure development

• Capacity– 152,500 barrels/day

During the financial crisis, the Bank played a countercyclical role

Thank you

Hussein [email protected]