Managing Risks & Facilitating Private Investments … Risks & Facilitating Private Investments in...

Anil Chandramani

Chief Investment Officer and Global

Relationship Executive, Chemicals & Fertilizers

1

Managing Risks & Facilitating Private

Investments in the

Chemicals & Petrochemicals Industry

In Egypt & MENA

Egypt Downstream Summit

Cairo, February 15-16, 2016

The World Bank Group and IFC

IBRDInternational Bank for Reconstruction and Development

IDAInternational Development Association

IFCInternational Finance Corporation

MIGAMultilateral Investment and

Guarantee Agency

To promote institutional,

legal and regulatory

reform

Governments of poorest

countries with per capita

income of less than

$1,025

- Technical assistance

- Interest Free Loans

- Policy Advice

To promote private

sector development

Private companies in

member countries

- Equity/Quasi-Equity

- Long-term Loans

- Short-term Finance

- Risk Management

- Advisory Services

To reduce political

investment risk

Foreign investors in

member countries

- Political Risk Insurance

Est. 1945 Est. 1960Est. 1956 Est. 1988

Role:

Clients:

Products:

To promote institutional,

legal and regulatory

reform

Governments of member

countries with per capita

income between $1,025

and $6,055

- Technical assistance

- Loans

- Policy Advice

Private Sector Support Public Sector Support

2

The Mission of IFC is to promote private sector investment in developing countries to reduce poverty and improve people's lives

Holding $50Bn Portfolio

IFC in FY15

S&P, Moody’s AAA

Committed 2014 $17.7 billion- Syndicated $7.1 billion- Own Account $10.5 billion

# of projects 406# of countries 83

Committed Portfolio (IFC balance) by region

Committed Portfolio (IFC balance) by sector

* Manufacturing includes the following subsectors: Chemicals/Petrochemicals, Construction Materials and Energy Efficient Machinery

� Largest multilateral source of loan and equity financing for the private sector in emerging markets

� Takes market risk with no sovereign guarantees

� Promoter of environmental, social, and corporate governance standards

� Resources and know-how of a global development bank + flexibility of a merchant bank

� Portfolio of over 2,000 companies worldwide

� Holds equity and quasi-equity in over 800 companies worldwide: Honest Broker Role

� Loans may be foreign currency or, in several countries, may be in local currency

Manufacturing,

Agribusiness

and Services

29%

Financial

Markets

43%

Infrastructure

and Natural

Resources

28%

3

Latin America and the

Caribbean22%

Europe and Central Asia

18%

Sub-Saharan Africa17%

East Asia and the Pacific

17%

South Asia12%

Middle East and North

Africa12%

RoW2%

�> US$7 billions invested (own

account)

�> 300 projects

�> 50 countries

Chemicals, Petrochemicals & Fertilizers Sector

Key Features

(historical)

Key Features

(historical)

Committed Amount by Sector

� In-house industry specialists with global experience in

the sector and benchmarking capabilities

� Strong regional knowledge with exclusive focus on

emerging markets

� Climate change strategy

� Promotion of sustainable economic growth and

competitiveness with creation of direct and indirect

jobs, know-how transfer

Committed Amount by Region

4

Engro Corporate, PakistanICS, Senegal: phosphoric acidIndo Jordan, Jordan: phosphoric acidEngro Chemicals, Pakistan: ammoniaTrigen II, Trinidad & Tobago: ammoniaFosfertil, Brazil: SSP, TSP, MSP, DAPGNFC, India: ammonia, ureaDeepak Nitrate, India: ammonia,Urea,DAPPQB, Bolivia: ammonium nitrateKuAz, Russia: ammonia, ureaIndo Egyptian, Egypt: phosphoric acidKoyo, China: ammonia, ureaAbocol, Colombia: ammonium nitrate,NPKJIFCO, Jordan: DAPJPMC, Jordan: phosphateEngro Emergency, Pakistan: ureaOCI Egypt: Corporate loan for fertilizersParadeep Phosphates, India: DAPItafos Brazil: PhosRock & Acid

