Marco Nindl, Trade Finance Banker, EBRD

1. 1
Workshop: Trade Financing for SMEsWorkshop: Trade Financing for SMEs
Introduction to the EBRD’s Trade Facilitation ProgrammeIntroduction to the EBRD’s Trade Facilitation Programme
(TFP) and its trade finance training initiatives(TFP) and its trade finance training initiatives(TFP) and its trade finance training initiatives(TFP) and its trade finance training initiatives
Marco NindlMarco Nindl
Ulaanbaatar, 12 October 2011Ulaanbaatar, 12 October 2011
OverviewOverview
Wh t i th EBRD d it TFP d h What is the EBRD and its TFP and how can
local companies including SMEs profit from
the programme?
 New ways of supporting local banks and their
clients by considering recent trends in trade
finance marketfinance market
 What technical assistance initatives exist to
support local trade finance

2. 2
Shareholders breakdown
Global Shareholder StructureGlobal Shareholder Structure
Triple-A Shareholders Form 60%
Shareholders breakdown
Japan
8 6%
EBRD
region
EU 27
Countries
(1)
62.7%
8.6% region
excluding
EU (2)
7.3%
USA
10.1%
Others
11.3%
(1) Includes European Community and European
Investment Bank each at 3%; France,
Germany, Italy, UK each at 8.6%
(2) Russia at 4%
As at 1 September 2010
What are the EBRD’s objectives?What are the EBRD’s objectives?
 To promote transition to market economies by
investing mainly in the private sector
 To mobilise significant foreign direct investment
 To support privatisation, restructuring and better
municipal services to improve people’s lives
 To encourage environmentally sound and
sustainable development

3. 3
12 65
 Invested over €62.0bn
€ billion
EBRD’s objectives achieved through financing theEBRD’s objectives achieved through financing the
private sectorprivate sector
4
6
8
10
15
25
35
45
55in more than 3,119
projects since 1991
 €9.0bn invested in 2010
in 380 projects
 Private sector > 79% of
EBRD fi albusinessvolume(ABV)
Netcumulativebusine
0
2
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
-5
5
Debt ABV Equity ABV Net Cumulative Business Volume
EBRD finance
 Debt 83%, Equity 17%
of EBRD finance
Annua
ssvolume
Reconciled as at 31 December 2010
EBRD Finances diverse range of enterprisesEBRD Finances diverse range of enterprises
Agribusiness,
9%
Equity Funds,
Transport, 13%
q y ,
4%
Financial
Power and
Energy, 9%
Telecoms
Informatics &
Media, 4%
Property and
Tourism, 3%
Institutions, 34%
Manufacturing
and Services,
11%
Municipal & Env
Inf, 6%
Natural
Resources, 6%
Unaudited as at 31 December 2010

4. 4
A network of 36 offices in 29 countries
More than half our bankers based in the region
Where we operate
EBRD in MongoliaEBRD in Mongolia
 Resident Office in Ulaanbaatar operationalp
since 2007
 Promote a sound investment climate, good
corporate governance and stronger institutions
 100% share of private sector projects
 Debt/Equity Investments: 77% / 23%
 Net business volume EUR 300.9 million
 Total project value EUR 877.2 million
*All figures cumulative as of March 2011

5. 5
EBRD in Mongolia: PrioritiesEBRD in Mongolia: Priorities
 Financing local enterprise growth and development: Debt and equity
investments to non-mining companies including smaller
t ti t t d d l t i l i ittransactions to nurture and develop entrepreneurial spirit,
including dedicated debt facilities focussed on the SME sector
with partner banks.
 Supporting the consolidation and strengthening of the financial sector:
Promoting institutional building and corporate governance of
selected banks and NBFIs through equity and debt finance, TFP
and local currency funding
 The sustainable development of the natural resources sector: Debt and
equity investments to mining companies, including smaller
projects upstream and downstream oil projects and infrastructureprojects, upstream and downstream oil projects and infrastructure
related mining projects
 Support for important infrastructure: Although constrained by current
legislation, EBRD will support municipal infrastructure projects,
especially private sector related projects, renewable energy
projects by cooperating with WB, ADB and bilateral donors.
Investment examplesInvestment examples
• Monos (pharmaceutical company) Debt & Equity• Monos (pharmaceutical company), Debt & Equity
$9.0mln (2010)
Transition Impact: Transfer of new skills and knowledge associated
with construction and operation a new green-field GMP (Good
Manufacturing Practice) standard manufacturing facility. Higher
product quality assurance for end-consumers stemming from
implementation of GMP.
• Ezio Foradori (cashmere producer), $0.4mln (2009)
Transition Impact: Increase competition in the sector, create linkages
and improve standards of corporate governance and quality control.

6. 6
Trade Facilitation Programme (TFP)Trade Facilitation Programme (TFP)
of EBRDof EBRD
Facilitates financing of all stages of the trade chain
Production
& Export
Transport Storage &
distribution
Receivables
Management
TFPTFP -- TargetsTargets
S t d d l t f i t ti l Support and development of international
trade finance in EBRD’s countries of
operation
 Support for regional banks to establish
business relationships with foreign banks
 Providing liquidity for trade finance

7. 7
TFPTFP –– How does it work?How does it work?
EBRD supports trade by providing:EBRD supports trade by providing:
 guaranteesguarantees that cover risks arising from trade finance
transactions:
 shortshort--term cash advances/financingterm cash advances/financing for pre-export
and post import as well as local trade finance purposes;;
 TC funded trade finance training and advisorytraining and advisory
serviceservice..
Two Main ComponentsTwo Main Components
Trade Facilitation Programmeg
(EUR 1.5 billion framework)
Trade Finance
Guarantee
Facility
Trade Finance
Cash
Facility
(fully operational
since 1999)
(launched in 2000)

8. 8
Different from/complementary to export credit insurance:
 Stand-by letters of credit (L/C) (under UCP 600)
TFPTFP -- GuaranteesGuarantees
 usually issued within 24 hours
 Cover all types of trade finance instruments issued by EBRD client banks:
letters of credit, including deferred payment/post-financing; bank payment
guarantees; bid bonds, performance bonds; advanced payment guarantees;
stand-by L/Cs, etc.
 Issued only to Confirming Banks, not to exporters or importers
 Payable 15 days after receipt of first written demand
C t 100% f th i l d liti l i k hi h t b Cover up to 100% of the commercial and political risk which cannot be
covered by commercial banks, commercial credit insurance or ECAs
 Cover exports, imports and distribution of imported goods in EBRD countries
of operation, irrespective of the country of origin (no origin rules)
 Tenor: max. 3 years
 Amounts: no minimum amount
Guarantee Structure and ApplicationGuarantee Structure and Application
EBRD issues a Stand-By
Banking InstrumentBanking Instrument
ApplicationConfirmation
Letter of Credit covering
the risks of Issuing Bank
towards the Confirming bank
Obligation Issuing
Bank,
Country of Operation
Obligation Receiving
Bank,
World Wide
BuyerSeller Underlying
Trade Transaction

9. 9
Sample:Sample: TFPTFP –– Import of car tyres andImport of car tyres and
spare parts to Mongoliaspare parts to Mongolia
 A German automobile
producer sells car tyres
and spare parts to
Mongolia, EUR 940,000
 A Mongolian bank issues
a L/C, confirmed by a bank
in Germanyy
 EBRD guarantees 100%
of the political and
commercial payment risk
ShortShort--term cash advances/financingterm cash advances/financing
Local Company
Local Bank (EBRD’s borrower)
•Takes local company risk
•Borrows from EBRD
•On-lends to the local company
Loan repayment Loan disbursement
EBRD
•Takes local bank risk
•Lends to the local bank against
sub-loan reports
Repayment to EBRD EBRD’s disbursement

10. 10
Sample: Export of wine from MoldovaSample: Export of wine from Moldova
A Moldovan wine A Moldovan wine
producer requires pre-
export finance for
purchase of agro-
chemicals and
equipment and export
of wine to Russia
EBRD grants a loan to EBRD grants a loan to
a Moldovan bank which
the bank can use to fund
a loan to the Moldovan
exporter (amount USD
170,000, tenor 8 months)
EBRD TFPEBRD TFP –– 1274 Transactions in1274 Transactions in
20102010
1. Russia (489)
2. Kazakhstan (118)
3. Georgia (112)
4. Belarus (105)
5. Ukraine (98)
6. Macedonia (74)
7. Azerbaijan (63)
8. Moldova (63)
9. Armenia (61)
10. Uzbekistan (24)
11. Serbia (23)
12. Tajikistan (20)
13. Bosnia (12)
14. Kyrgyz Republic (9)
15. Croatia (2)
16. Turkmenistan (1)

11. 11
TFP in MongoliaTFP in Mongolia
Currently 2 Issuing Banks:Currently 2 Issuing Banks:
Sample transactions of imports to Mongolia:
- Import of car tyres and spare parts from Germany
- Baby diapers from Taiwan
Advantages for Banks and ClientsAdvantages for Banks and Clients
N h f l l b k iNo cash cover from local banks is necessary,
hence a reduction in pricing for exporters and
importers
Confirming banks are able to test new business
relationship with issuing banks by receiving a
100% risk cover from the EBRD

12. 12
EBRD TFPEBRD TFP –– Top 20 Confirming Banks byTop 20 Confirming Banks by
Number of Transactions in 2010Number of Transactions in 2010
1. Commerzbank
2 D t h B k
11. Banco de Sabadell
2. Deutsche Bank
3. UniCredit Bank
4. UBS
5. HSBC Bank
6. Bank of New York
Mellon
7. LBBW
12. KBC Bank
13. JP Morgan Chase Bank
14. BHF Bank
15. Landesbank Berlin
16. Fortis Bank
17. Banca delle Marche7. LBBW
8. Intesa San Paolo
9. RZB
10. ING Bank
18. Banca Monte dei Paschi di Siena
19. Bank Hapoalim
20. Yapi ve Kredi Bankasi
TFPTFP –– Example of BeneficiariesExample of Beneficiaries
ABB Aesculap Agco Alcatel AlKo Alstom AtlasCopco Audi Aventis
Avtovaz Becher Bosch Braun Beko BMW Bosch Bull Cargill CarlZeissAvtovaz Becher Bosch Braun Beko BMW Bosch Bull Cargill CarlZeiss
Case Caterpillar Chemson Cincinnati Claas Classen Clariant Compaq
Daewoo DaimlerChrysler Deutz Dow Draeger Duferco Ebewe
Electrolux Ericsson Europay FujitsuSiemens GedeonRichter GKN
Glencore GM Grundig Hachette Heidelberger Honda Honeywell Hovis
Hyundai IBM Iglo JeanLion John Deere Johnson Juki KIA Leman
LouisDreyfus Lucent Lukoil Lurgi Makita MaxMara Mazda
MettlerToledo Michelin Monsanto Nagema Nestle Nike NisshoIwai
Opel Perstorp Pfaff Philips Pirelli MinskTractor Possehl Renault
RhonePoulanc Rohde&Schwarz RollsRoyce Samsung Sandvik
Schaller Schneider SEAT Severin Shell Siemens Skoda Stihl Sucden
Sulzer Sumitomo Tate&Lyle Tatra ThyssenKrupp Toshiba Totalfinaelf
Tractel Trafigura US-Steel Visa VoestAlpine Volvo Westfalia
WalterMatter YvesRocher Zeppelin ZF-Friedrichshafen

13. 13
TFP support for SMEsTFP support for SMEs
1,274 transactions in 2010
87% of all transactions are under EUR 1 million87% of all transactions are under EUR 1 million
462
651
300
400
500
600
700
Number of
Transactions
136
25
0
100
200
<100,000 0.1 - 1
mln
1 - 5 mln > 5 mln
Amount in EURs
TFP Business Volume p.a.TFP Business Volume p.a.
19991999 -- 20102010
900
300
400
500
600
700
800
Volume, € mln
0
100
200
300
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

14. 14
New Trends in the Trade and SupplyNew Trends in the Trade and Supply
Chain in Eastern Europe and CISChain in Eastern Europe and CIS
 payment terms change from L/C to open account
 Foreign suppliers establish subsidiaries in Eastern
European and CIS countries, resulting in increased
demand for financing of local distribution of
imported goods
 growing demand for receivables financing, credit
risk insurance and financing in Russian Roubles
EBRD TFPEBRD TFP –– New StructuresNew Structures
Fi i l l di t ib ti f i t Financing local distribution of imports
 Development of Factoring
 Financing in Russian Roubles and other local
currencies
 Co-financing with insurance underwriters
 Promotion of new trade finance solutions by means of
TC projects

15. 15
TFP GuaranteesTFP Guarantees –– Exports from France toExports from France to
RussiaRussia
Automobiles Peugeot Automobiles Peugeot
Moscow sells new vehicles
to an importer in Rostov na
Donu, Russia
 Center Invest Bank in
Rostov/Russia issues a
payment guarantee,
confirmed by BNP-Paribas
P i MParis or Moscow
 EBRD guarantees to BNP-
Paribas up to 100% of the
payment risk
Financing of distribution of imported goods:Financing of distribution of imported goods:
EBRD provides liquidity in form of cash advances in local or foreign currencyEBRD provides liquidity in form of cash advances in local or foreign currency
to client banksto client banks
1.THROUGH DEFERRED PAYMENT L/C EBRD
Peugeot France Car Dealer
in Russia
Bank in Russia
Sales Contract in EUR Guarantee
facility in EUR
TFP guarantee
facility in EUR
EBRD
Opens L/C in favour of Peugeot France with payment 3 -6 months after delivery
2 THROUGH CASH ADVANCES2. THROUGH CASH ADVANCES
Bank in Russia
Peugeot France Peugeot
Russia
Sales
contract
in EUR
Sales
contract
in RUB
Car dealer
in Russia
Loan facility in RUB
tenor 3 -6 months
after delivery
TFP cash advances in RUB

16. 16
Liquidity CrisisLiquidity Crisis –– EBRD’s ResponseEBRD’s Response
 Increase the TFP Programme limit from currently EUR 800 Increase the TFP Programme limit from currently EUR 800
mln. to EUR 1.5 bln.
 Increase existing TFP facilities
 Increase number of Issuing Banks
 Guarantee also deferred payment L/Cs, L/Cs with post-
financing and advanced payment guarantees
 Provide liquidity also in form of cash facilities to Issuing
Banks for trade finance transactions which cannot be funded byBanks for trade finance transactions which cannot be funded by
foreign commercial banks or export credit agencies (e.g. post-
financing for import of capital goods, local distribution of
imported goods, pre-export finance, trade between EBRD
countries of operation, factoring)
EBRD TFPEBRD TFP -- CoCo--Financing PartnersFinancing Partners
 ACE Global Markets (AGM) & Lloyd´s of London
 Confirming Banks
 Donor Risk Sharing Funds
 Export Credit Agencies
 FMO Netherlands
 OPEC Fund for International Development
 Private Investment Funds

17. 17
TFPTFP –– Technical Cooperation ProjectsTechnical Cooperation Projects
EUR 4.2 million have been
used for TFP TC
consultancy services
training of over 800 trade
finance staff of 200 banks
in 17 of EBRD’s Countries
of Operation
TFPTFP -- Trade Finance Training inTrade Finance Training in
MongoliaMongolia

