Challenges and Opportunities in the

Mediterranean Region

Dilek Macit

EBRD’s objectives achieved through

financing the private sector

• AAA/Aaa rated multilateral

development bank

• Invested over €81.7 billion in more than 3,791 projects since 1991

• As at end July 2013:

• €3.6 billion invested in

187 projects

• Private sector accounted

for 72% share

• Debt 77%, Equity 22% &

Guarantee 2%

Note: Provisional data as at 31 July 2013

2

0

5

10

15

20

25

30

35

40

45

50

55

60

65

70

75

80

85

90

0

2

4

6

8

10

12

Net c

um

ula

tive b

usin

ess v

olu

me

Annual busin

ess v

olu

me (

AB

V)

Debt ABV Equity ABV Net Cumulative Business Volume

€ billion

EBRD in 2012 - Highlights

• EBRD projects hit record high level € 8.7 billion

• Net profit of € 1 billion compared to €173 million in 2011

• Received the backing of major international investment agencies, which re-

affirmed their Triple “A” Ratings and stable outlook for the EBRD

• Turkey become the second largest country for the Bank’s investments

• Egypt, Jordan, Morocco and Tunisia were granted potential recipient country

status

• Important milestone for EBRD’s largest nuclear safety project – on November

27, the first lifting stage of the New Safe Confinement over the Chernobyl

reactor was successfully completed

• On December 17, Kosovo became a member of the EBRD.

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The EBRD and its objectives

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

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The EBRD is:

• An engaged partner

• Operates in “business time”

• Private sector focused

• Wide product, currency, tenor range

• Facilitates inward and cross border

investments in the region

• Promotes policy dialogue with regards to

investment climate business environment

and policy matter

• Commercial focus

Where we operate

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Country group portfolio distribution

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25%

24%

19%

8%

7%

16% 1% Russia

South-eastern Europe

Eastern Europe & Caucasus

Central Asia

Turkey

Central Europe & Baltics

Southern & Eastern Mediterranean

Cumulative commitments €81.7bn

EBRD finances diverse range of enterprises

11%

16%

2%

5%

4%

27%

9%

7%

3%

17% Agribusiness

Manufacturing and Services

Information & Communication Technologies

Property and Tourism

Equity Funds

Financial Institutions

Municipal & Env Inf

Transport

Natural Resources

Power and Energy

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Cumulative commitments €81.7bn

Unaudited as at 31 July 2013

As of 1 November 2008 Turkey became EBRD’s

country of operations

Operational priorities:

• Improve the availability of risk capital and long term funding to the micro, small and

medium sized enterprise sector

• Emphasise investment along the food chain

• Support the delivery of vital utilities to the population and enterprises in the regions of

Turkey (Municipalities, Power & Energy)

• Promote energy efficiency and renewable energy across economic sectors

• Support the Turkish government’s privatisation programme in the enterprise and

financial institutions sector

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EBRD in Turkey

• In the past four years the EBRD invested in 78 projects with total project value of

€8.1 billion and net business volume of €2.6 billion

• Portfolio in private sector – 96%

• The Bank’s strategy for Turkey approved in April 2012

• EBRD pioneered the first Public Private Partnership (PPP) in Turkey: in the

autumn of 2012, an EBRD loan of US$ 150 million completed a US$ 1.4 billion

financing package to build the first road tunnel under the Bosphorus in

congested Istanbul, with the European Investment Bank (EIB) and other banks,

including Korea’s Eximbank, among the financiers.

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Rotor Wind Farm

Client

Rotor Elektrik Uretim A.S., owned by Zorlu Elektrik Uretim A.S. (incorporated in Turkey)

EBRD finance

Up to €45 million

Tenor

13 years (including one year grace)

Syndications/Co-Financing

IFC, EIB and commercial banks participate in financing package

Use of proceeds

To complete the construction of a 135 MW onshore independent wind power project in Osmaniye, Southern Turkey

Security

Lenders will receive pledge of shares

EBRD value added

Promotion of more widespread private ownership; first large wind farm project financing in Turkey which will help Turkey towards meeting its renewable energy targets; demonstration effect of new products and processes

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• The Arab Spring of 2011 has created major new transition

challenges in the Southern & Eastern Mediterranean (SEMED)

region.

• The May 2011 G8 Summit launched the Deauville Partnership to

support democratic transition, transparent government and

sustainable growth.

• EBRD shareholders later that year approved an expansion of

EBRD’s mandate to include 4 SEMED Countries (Egypt, Jordan,

Morocco and Tunisia).

• By decision of the Board in September 2012 EBRD is able to invest

in Jordan, Morocco, and Tunisia.

• Egypt was granted recipient country status in November 2012.

• Host Country Agreements have been signed with Egypt, Tunisia and

Jordan; negotiations are in progress with Morocco.

EBRD: Expansion into SEMED EBRD: Expansion into SEMED

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Three phased fast start

Reflecting progress in ratification

SPECIAL OPERATIONS ORDINARY INVESTMENT

OPERATIONS

2 3

TECHNICAL ASSISTANCE

1

• Market demand studies, project

preparation, plus advisory services for

small businesses

• €60 million in donor funding has been

made available for Technical Assistance.

