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IFC, partner of Municipalities for a
successfull introduction of the private
sector in waste management services
April 201...
Agenda
1. Who we are
2. What we do
3. Sector Experience
International
Bank for
Reconstruction
and
Development
1945
Lends to governments
of middle income
developing countries.
Int...
IFC’s Global Reach
100+ country and regional advisory services offices worldwide
Dakar
Nairobi
Johannesburg
Cairo
Washingt...
IFC also provides technical assistance and advice to
governments and businesses
Investments Advisory
IFC is the world’s la...
Investment (“Buy-side”) Advisory (“Sell-side”)
• We advise governments on how attract private sector
investment in infrast...
• IFC’s PPP Transaction Advisory Services department specializes in advising public
sector on the introduction of private ...
Agenda
1. Who we are
2. What we do
3. Sector Experience
Options for Private sector participation
Full Divestiture
Technical
Assistance
Service
Contract
Management
Contract
Lease
...
Equipment providers
Insurance Companies
Lenders
City / Households
Government
Operator
Shareholders
ConstructorSub-Construc...
... its financing, or…
Public Sector
Special Purpose
Vehicle
Investors
Equity
Bank (s)Debt Financing
Planning/Construction...
…the design, build and operate structure (“DBO”)
The private sector brings its expertise in the design (choice of
technol...
IFC’s Two Phased Implementation Approach
PREPARATION PHASE
Technical
Review
Financial/
Operational
Review
Legal Review
Pre...
Typical Timeline in PPP Process
Define
Project
Review of
PPP
options
Market
sounding
Project
Approval
Planning
Phase
Marke...
Why IFC PPP Transaction Advisory?
Experience
Investors
(private
sector and
IFI)
Transparent
tender
process
• IFC guarantee...
• Do not be prescriptive in the choice of technology and collection cycle.
• Temper any expectation that a PPP solution wi...
IFC Solid Waste Management Projects
Agenda
1. Who we are
2. What we do
3. Sector Experience
Water and Waste
Recent activity in the water and waste sectors
Loan
Construction facility
and preferred shares
in desalina...
Contacts
Cesar Vargas
PPP Transaction Advisory Europe,
xxxx
xxxxxxx
Web Site: www.ifc.org
Bernard Atlan
Sector Leader– Was...
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Capital Summit 2015 - IFC, partner of Municipalities for a successfull introduction of the private sector in waste management services

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IFC, partner of Municipalities for a succesfull introduction of the private sector in waste management services - presentation held within the Capital Summit 2015 organized by NALED and City of Belgrade, with the support of Elnos group, Star Refrigeration&Emerson Techologies and Siemens.

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Capital Summit 2015 - IFC, partner of Municipalities for a successfull introduction of the private sector in waste management services

  1. 1. IFC, partner of Municipalities for a successfull introduction of the private sector in waste management services April 2015, Belgrade Creating opportunity where it’s needed most
  2. 2. Agenda 1. Who we are 2. What we do 3. Sector Experience
  3. 3. International Bank for Reconstruction and Development 1945 Lends to governments of middle income developing countries. International Finance Corporation 1956 Provides loans, equity and technical assistance to stimulate private sector investment in developing countries. International Development Association 1960 Provides concessional loans to governments of the poorest countries. Multilateral Investment Guarantee Agency 1988 Provides guarantees to foreign investors against non- commercial risk International Centre for Settlement of Investment Disputes 1966 Settles investment disputes between foreign investors and host countries. WORLD BANK GROUP IFC is the private sector arm of the World Bank Group, with a mission to reduce poverty by promoting private sector investment in developing countries
  4. 4. IFC’s Global Reach 100+ country and regional advisory services offices worldwide Dakar Nairobi Johannesburg Cairo Washington Mexico City Bogota Beunos Aires Sao Paulo Port-of-Spain Moscow IFC HQ/Hub Offices IFC Operational Centers IFC Country Offices Hong Kong New Dehli Almaty Istanbul
