Johannes kinsky -erste_group

E R S T E G R O U P

4th VIENNA ECONOMIC FORUM5. -6. November 2007

Financing Solutions for Infrastructure FinancingJohannes Kinsky, Member of the board, Erste Group

E R S T E G R O U P

4th VEF - Vienna5. November 2007

Group Corporates & Investment BankingEB Group Financing Solutions2

Presentation topics

−Introduction

−Market/Potential

E R S T E G R O U P



Introduction –Is Erste Group a pure retail bank?

−From a first perspective most would agree,

however

−Currently the large corporate and international business accounts for about 19% of the group’s risk weighted assets

−Nevertheless large corporate and international business is already highly efficient and profitable

−Group Corporates & Investment Banking (GCIB) already makes a significant contribution to the group’s success−Result of successful expansion efforts shows that we can do it (e.g. real estate, ECM & DCM in Austria, M&A in Czech Republic, structured finance)

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Presentation topics

−Introduction

−Market/Potential

E R S T E G R O U P



Market/PotentialFocus on Infrastructure Finance

−European Action of Growth identified 30 priority ten t projects amounting to an estimated

EUR 225 billion

of total investment cost

−European Council agreed for the period 2007 – 2013 on

Cohesion for growth and employment EURO 347 Billion

45,487 46,889 48,427 49,393 50,626 52,4 54,188

0

10

20

30

40

50

60

2007 2008 2009 2010 2011 2012 2013

Cohesion Policy Annual EU funding (2007 – 2013)

in Billion EURO

Source: EU

A98buic

Priority axes and projects (TEN-T)Rail:No 1 Berlin-Verona-Naples-Palermo (Brenner-Base Tunnel)No 7 Lyon-Trieste-Koper-Budapest-Ukrainian borderNo 22 Athens-Sofia-Budapest-Venna-Prague-Nurember/DresdenNo 29 Railway axis of the Ionian/Adreatic intermodal corridorWater:No 18 Rhine/Main-Danube inland waterway axisNo 21 Motorways of the Sea i.E. Adriatic Sea Mediterranean Sea -Atlantic/Black SeaRoad:Igoumenitsa/Patras-Athens-Sofia-BudapestJASPER – Joint Assistance in Supporting Projects in European RegionsManaged by EIB (parts of CEE and SEE will be covered by the Vienna office)JEREMIE – Joint European REsources for MIcro to medium EnterprisesManaged by European Investment Fund

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0

0,4

0,8

1,2

1,62

2,4

2,8

3,2

3,6

4

4,4

2007 2008 2009 2010 2011 2012 2013

Czech Rep.

Hungary

Slovenija

Slovakia

Romania

Bulgaria

Greece

Annual EU Cohesion policy funding in selected markets (2007 – 2013) in Billion EURO

Source: EU

European Council agreed funds with an volume of EURO 347 Billion for the period 2007 – 2013 on Cohesion for growth and employment

A98buic

Programmes Details:Bulgaria€ 6,853 bnCzech Republic€ 26,692 bnGreece€ 20,420 bnHungary€ 25,307 bnRomania€ 19,668 bnSlovenja€ 4,205 bnSlovenska€ 11,588 bnAustria€ 1,461 bnPolska€ 67,284 bn

E R S T E G R O U P




Railway km per 100.000 inhabitants in relation to GDP per capita

0

20

40

60

80

100

120

0 10.000 20.000 30.000 40.000 50.000

GDP in US$ per capita

Km

rai

lway

per

100

.000

in

hab

itan

ts

UA

RS

RO CR

SK

HU AT

CZ

Potential for upgrading the

network

and new HSL lines

Source: ERSTE Research and National railway companies

The size of the bubbles are determined by each country‘s GDP

A98buic

Amounts already identified for EU funding over the period 2007-2013Investments in rail excluding urban transportBulgaria€ 0,5 bnCzech Rep.€ 2,5 bnGreece€ 0,8 bnHungary€ 1,7 bnSlovenija€ 0,5 bnSlovenska Rep.€ 1,2 bn

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Km roads per 100.000 inhabitants in relation to GDP per capita

0

1.000

2.000

3.000

0 10.000 20.000 30.000 40.000 50.000


Km

of p

aved

roa

ds p

er

100.

000

inha

bita

nts

UA

RS

RO

SK HU

AT

CZ

CR

Source: ERSTE Research and Transportation ministries

Potential for upgrading

and extension of the network

A98buic

Amounts already identified for EU funding over the period 2007-2013Investments in roads including national/regional roadsBulgaria€ 1,1 bnCzech Rep.€ 3,8 bnGreece€ 3,6 bnHungary€ 3,4 bnSlovenija€ 0,4 bnSlovenska Rep.€ 2,0 bnEfforts to extend the networkRomania in operation 298 kmby 2009 444 kmby 2013 1944 kmHungaryin operation 650 kmby 2010 925 km

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Source: EU Research and

World health organization

Public hospital beds in relation to GDP per capita

0

200

400

600

800

1.000

1.200

0 10.000 20.000 30.000 40.000 50.000


ho

spit

al b

eds

per

100

.000

in

hab

itan

ts

UA

RS*

RO

CR

SK

HUAT

CZ

*There is no data available on health expenditure in Serbia.

Potential to improve

medical care (acute centers,new

hospitals, retire

ment facilitie

s)

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−Funding requirements needs additional funding sources−JASPER−JEREMIE−European Investment Bank (EIB)−European Bank for Reconstruction and Development (EBRD)−European Investment Fund (EIF)−IFC

−Innovative financing mechanisms −Grant Programmes−Special-purpose funds−Commercial funding agencies −Public – Private - Partnership−Penion funds and other large institutions−Diversify and expand traditional revenue-raising sources

A98buic

JASPER – Joint Assistance in Supporting Projects in European RegionsManaged by EIB (parts of CEE and SEE will be covered by the Vienna office)JEREMIE – Joint European REsources for MIcro to medium EnterprisesManaged by European Investment Fund Grant Programmes - the mainstay of the public sector, usually of medium-term duration (up to five years) and subject to annual political appropriations control and review.Innovative financing mechanisms – i. E. Special-purpose funds - involving dedicated user-pay revenue sources that provide multi-year funding stability and usually imply an indefinite, ongoing commitment – although these involve traditional (bureaucratic/political) governance.Commercial funding agencies - involving some form of privatisation/commercialisation of the infrastructure and/or the establishment of a quasi-public agency to provide infrastructure funding on a (generally) commercial, self-financing basis (e.g. through repayable loans, revolving fund, user-pay), or long-term public revenue commitment.Encourage Public-private partnership Make greater us of user charges for funding infrastructure

E R S T E G R O U P




−Liaison with multinational financing agencies (EIB, EBRD, IFC)

and EU-entities i.E.−European Comission−DG Engergy and Transport (DG TREN)−DG Market (Tenders)−DG Regio −European Agency for Reconstruction

to increase infrastructure finance activities−Support for applications of EU funds (European Regional Development

Fund, Cohesion Fund…….)−Assistance in preparation of bankable project−PPP advisory

E R S T E G R O U P



Thank you very much for your attention

Johannes kinsky -erste_group

Economy & Finance

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