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Lessons Learned in South Africa
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Transcript of Lessons Learned in South Africa
Strictly Private and Confidential
Maputo, 31 May & 1 June 2007
Workshop on Large Project Finance
Alastair Campbell
Director – Project Finance
Standard Bank – Corporate & Investment Banking Division
2
Table of contents
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
3
Workshop on Large Project Finance – May 31 & June 1
The Standard Bank GroupAn overview of the banks global presence
4
The Standard Bank Group
Standard Bank Around the Globe
Corporate and Investment Banking Division of Standard Bank
The Bank
Standard Bank has operations throughout the world, operating in 38
countries outside of South Africa.
Rooted in Africa, with strategic representation in key sub-Saharan markets, Standard Bank is a regional banking force with a global sweep.
• 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
Interesting Facts
Market capitalisation as at December 2006: R113 billion
Standard
Bank Group
Retail banking
Internationa
l
Stanbic Africa
Liberty
GroupSTANLIB
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
Value-added financial and non-banking services both locally and internationally
Management of institutional and retail funds, investment portfolio’s and financial product development
Corporate and Investment
Banking
Commercial and investment banking services to larger corporates in South Africa, foreign banks and international counterparts.
Property-related finance and advisory services and management of industrial, office, retail, specialised property and wholesale residential development
5
Workshop on Large Project Finance – May 31 & June 1
Projects on which this presentation has been basedTombstones
6
Tombstones of projects on which this presentation has been based
Mozal I
Club participant
and Underwriter of
ECA tranche
Mozal II
Club Participant
and Underwriter of
ECA tranche
Sasol Natural
Gas Project
Lead Arranger
and
Underwriter
Maputo Port
Privatisation
Financial adviser
And arranger to
MPDC
Moatize
Financial adviser to
CVRD on IBFS
And Development Plan
CMG
ZAR 1.08bn
Equity finance
Motraco
Financial adviser to
Motraco
Marromeu
Lead Lender
And
Arranger
7
Workshop on Large Project Finance – May 31 & June 1
Mozambique's Large Project FinancingsCharacteristics of the soon to be developed mineral and energy projects
8
Characteristics of Mozambique’s large Project Financings
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
Inter modal and nodal considerations
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
Cross border nature of projects
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
Geographic
9
Characteristics of Mozambique’s large Project Financings
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
Mineral and energy focus
10
Workshop on Large Project Finance – May 31 & June 1
Lessons that can be learnt from previous projectsCharacteristics of the soon to be developed mineral and energy projects
11
Recommendations
1 The cost benefit of such an approach is tangible Maputo Port took 5 years to close with a few hiccups along
the way
Appoint appropriate advisers Financial Technical Environmental Legal
Recommendation Rationale
2 A bespoke solution is likely to be needed for each projectThe same size does not fit all?
Project Financings are different in each case Transport concession arrangements PPP standard documentation is unlikely to work
3 IAC members must be empowered to make decisions on
behalf of the ministries/entities to which they report Creation of IAC is a good thing Creation of a co-ordinating body that
oversees the development from the governments perspective
4 If a developer knows the government is committed to a
timetable then it will be more likely to come to MozambiqueTimetable Create an investor friendly
environment
12
Recommendations….(continued)
5 Doing business in Africa is not the same as for example
Europe or the US A lot of patience is required
Strong Individuals? Sometimes big egos get in the way
of good projects
Recommendation Rationale
13
Workshop on Large Project Finance – May 31 & June 1
Thank You
14
Relevant contact persons at Standard Bank
Alastair CampbellDirector – Investment BankingEnergy Sector focusProject Finance
Contact: +27 11 636 6416Email: [email protected]
Greg AnserminoDirector – Investment BankingMineral sector focus
Contact: +27 11 636 1004Email: [email protected]
Greg BabayaDirector – Investment BankingEnergy Sector focusProject Finance
Contact: +27 11 636 7446Email: [email protected]
Jonathan Wood Director – Project Finance Infrastructure sector focus
Contact: +27 11 636 0964Email: [email protected]
Corporate and Investment Banking Division of Standard Bank
3 Simmonds Street Standard Bank CentreJohannesburg 2001South Africa
Address