18. 18
TFP Trade Finance Training & Advisory ProjectsTFP Trade Finance Training & Advisory Projects
2009 & 20102009 & 2010
Topics: trade finance practices,
advanced and structured trade
finance, factoring, UCP 600, fraud
prevention, correspondent
banking, restructuring trade
finance deals, legal proceedings in
connection with defaulted trade
finance transactions, e-learning,
etc.
Projects were generously sponsoredProjects were generously sponsored
by Taipei China, Switzerland, Italy, the
Netherlands, New Norway Cooperation
Fund, Western Balkans Fund, Early
Transition Country Fund, Special
Share-holder Fund of EBRD.
EBRD EEBRD E--Learning ProgrammeLearning Programme
 The ICC’s technology partner Coastline Solutions has assisted
EBRD to develop an online training programme incorporating ICCEBRD to develop an online training programme, incorporating ICC
content on rules and operations in trade finance;
 Project funded by the EBRD’s special shareholder’s fund and
offered free of charge to Issuing Banks in EBRD’s countries of
operations.
 To date 230 trade professionals from 70 banks in 15 countries
enrolled.

19. 19
EBRD EEBRD E--LEARNING CERTIFICATIONLEARNING CERTIFICATION
PROGRAMMEPROGRAMME
 This programme will improve basic/ advanced skills
d t h i f i t b k t d fi b iand techniques for inter-bank trade finance business
which operates under ICC set rules;
 The admitted participants enrolled for the online
training and upon completion of the course the
candidates are to be awarded with the ICC
certificate subject to exams outcome;certificate, subject to exams outcome;
 This training programme is available for the staff of
most active Issuing Banks and permits the
candidates to study during “off-work hours”.
EBRD EEBRD E--LEARNING CERTIFICATIONLEARNING CERTIFICATION
PROGRAMMEPROGRAMME
The e-learning program was launched in May 2010 and offers 7
d lmodules:
 Collections: Comprehensive training in Collections and URC 522
 Mentor 600: Comprehensive training in Letters of Credit and UCP 600
 DC Master: Advanced training in Letters of Credit
 ISP Master: Advanced training in Standby Letters of Credits,
Guarantees and ISP98Guarantees and ISP98
 Demand Guarantees URDG
 Incoterms2000®
 Environmental Issues in Trade

20. 20
EBRD EEBRD E--LEARNING CERTIFICATIONLEARNING CERTIFICATION
PROGRAMMEPROGRAMME
2012 Graduation Ceremony – 7 Feb in Moscow
In partnership with
 5th Annual Russia
& Eurasia Trade &
Investment Forum
 Best students to
receive furtherreceive further
scholarships and
sponsored training
programmes in
leading European
confirming banks

21. 21
EBRDEBRD –– Best Development Bank inBest Development Bank in
TradeTrade
 Readers of Global Trade Review
(GTR),Trade & Forfaiting Review
(TFR) and Trade Finance Magazine
have voted the EBRD in 2010
“Worldwide Best Development
Bank in Trade”
 EBRD invites other development
banks commercial financialbanks, commercial financial
institutions, export credit agencies
and donors to co-finance or co-
finance with the EBRD
www.ebrd.com/tfpwww.ebrd.com/tfp

22. 22
ContactsContacts
Financial Institutions - Trade Facilitation Programme (TFP)
European Bank for Reconstruction and Development
One Exchange SquareOne Exchange Square
London EC2A 2JN
United Kingdom
Tel: +44 20 7338 7614
Fax: +44 20 7338 6119/7029
e-mail: nindlm@ebrd.com
www.ebrd.com/tfp
THANK YOU!THANK YOU!THANK YOU!THANK YOU!
Marco NindlMarco Nindl
EBRDEBRD
Trade Facilitation ProgrammeTrade Facilitation Programme
+44 20 7338 7614+44 20 7338 7614+44 20 7338 7614+44 20 7338 7614
nindlm@ebrd.comnindlm@ebrd.com