• More than 70 technical cooperation

projects received funding (€37.7 million):

- €21.7 million was committed for 27

regional assignments,

- €4.8 million for 13 TC projects in Egypt,

- €4.6 million for 14 TC projects in Jordan,

- €5.4 million for 15 TC projects in

Morocco, and

- €1.1 million for 7 TC projects in Tunisia.

• Countries remain ‘potential’ and not full

countries of operation of EBRD.

• Operations funded through SEMED

Investment Special Fund (€1 billion

EBRD net income).

• 12 investment projects for €361 million

have already been signed as of end of

August.

• 5 Trade Facilitation Programme

Agreements were signed with 2 banks in

Jordan (Invest Bank and Cairo Amman

Bank) and 3 in Morocco (SGMB, BMCE

and BCP) for a total value of €162 million

• After ratification of the Amendment to

Article 1 of the Agreement Establishing

the EBRD, the Bank will be able to

finance investment operations with its

ordinary capital resources.

• Full country of operations status will be

given upon Board review in October

2013.

• Resources COULD allow up to €2.5

billion p.a. of business in long term.

From September2013 Since September 2012

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EBRD: Expansion into SEMED

Progress to date

• Temporary offices are operational in 3 countries.

• A permanent office in Tunis was opened in June 2013.

• The opening of permanent offices in Egypt, Jordan and Morocco is planned for

Q4 2013, with Amman scheduled for 22 October.

• Overall the Bank will increase its staff by 107 employees of which 50% will be

nationals of the SEMED Region.

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EBRD: Expansion into SEMED

Operational priorities in the region

• Support for the private sector with particular emphasis on SMEs.

• Developing non sovereign financing solutions for infrastructure including PPP

structures.

• Promoting sustainable energy and energy efficiency initiatives.

• Supporting and developing local capital markets.

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EBRD: Expansion into SEMED

Priority Sectors

1) Financial Sector

• Working through local banks to finance the SME sector.

• Trade facilitation and other services.

• Support for restructuring and institutional building of selected banks.

• Microfinance and other specialized institutions.

2) Infrastructure

• Support reform agenda for state enterprises including corporatisation, subsidy

reduction and privatisation.

• Introduction of legal and regulatory framework for PPPs and concessions.

• Direct investment in selected projects (ports, transport, waste management, etc.).

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EBRD: Expansion into SEMED

Priority Sectors (Cont.)

3) Financing Private Enterprises

• Manufacturing and Services including large corporates.

• Agribusiness and related industries (Food chain).

• Direct support for the SME sector.

• Financial restructurings in selected cases.

4) Energy efficiency

• Power sector reform (liberalisation, commercialisation, unbundling).

• Development of renewable energy.

• Natural resources, preferably in less favoured regions.

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EBRD in SEMED: Investment Projects

(August 2013)

12 projects signed across the region:

Project Name

Country

Portfolio

Class

Product

€, Million

2012

Aqualia Investment Venture- Water waste treatment plant Egypt Private Equity 9.9

IPP4 Al-Manakher Power Project- Edible oil producer Jordan Private Debt 124.6

LEF: Lesieur Cristal Morocco Private Debt 2.5

SGMB - SME Loan Morocco Private Debt 10.0

Maghreb Private Equity Fund III Regional Private Equity 20.0

Borges Tunisia – Olive oil producer Tunisia Private Debt 15.0

Total 2012

182.0

2013

EGIC (Egyptian German Company for Industrial Corporation SAE) Egypt Private Debt 18.9

Universal Metallurgical Company S.A.E. Egypt Private Debt 18.3

Abdali Mall Company Jordan Private Debt 60.1

Office National de L'Electricite et de L'Eau Potable – Rural electrification

and smart metering

Morocco State Debt

60.0

Capital North Africa Regional Fund II SICAV SIF SA Regional Private Equity 20.0

Soprol S.A.S. – Edible oil producer Regional Private Debt 2.0

Total 2013

179.2

Total Portfolio

12 projects 361.2

5 Trade Facilitation Programme Agreements were signed with 2 banks in Jordan (Invest Bank and Cairo

Amman Bank) and 3 in Morocco (SGMB, BMCE and BCP) for a total value of €162 million

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EBRD in SEMED: Investment Projects Pipeline

(August 2013)

In € million

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• Borrower: Abdali Mall Company

• EBRD Finance: Senior Loan of USD 80 million, including USD 33 million for sustainable resource investment

• Tenor: 10 years

• Use of Proceeds: To support the completion of Phase I of the Abdali Urban Regeneration Project: financing the development and operation of a retail and entertainment center

• EBRD added Value:

- new industry standards through implementation of advanced energy saving technologies in heating and cooling systems, lighting and waste water treatment

- first large-scale grey water recycling system in commercial real estate

- 2,000 new jobs and skills transfer through dedicated training programme

Abdali Retail and Entertainment Centre (Jordan)

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Conclusion

To Achieve Political, Economic and Financial Sustainability

in the Mediterranean Region

• Political Stability

• