Workshop on Large Project Finance Alastair Campbell – Project Finance Director

Strictly Private and Confidential
Workshop on Large Project Finance
Alastair Campbell
Director – Project Finance
Standard Bank – Corporate & Investment Banking Division
Maputo, 31 May & 1 June 2007
Table of contents
2
Page
Table of contents
2
Standard Bank around the globe
4
Projects on which this presentation has been based
6
The Nature of Mozambique’s soon to be developed Large Project Finance
8-9
Recommendations
11-12
Conclusion
13
Workshop on Large Project Finance – May 31 & June 1
3
The Standard Bank Group
An overview of the banks global presence
The Standard Bank Group
4
The Bank
Corporate and Investment
Banking Division of Standard
Bank
Standard Bank Around the Globe
Rooted in Africa, with strategic representation in
key sub-Saharan markets, Standard Bank is a
regional banking force with a global sweep.
Standard
Bank Group
Market capitalisation as at
December 2006: R113 billion
Retail
banking
Internationa
l
Stanbic
Africa
Corporate and
Investment
Banking
Banking,
investment,
insurance and
other financial
services to
individual
customers,
the
agricultural
sector and
small and
medium-sized
enterprises
throughout
South Africa
Investment
banking
activities and
private
banking
through
offices in 21
countries
outside Africa
Retail,
commercial
and
investment
banking
services in 16
countries
outside of
South Africa
Commercial and
investment
banking services
to larger
corporates in
South Africa,
foreign banks and
international
counterparts.
Liberty
Group
Value-added
financial and
non-banking
services both
locally and
internationally
STANLIB
Management
of institutional
and retail
funds,
investment
portfolio’s and
financial
product
development
Standard Bank has operations
throughout the world, operating in 38
countries outside of South Africa.
Property-related
finance and
advisory services
and management
of industrial,
office, retail,
specialised
property and
wholesale
residential
development
Interesting Facts
• 39,080 employees including Liberty Life, 31,905 in
South Africa
• Represented in 39 countries with an emerging
markets focus
• Over 700 branches in South Africa, 234 in the rest
of Africa
• Over 3,000 ATMs in South Africa, 314 in the rest of
Africa
• ZAR593 billion in assets
• Market capitalization of ZAR113 billion
Workshop on Large Project Finance – May 31 & June 1
5
Projects on which this presentation has been based
Tombstones
Tombstones of projects on which this presentation has been based
6
Mozal I
Mozal II
Sasol Natural
Maputo Port
Gas Project
Privatisation
Club participant
Club Participant
Lead Arranger
Financial adviser
and Underwriter of
and Underwriter of
and
And arranger to
ECA tranche
ECA tranche
Underwriter
MPDC
CMG
Motraco
Marromeu
Financial adviser to
ZAR 1.08bn
Financial adviser to
Lead Lender
CVRD on IBFS
Equity finance
Motraco
Moatize
And Development Plan
And
Arranger
Workshop on Large Project Finance – May 31 & June 1
7
Mozambique's Large Project Financings
Characteristics of the soon to be developed mineral and energy projects
Characteristics of Mozambique’s large Project Financings
8
Geographic
The remote nature of most of the projects brings its own challenges:
 Need developers who have significant appetite and balance sheets
 Mobilisation and demobilisation costs become relevant
 Lack of supporting infrastructure in the project/concession area
Inter modal and
nodal
considerations
Many of Mozambique's large projects form part of Corridor developments
 Energy projects: Generation linked to Transmission development
 Mineral projects: Route to port becomes an issues (Moatize, CSL,
Riversdale)
 A coordinated approach is critical
 Inter-ministerial considerations
Cross border nature
of projects
Increases the complexity of the projects
 International lawyers are necessary
 Dual currency considerations (Eskom now insisting on paying for power in
ZAR)
 Bankability
 NMPD and the inter governmental and utility issues
Characteristics of Mozambique’s large Project Financings
9
Mineral and energy
focus
Many of the projects are being developed in these sector areas
 Mineral developments are focussed on the Tete province
 Supporting infrastructure needs in the area are significant
 Resettlement and social upliftment in the region is a prerogative
Workshop on Large Project Finance – May 31 & June 1
10
Lessons that can be learnt from previous projects
Characteristics of the soon to be developed mineral and energy projects
Recommendations
11
Recommendation
1
2
3
4
Rationale
Appoint appropriate advisers

Financial

Technical

Environmental

Legal


The cost benefit of such an approach is tangible
Maputo Port took 5 years to close with a few hiccups along
the way
The same size does not fit all?

Project Financings are different in
each case

Transport concession
arrangements

PPP standard documentation is
unlikely to work

A bespoke solution is likely to be needed for each project
Creation of IAC is a good thing

Creation of a co-ordinating body
that oversees the development
from the governments perspective

IAC members must be empowered to make decisions on
behalf of the ministries/entities to which they report
Timetable

Create an investor friendly
environment

If a developer knows the government is committed to a
timetable then it will be more likely to come to Mozambique
Recommendations….(continued)
12
Recommendation
5
Strong Individuals?

Sometimes big egos get in the way
of good projects
Rationale


Doing business in Africa is not the same as for example
Europe or the US
A lot of patience is required
Workshop on Large Project Finance – May 31 & June 1
13
Thank You
Relevant contact persons at Standard Bank
14
Address
Corporate and Investment
Banking Division of Standard
Bank
Alastair Campbell
Greg Babaya
Director – Investment Banking
Energy Sector focus
Project Finance
Director – Investment Banking
Energy Sector focus
Project Finance
Contact:
Email:
Contact:
Email:
+27 11 636 6416
[email protected]
+27 11 636 7446
[email protected]
3 Simmonds Street
Standard Bank Centre
Johannesburg
2001
South Africa
Greg Ansermino
Jonathan Wood
Director – Investment Banking
Mineral sector focus
Director – Project Finance
Infrastructure sector focus
Contact:
Email:
Contact:
Email:
+27 11 636 1004
[email protected]
+27 11 636 0964
[email protected]