A Sample of IFC’s Industry Experience

ERC Refinery, EgyptPSPC (Shell), PhilippinesStar Petroleum (Caltex), ThailandRefisan (Pecom), ArgentinaPetrotel-Lukoil, RomaniaAlliance Oil Company, Russia

Refineries

Petrochemicals

Continental Carbon of India Ltd.NPC, Thailand: gas crackerCopesul, Brazil: naptha crackerCopene, Brazil: naptha crackerSamsung, Korea: petrochem/aromatics

complex restructuringHMC Polymers, Thailand: PPPetroken, Argentina: PPPoliteno, Brazil: PEIpiranga I & II, Brazil: PE, PP Indelpro, MexicoProfalca, Venezuela: PPGrupo Zuliano, Venezuela: petrochem complexSuzhou, China: PVCVinythai, Thailand: PVCEngro PVC, Pakistan: PVCTuntex, Thailand: PTARhodiaco, Brazil: PTARhodia-ster, Brazil: PTA/PETOxiteno, Brazil: EO/MEG Girsa, Mexico: EO/MEGPralca, Venezuela: MEGGidesa, México: EG, PSTrikem, Brazil: PSInnova, Brazil: styrene/PSDaaboul, Syria: LABJose Methanol, Venezuela: methanolKuAz, Russia: caprolactamEleme Petrochemicals, Nigeria: PE, PPXinao, China: Coal-to-DMEDCM Shiram, India: PVCHimadri, India: Carbon Pitch, carbon blackGalaxy Chemicals, India: SurfactantsEIPET, Egypt: PET

Others/InfrastructureFertilizers

Inorganic Chemicals

Engro Polymers, PakistanKanoria Vizag, IndiaAtul Ltd, IndiaAlexandria Carbon Black, Egypt: Carbon blackContinental Carbon (CCIL), India: Carbon BlackMaanshan I & II, China: Carbon blackRain Calcining, India: calcined carbonPeroxythai, Thailand: hydrogen peroxideChengdu, China: potassium hydroxide & PVCProdesal, Colombia: caustic soda, chlorineMeghmani Finechem, India: ChlorAlkaliMagadi Soda, Kenya: soda ashLukovac Soda, Bosnia: soda ashKanoria Chemicals, India: ChlorAlkaliJiuda Salt, China: industrial salt

JPMC Terminal, JordanIFC / SCB FacilityEngro Vopak, Pakistan: Chemical terminalMesser, Trinidad & Tobago: industrial gasesOpet Petrolculuk, Turkey: fuel distributionAntai, China: metallurgical cokeEcogreen I & II, Indonesia: oleochemicalsDarong, China: specialty chemicalsUPL, India: pesticides, herbicidesGapco, Kenya: storage terminalZhong Chen, China: storage terminalGalnaftogaz, Ukraine: petroleum retailerDongyue, China: fluorine chemicals,

organicsiliconeAtul, India: Dye and pesticide intermediatesHikal, India: PharmaceuticalsVinati Organics (JV), India: specialty chemicals

5

All Economics Is Driven By Politics……

IFC Chemicals 6

?

Political Risk: Far Away Issues Also Impact Us

Where is France Going?

?

What about

the Migrants

Crisis

US: Playing Political Games – With No Rules

Presentation Title 7

The New Normal : Shut the government down and flirt with debt default every 3 months?

Prospect Prospect Prospect Prospect of of of of prolonged and prolonged and prolonged and prolonged and

frequent frequent frequent frequent fights fights fights fights on on on on

Capitol Hill Capitol Hill Capitol Hill Capitol Hill

The next politicoThe next politicoThe next politicoThe next politico----economic crisis is just a few weeks away !! economic crisis is just a few weeks away !! economic crisis is just a few weeks away !! economic crisis is just a few weeks away !!

China: Yuan versus Dollar

IFC Chemicals 8

Source: IMF, SEI

Chin

a:

Avera

ge B

ase

Meta

ls

Consu

mpti

on a

nd G

DP p

er

Capit

a

The Asian Giants: China and Japan

BOJs twin aims— generating inflation and bringing down yields—

may be somewhat contradictory

Bank of Japan

Due to economical & political instability

Volatility has been Increasing

IFC Chemicals 9

Source: IMF

Chinese Stock Market 2014-15

Emerging Markets are driving global growth. All Companies are increasingly focusing on EM.

10

-1

0

1

2

3

4

5

6

Historical and Forecast GDP Growth

Source: IMF

-6

-4

-2

0

2

4

6

8

10

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

World

Advanced economies

Emerging and developing economies

Economic Insights: We know Emerging Markets

As a member of the World Bank Group, IFC has unparalleled insights into Emerging Markets.

MIGA: Multilateral Investment Guarantee Agency

�Umbrella of deterrence

� MIGA’s Shareholders are the same as the Host Countries of investments

� Only a small proportion of MIGA-supported projects encounter difficulties

�MIGA guarantees provide downside protection on long-

term investments

� Equity covered up to 90%; Debt covered up to 95%

� Tenor covered up to 15-20 years

11

•Political (Country) Risk Insurance

Currency

Transfer

Restriction and

Inconvertibility

Expropriation War and Civil

Disturbance

Breach of

Contract

Coverage

•Guarantee holder can pick any combinations of coverage

Non Honoring of

Sovereign

Obligations

�Facilitation of settlement of disputes

•Host Country is motivated to find a solution

•Project sponsors and financiers have a vested interest in continued success of project

•5 claims paid out of 980 guarantees for total of 616 projects since 1990

MIGA’s Risk Mitigation Solutions

12

Phosphatic Fertilizers : An example

Source: Fertilizer International, Deutsche Bank

Volume growth is volatile and pricing is often lagged to volumes

Cyclicality: we have to live with it

Counter-Cyclical Role: AAA-rated

•IFC has committed over $6.0 billion of local currency loans in a variety of currencies since 1999

•(31 currencies currently available)

13For more information see Annex 3

Local and Foreign Currency capabilities

14

Priorities Innovation hot spotsIFC Cleantech Clients

Clean energy & access

1▪ Solar

Industrial efficiency

3

Sustainable urbanization

2

Agriculture, water, and

forestry

4

▪ Water

▪ Energy storage

▪ Biomass

▪ Green Buildings

▪ Water

▪ Energy storage

▪ Energy efficiency

▪ Waste

▪ Biomass


▪ Biomass


IFC holds an annual Cleantech Workshop which is attended by 150 investors, companies, and IFC

staff to exchange ideas on innovation

IFC has also committed US$254 million in

12 climate funds

IFC has also committed US$254 million in

12 climate funds

IFC is pushing innovation via its new direct venture/growth capital investment program (US$136 million committed since 2009)

Strong Equity Track-Record: Different from PE

15

0

50

100

150

200

250

300

350

400

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010North America Latin America

Western Europe Central and Eastern Europe

Africa and Middle East Asia Pacific

Historical Global Chemical Capital Spending

(billions of dollars)

2010 Global Chemical Capital Spending and

as % of regional shipments

(billions of dollars)

� Fertilizer Plant (Amonia, Urea) costs $1-2bn

� A new Refinery costs $5-8bn, while a Polyethylene Plant

costs $2-4bn

� 2010 Capex was around $247bn in 2010

-20%

-10%

0%

10%

20%

30%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Growth Global Capital Spending Growth Global Shipments

0

50

100

150

200

250

300

350

400

Central and

Eastern

Europe

Latin America Africa and

Middle East

North

America

Western

Europe

Asia Pacific

19%

5%4%13%4%7%

Capital Spending vs. Shipments Growth

(%)

Include Pharmaceuticals

The Chemicals Industry is Capital Intensive

Long term player – On both debt and equity sides

• IFC would enter into Risk Sharing Agreements (“RSAs”) with one local banks in each

country, selected jointly by Client Company and IFC. Under each RSA, IFC would

share losses with the Bank on its portfolio of financings to Client’s distributors

and/or farmers in that emerging market, typically on a pro-rata and pari-passu basis.

• Under a separate Framework Agreement between Client and IFC, Client would

provide a pooled first loss cover and reimburse IFC for its payments under the RSAs,

up to a maximum cap to be agreed between them(“First Loss Amount”).