  5. 5. IFC also provides technical assistance and advice to governments and businesses Investments Advisory IFC is the world’s largest multilateral provider of financing for private enterprises with over US$26 billion in outstanding investment commitments •Loans •Equity •Guarantees Environment & Social Sustainability Access to Finance Business Environment PPP Transaction AdvisoryEnterprise Assistance IFC’s Main Business Lines IFC has two business lines: Investments and Advisory
  6. 6. Investment (“Buy-side”) Advisory (“Sell-side”) • We advise governments on how attract private sector investment in infrastructure • To date, we have advised on 165 projects in over 60 countries, mobilizing over $8 billion of private sector investment IFC’s Main Business Lines • We lend to and invest equity in private-sector businesses. • Europe and Central Asia represent 22% of the global portfolio of $12.2bn, or approximately $2.7bn in commitments IFC is an investor for its own account and a service provider to third parties. Consumer & Social Services 4% Infrastructure 13% Manufacturing 7% Other Sectors 1% Telecommunications & Information Technology 3% Agribusiness & Forestry 4% Financial Markets 25% Funds 4%Oil, Gas & Mining 2% Trade Finance 38% Investments by Industry, FY11 Sub-Saharan Africa 25% East Asia and Pacific 13% South Asia 11% Latin America and Caribbean 9% Global 17% Europe and Central Asia 17% Middle East and North Africa 8% Advisory Services by Region, FY11
  7. 7. • IFC’s PPP Transaction Advisory Services department specializes in advising public sector on the introduction of private sector participation in the delivery of infrastructure services . We work on the following types of transactions:  Structuring Public-Private Partnerships (e.g. concessions, BOFT)  Disposal of publicly owned assets  Upstream advisory work (regulatory, legal framework) • Covering the following sectors: roads, rail, power, airports, ports, water, waste, mining, education and health. • The IFC PPP Transaction Advisory is organized regionally within the following 6 main regions and the HQ in Washington, USA: Latin America & Caribbean, East Asia, East Asia and Pacific, Middle East and Northern Africa, Africa and Europe & Central Asia. IFC PPP Transaction Advisory
  8. 8. Agenda 1. Who we are 2. What we do 3. Sector Experience
  9. 9. Options for Private sector participation Full Divestiture Technical Assistance Service Contract Management Contract Lease Contract Concession Contract BFOT 3-5 yrs 5-15 yrs 1-3 yrs 15-25 yrs Risktransferredtoprivatesector As the contract term increases, an increasing amount of risk can be allocated to the private sector Contract Duration Limited risk transfer Government control Full risk transfer No government control Substantial risk transfer Government control Most common PPP model 1 2 3 4 5 7 Design Build Operate 6 15-20 yrs
  10. 10. Equipment providers Insurance Companies Lenders City / Households Government Operator Shareholders ConstructorSub-Constructors Typical PPP Projects: the BFOT structure, and… Banks Project Company Sub-contracts Guarantees Incomes Concession Building Contract Shareholders Agreements
  11. 11. ... its financing, or… Public Sector Special Purpose Vehicle Investors Equity Bank (s)Debt Financing Planning/Construction/ Refurbishment Operation/Maintenance Construction Company Sub-Contracts Facility Management - Provider Sub-Contracts
  12. 12. …the design, build and operate structure (“DBO”) The private sector brings its expertise in the design (choice of technology), management of the construction / site rehabilitation, and operations, while… The public sector provides financing. The advantages for the contracting public authorities are: - Have access to the best available currently available and proven technological solution and operation practices (optimization of O&M costs) - Have access to the best practices in term of financial and procurement management. - Lower the cost of finance by beneficiating from the credit standing of the public sector. Therefore having a positive impact on the user tariff, while: - Having access to all best practices in term of environmental and social responsibility - Beneficiating from knowledge transfer •Presentation Title