• Structures of individual RSAs can vary, depending on each banks’ requirements and

each target portfolio.16

Short Term Finance: Crisis Mitigation

Bank 2

Country 2IFCIFC Client

Company

FarmerFarmerFarmerFarmerFarmerFarmer

FarmerFarmerFarmerFarmerFarmerFarmer

DistributorDistributorDistributorDistributorDistributorDistributor

Bank 1

Country 1

Bank 3

Country 3

Global

Framework

Agreement

RSA

RSA

RSA

Risk Sharing Facilities

17

B-Loans & Parallel Loans

•A loan is for IFC’s own account

•B loan is for account of participant commercial banks

•Only one loan agreement, signed by the borrower and IFC

•IFC is the lender of record for the entire loan (A+B)

•IFC Loans exempt from withholding tax

Participants

IFCBorrower

Loan Agreement

A + B Loans

B LoanParticipation

Agreement

1. Calyon

2. Cordiant Capital

3. Citigroup

4. ING Bank

5. ABN AMRO

6. BayernLB

7. Societe Generale

8. HSBC

9. Natixis

10. KBC Finance Ireland

Top 10 IFC B-Loan Participants

IFC Mobilizes Others: Lenders & Equity Investors (AMC)

•Established in 2009 to manage third party capital in a private fund structure. •$8.1b •Assets under management

•27 •High Caliber

Investors

•$4.6b •Investment

Commitments by Funds

•8•Funds

•75• Staff

•65•Portfolio

Investments

• A wholly owned subsidiary of IFC

• IFC is an anchor investor in AMC funds,

• IFC also invests directly in underlying deals, and

• AMC funds invest in IFC’s proprietary transactions.

• AMC provides investors with a unique platform to invest in IFC’s proprietary transactions in emerging markets.

• AMC’s investors benefit from exclusive access to IFC’s

• Emerging markets deal origination capability and pipeline,

• On the ground footprint,

• Investment resources,

• Proven risk management.

• Different funds raised to focus on specific regions and sectors.

• Separate subsidiary for independent decision-making process.

•AMC Family of Funds: World Class Investments for World Class Investors

IFC Global Capitalization

Fund

Africa Capitalization

Fund

IFC Russian Bank

Capitalization Fund

IFC Global Infrastructur

e Fund

IFC African, Latin

American and Caribbean

Fund

IFC Catalyst Fund

Financial Markets$3bn

Financial Markets$182mn

Financial Markets$550mn

Infrastructure$1.2bn

Multi-region, Multi-sector

$1bn

Resource Efficiency$418mn

Selected AMC

Investors

IFC’S CHINA-MEXICO FUND & ASSET MANAGEMENT CO, LLC

•31

19

In-house Technical and Market Expertise

The Global Economy is Highly Volatile

The Global Crises shook us

out of complacency.

The world continues to change dramatically.

It is Very Important to Understand and Manage Risks

Let your risk capabilities drive your strategy.

IFC’s mandate is to Builds Partnerships

to Share Its Expertise to Supplement

Risk Management Capabilities of Companies,

so they can Enhance Competitiveness

and Build Leadership positions. 20

21

IFC Value Add: Tailored To Each Customer

� Equity

� Fixed/Floating Rates, Local Currencies

� Up to 15 year Loan Maturity

� Flexible Amortization Profile

� Catalyst for other Investors and Lenders

� Equity Participation

� Capital Mobilization

� 50 Years of Sector Expertise

� Greenfield

� Expansion/Modernization

� Corporate Strategy

� Access to International Investors

� Technical Advice

� Advice on Environmental and Social Best Practices

� Equator Principles Modeled after IFC Standards

� Local Consultation and Disclosure

� Local Supplier Development

� Environmental/ Social Advice

� Corporate Governance

� Local Economic Development

� HIV/AIDS Prevention

� Community Development Funding

Sustainability Toolkit

Environmental & Social Risk Management

GlobalChemicalsExpertise

Long-term Competitive Financing

21

� Government Relations: 184 Finance Ministries form IFC’s BoD

� Neutral broker Role

� Reduced Risk of Expropriation, Breach of Contract, Convertibility

� World Bank Synergies

� Withholding Tax Benefit

� Partnership with MIGA

Country Risk Mitigation

� Extensive Local Office Network

� Local Transaction Experience

� World Bank Synergies

Regional Knowledge

In Summary

22

An Integrated Approach to Risk Management

Mobilization incl. Cooperation

Agreement with Multilaterals

Sustainability Services

& Support

Short Term Customer

Financing and Supplier Financing

Both Equity and Debt Financing. Long Term

Risk Management / Political risk Mitigation

World Bank Synergies / Economic Analysis

Global IndustryExpertise

IFC’s Value Proposition: How IFC can help you

23

How We Finance Projects

•Umbrella for participants in IFC’s syndication program: IFC lender of

record, immunity from taxation and provisioning requirements.

•IFC’s total financing must be less than 25% of total company

capitalization, and IFC does not manage or own largest stake.

Project Type IFC Investment

Greenfield, total cost

less than $50 million

Greenfield, total cost

more than $50 million

Expansion or rehabilitation

Greenfield, expansion,

rehabilitation

Up to 35% of project cost

for IFC’s account


for IFC’s account


for IFC’s account

100% project cost for IFC

and participating banks’

accounts

24

IFC’s Works With A Broad Array Of Products and ServicesSeniorDebt

Global TradeFinance Program

StructuredFinance

MezzanineFinance

PrivateEquity

• On-lending

• Liquidity management

• Acquisition financing

• Warehousing facilities

• Syndicated loans

• Partial credit guarantees

• Securitization

• Bond underwriting

• Credit Enhancement

• Convertible debt

• Subordinated debt

• Other Tier II instruments

• Common shares

• Preferred shares

• $1 billion program

• Guarantees to issuing banks

• 46 issuing banks in 24 countries

• 92 confirming banks in 62 countries

• $579 million of issued guarantees in first 12 months

AdvisoryServices

• Corporate governance

• Risk management

• Small and medium business banking

• Housing finance

• Energy efficiency finance

• Privatization

SustainableFinance

• Carbon finance

• Renewable energy

• Supply chain financing

• Corporate governance financing

25

Approaching IFC

• Foreign or Domestic Sponsors

� New venture or expansion; private sector majority ownership only

� Project must be developmentally sound and commercially viable

• Sponsor Commitment is Required

� Equity participation; pre-completion support/guarantees

• Submit Preliminary Business Plan or Feasibility Study

� Brief project description, incl. technical feasibility and market study

� Information on sponsors and operator

� Environmental studies

� Information on requirements, financing plan and cash flow projections

26

IFC’s Project Cycle

Early Review

• Client needs determined

• Contribution of project to development assessed

• Project screened for potential risks & issues

• Site visit

• Mandate letter

Due Diligence Negotiation DisclosureInternal

Approvals and Commitment

Disbursement

• Assessment of business potential, risks, opportunities

• Financial and economic Evaluation

• Compliance with IFC’s social and environmental performance standards reviewed

• Terms and conditions of the IFC investment

• Action plan agreed

• Environmental and social information disclosed

• Opportunity for public comment

• Board consideration

• Board approval

• Legal review

• Signing of legal documents

• Fulfillment of conditions of disbursement

• IFC funds disbursed

We Agree on a Specific Timeline to Meet Client’s Needs

ANNEX

Select IFC Investments in the Industry

Presentation Title 27

Egypt: Egyptian Refining Company

28

Sponsors

Location of project

Board Approval Date:

IFC Investment: $100 million equity investment in Orient, the Company’s main shareholder.

The Company is a greenfield Egyptian company incorporated in 2007. It is owned82% by Orient Investment Properties Limited (“Orient”), 15% by EGPC and 3% byother investors. The Project’s main sponsor is Citadel Capital S.A.E., a leadingCairo-based private equity firm founded in 2004

The Project is to be located on the outskirts of Cairo, on the Ismailia canal in theMostorod District, adjacent to the existing CORC refinery. The site is in a highlypopulated urban area, but the Project will be located within the walls of anexisting petroleum complex. The processing facilities will occupy approximately323,000 square meters to the South of the CORC refinery

Project Description: The Project involved the construction and operation of a 91,000 barrels per day oil conversion complex to process crude distillation bottoms.

May, 2010

Project Cost US$3.6 billion

: EPC under construction.

24

JIFCO, Jordan

29

IFC Investment: US$ 125 million A Loan

Sponsors

IFFCO, the largest producer of fertilizers in India. IFFCO owns and operates five fertilizer plantsin India with a combined annual capacity of 8.58 million tons of fertilizers, including over 4 milliontons of phosphatic fertilizers.JPMC is a Jordan based company listed on the Amman Stock Exchange. JPMC operates threemines, producing phosphate rock and downstream fertilizers, and a chemicals plant at Aqaba,Jordan producing phosphoric acid, DAP, sulfuric acid and aluminum fluoride.

Location of project

The chemical complex and associated infrastructure and utilities will be located adjacent to theexisting JPMC mining facility in Eshidiya, Ma’an, approximately 250 km south of Amman, and120 km north east of Aqaba Port, from which phosphoric acid will be exported.

Project Description:

The project envisages the construction and operation of a 475,500 metric tons P2O5 per annum phosphoric acid plant in Jordan. The bulk of the phosphoric acid will be exported to India to be used as feedstock for IFFCO’s Kandla fertilizer plant in Gujarat state. The Project will include a greenfield phosphoric acid manufacturing complex in Eshidiya and a storage tank farm in Aqaba to facilitate export of phosphoric acid via Aqaba port.

Commitment Date: May, 2011

Project Cost US$ 680 million

Corporate Project – Orascom, Egypt & Netherlands

30

Sponsors

Nameplate Capacity

Location of project and

description of site

Investment Date:

EFC manufactures granulated Urea with a total production capacity of 1.3mm tpa

IFC Investment: US$50 million equity & US$200 million debt

Orascom and its wholly owned subsidiary, the Egyptian Fertilizer Company (“EFC”), is one ofthe largest fertilizers and construction groups in the Middle East and Africa region and is presentin over 25 countries across the world.

OCI is headquartered in Cairo, Egypt. EFC is located in the Suez Industrial DevelopmentCompany, in Ain Sokhna, Suez Governorate on the Red Sea in Egypt. The Group includesfertilizers distribution channels in Western Europe, Dubai, Brazil and the United States.

Project Description: IFC provided a US$50 million equity investment and US$200 million debt financing to support the Group’s long term investment needs and replacing existing shorter term debt financing, previously raised in to partially fund the acquisition costs related to the Group’s fertilizers assets.

January 13, 2012

Project Finance PT Panca Amara Utama, Indonesia

31

IFC Investment: A Loan of US$130 million.

Sponsors

The Project Sponsor is PT Surya Esa Perkasa Tbk. (“SEP”), a company that is listed on theIndonesian stock exchange. Mr. Theodore Rachmat, Mr. Garibaldi Thohir and Mr. Vinod Laroya(through their shareholding in SEP) and SEP are the key Sponsors of this Project.

Location of projectThe Project is located Central Sulawesi Province. The plant’s site is approximately 40 km awayfrom the nearest airport which is at Luwuk – the Capital of Banggai Regency.


PT Panca Amara Utama (“PAU”) is a private limited company that has set up a 2,000 metric tonnes per day greenfield ammonia production plant. The gas will be sourced from the Senoro-Toili gas fields in Central Sulawesi province of Indonesia. Key associated infrastructure for this project includes a pipeline to transport the gas to the plant and a jetty to supply the ammonia to buyers

Commitment Date: May, 2013

Project Cost

The Project cost is US$750 million and has been financed by US$500 million of senior debt and US$250 million of equity. IFC has invested US$125 million in the form of debt and equity, to finance part of the Project. In addition to the above investment, IFC has mobilized US$400 million of senior debt from other banks.

IFC Project – OPET Petrolculuk, Turkey

32

IFC Investment: US$ 25 million A Loan and US$ 50 million B Loan

Sponsors

Opet Petrolcülük A.S. is a retail distributor of petroleum products in Turkey, owned 50% by theKoç Group of Turkey and 50% by Opet’s founding shareholders, the Ozturk family. The project isaimed at strengthening the company’s position in the Turkish petroleum products distributionindustry and enhancing its competitiveness in advance of further liberalization.

Location of projectThe marine terminal and storage facilities are located north of the Marmara Sea in Thrace


The project is comprised of : (i) the construction of a greenfield marine terminal and tank storage facility which will increase the company’s oil products storage capacity from 320,000 m3 to 766,000 m3; and, (ii) expansion of the company’s existing retail distribution network, with new stations primarily located in the larger cities of Turkey.

Commitment Date: April, 2004


Petrotel-Lukoil (Romania)

33

IFC Investment: US$ 35 million A Loan and US$ 50 million B Loan

SponsorsThe project sponsor and guarantor is OAO Lukoil, Russia’s largest integrated oil company.Lukoil's shares are publicly traded on the Russian stock exchanges

Location of projectThe Petrotel refinery is located in Ploesti, a city with 300,000 inhabitants in central Romania. Thecity is dominated by the Romanian oil industry, there are 4 refineries in the immediate area.Lukoil has 300 gas stations and 8 storage tank farms across the country.


The project involves the modernization and revamping program of S.C. Petrotel-Lukoil S.A., its Romanian refinery. The project is aimed at: (i) providing high quality petroleum products to Romanian consumers that comply with European Euro-3 and Euro-4 standards, (ii) improving refinery operations by increasing the output of higher value petroleum products and (iii) reduce emissions and energy consumption

Commitment Date: October, 2005


Corporate Finance: Mapei, Italy

34

IFC Investment: Euro 50 million A Loan

Sponsors

Mapei is a private company owned largely by the Squinzi family. The Mapei producers anddevelops adhesives, sealants, waterproofing agents, concrete additives and other specialtychemicals for the construction industry

Location of projectTurkey, Mexico, Egypt, Panama, India, Russian Federation and other emerging countries


The proposed investment consists of an IFC senior loan to Mapei SpA to finance its capital investment program in emerging markets, including facilities in Turkey, Mexico, Egypt, Panama, India, Russian Federation and other emerging countries.

Commitment Date: May 2014

Project Cost Euro 63 million

Equity Investment: Soda Sanayii, Turkey

35

Sponsors

Location of project

Commitment Date:

IFC Investment:US$ 25m

The project is sponsored by Turkiye Sise ve Cam Fabrikalari A.S. (or ‘Sisecam’) and itssubsidiaries, Anadolu Cam in glass packaging and Trakya Cam in float glass, all of which arelisted on the Istanbul Stock Exchange (BIST). Sisecam is a leading Turkish producer of flatglass, tableware, glass containers, glass fibers and associated products worldwide. 89.7% ofSoda’s shares are directly owned by Sisecam group companies and the remaining portion of theshares are listed on BIST

Turkey


Sisecam has invited IFC to become a shareholder in Soda, as part of the Group’s program of eliminating cross-ownership in the Group. The project entails an IFC equity investment in Soda, a Turkey synthetic soda and chromium producer. IFC will buy shares from two subsidiaries of the Sisecam group, which in turn are expected to use the proceeds in energy efficiency investments.

Project CostIFC’s proposed secondary purchase of US$25 million worth of Soda shares corresponds to less than a 5% shareholding in the company.

November 2014

Finding Solutions for farmers: Bayer, Ukraine

36

Sponsor

Location of project

Commitment Date:

IFC Investment:$87.5 million risk sharing facility

Bayer AG is Germany-based pharmaceuticals, polymers and agrochemicals conglomerate withsales of about €40 billion and EBITDA of about €8.3 billion in 2012. The group’s structureconsists of three divisions: Bayer Healthcare, Bayer CropScience and Bayer MateriaScience.Bayer CropScience manufactures herbicides, insecticides, fungicides, seed treatment and seeds.

Bayer Ltd. covers the entire territory of Ukraine via the chain of local distributors.