  13. 13. IFC’s Two Phased Implementation Approach PREPARATION PHASE Technical Review Financial/ Operational Review Legal Review Preliminary Memo/ Research Market sounding Agree the PPP structure Phase 1: Diagnostic and Strategic Review (DSR) (Legal Consultant) (Technical Consultant) IMPLEMENTATION PHASE Info Memo – Marketing/ Road show Bidder Prequalification Valuation Report Discussions with bidders Bidders’ Due Diligence Bid, Evaluation & Closing Negotiate Bid Documents Phase 2: Restructuring and Implementation 3-6 months 10-14 months PPP Transaction Advisory does not only produce reports, our role does not finish until a suitable private investor has committed to execute a project* * Note: PPP transaction advisory only charges a portion of the project costs, if the project is not successfully closed (i.e. IFC loses money if our advise does not bring you a suitable investor)
  14. 14. Typical Timeline in PPP Process Define Project Review of PPP options Market sounding Project Approval Planning Phase Marketing Phase Solicitation & Evaluation Award (3 months)(2-4 months) (3-6 months) (1-4 months) RfQ Issuance Information Memorandum Issue RfP Marketing And Short listing Tender Period Tender Evaluation Select Preferred Bidder Contract Negotiation Fund Approval Financial Close DIAGNOSTIC PHASE IMPLEMENTATION PHASE
  15. 15. Why IFC PPP Transaction Advisory? Experience Investors (private sector and IFI) Transparent tender process • IFC guarantees a clean and transparent tender process ensuring political cover from potential accusations from opposition parties; • IFC has committed relationships with investors and other international financial institutions (e.g. World Bank, EBRD, IMF etc.); • IFC is in direct contact with all the key solid waste operators and understands how the project should be structured to raise interest; • Excellent access to debt providers; debt providers know that IFC will structure a bankable transaction; • IFC has extensive experience in the sector and similar environments with reputable and top quality operators.
  16. 16. • Do not be prescriptive in the choice of technology and collection cycle. • Temper any expectation that a PPP solution will not require a gate fee… • Ensure there is appropriate political support for the proposed project. • Realistic risk allocation matrix is of utmost importance - what are the risks and who is the best party to handle those risks? • Review the regulatory framework’s soundness. • Get the key stakeholders to agree on key items before the tender process, not after. • Speak to investors early to gauge their interest. • Engage in a sustainable solution. Lessons Learned WHAT’S IMPORTANT FOR SUCCESSFUL PPP?
  17. 17. IFC Solid Waste Management Projects
  18. 18. Agenda 1. Who we are 2. What we do 3. Sector Experience
  19. 19. Water and Waste Recent activity in the water and waste sectors Loan Construction facility and preferred shares in desalination complex in Tianjin, China IFC Principal Division Loan €25m to fund expansion into Middle East and Africa IFC Principal Division Privatization Privatization of Water and Electricity sectors in Gabon IFC mandated as Financial Adviser Reconstruction Reconstruction of Sao Paulo water supply in Brazil IFC mandated as Financial Adviser Advisory Advisory Services of ACB-BOT Water in Cambodia IFC mandated as Financial Adviser Advisory Water and other waste treatment in the Gambia IFC mandated as Financial Adviser Investment $25m of Investment in Chennai Water in India IFC Principal Division Concession Dakar Long-term water supply in Senegal IFC mandated as Financial Adviser PPP Private Sector Participation in Mauritius Water and Sanitation IFC mandated as Financial Adviser Privatization Lagos State Water Privatization in Nigeria IFC mandated as Financial Adviser Privatization Privatization of New Cairo Water Utility in Egypt IFC mandated as Financial Adviser Investment $200,000 for Clearwater fishing Project in Guinea Bissau IFC Principal Division
  20. 20. Contacts Cesar Vargas PPP Transaction Advisory Europe, xxxx xxxxxxx Web Site: www.ifc.org Bernard Atlan Sector Leader– Waste management PPP Transaction Advisory Bul. Kralja Aleksandra 86-90 - 3rd Floor 11000 Belgrade, Serbia Tel: (381) 11 330 8948 Fax: (381) 11 3023 740 E-mail: BAtlan@ifc.org Web Site: www.ifc.org

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