Risk sharing facilities with Raiffeisen Bank Aval and Credit Agricole Bank of up to US$87.5 million on the portfolio of receivables generated by Bayer Ltd. Ukraine on the sales of crop-protection products to private sector farmers in Ukraine. The RSF covers a portfolio of seasonal receivables (with maturities less than 1 year) with a total portfolio amount of up to US$175 million equivalent in local currency.

April, 2011; March, 2012

Eleme Fertilizer- An Asian Investor in Nigeria

37

Sponsor

Location of project

Commitment Date:

IFC Investment:The total project cost : over US$1.2 billion. IFC investment is up to US$150 million in long-termproject loans and up to an additional US$200 million in parallel loans/syndication

The project sponsor is Indorama Corporation, an Indonesia based multinational

The project is located in Port Harcourt, the capital city of Rivers State, Nigeria


The project involves construction and operation of a 1.4 million metric tons per annumnitrogenous fertilizer plant within the client’s existing petrochemicals complex in Nigeria. Oncompletion, the plant will produce granulated urea that will both be sold domestically andexported. An 84km pipeline from the gas supplier’s facility to the plant will be developed inconjunction. The plant will consist of a 2,300 metric tons per day ammonia plant and a 4,000 tpdurea production plant. The investment is expected to help improve farm yields and agriculturalproductivity in Nigeria, and address the strong domestic demand for urea, estimated to grow at8% per annum over the next 20 years

December 2012

Vietnam: Nghi Son Refinery & Petrochemicals

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Sponsors

Location of project

Board Approval Date:

IFC Investment: $300 million IFC Loan and $450 million Syndication – not committed

35.1% - Idemitsu Kosan,35.1% - Kuwait Petroleum Europe B.V.25.1% - Vietnam Oil and Gas Group4.7% - MitsuiChemicals, Inc.

Vietnam

Project Description: The project consists of the construction and operation of the Nghi Son Refinery and Petrochemical Complex with 200,000 bpd capacity aimed at the domestic fuel market.

September, 2011

Project Cost US$8.2 billion

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Mexico: Etileno XXI

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Sponsors

Location of project

Commitment Date:

IFC Investment: A Loan of up to US$285M. IFC played a leading role on the Mobilization (B Loan) of up to US$350 million.

The Project sponsors are Braskem S.A. (“Braskem”) and Grupo Idesa S.A. de C.V. (“Idesa”). Braskem and Idesa haveestablished Braskem Idesa (the “Company”). Braskem and Idesa will hold shareholding interests of up to 65% and up to35%, respectively, in the Company. Braskem is a listed Brazilian company and a leading thermoplastic resin producer.Idesa is a privately owned Mexican petrochemical company dedicated to the production of petrochemical products.

The Project will be located in Nanchital de Lazaro Cardenas, in the state ofVeracruz, Mexico.


Etileno XXI (the “Project”) consists of the development, construction and commercial operation of a petrochemical complex in Mexico, composed of one cracker facility to produce ethylene from ethane, integrated to three polyethylene ts with an aggregate nominal capacity of 1,050,000 tons per year. Access to competitively priced feedstock will make the Project one of the most competitive in the Americas. The Project seeks to serve the Mexican polyethylene market, which is rapidly growing and currently being supplied in part by imports.

December 2012

Project Cost The total Project cost is estimated at US$4.3 billion.

“2012 Latin American Project Finance Deal of the Year” award by Euro Money

Execution: EPC under construction. EPC consortium international/local companies.

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Off-take Agreements: Project aimed to local market. No single off-taker.

Feedstock Supply: Ethane Supplier is PGPB. Agreement Etileno XXI/PGPB prior to Financing. PGPB needs to invest in gas separation. LongTerm Supply Agreement. Formula is based on international standards. No alternative supplier.

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INTERNATIONAL FINANCE CORPORATION

Anil ChandramaniChief Investment Officer &

Global Client Relationship Executive,

Chemicals & Fertilizers Sector

Washington DC

Phone: +1-202-473-4081

Cell Phone: +1 202 830 8398

E-mail: [email protected]

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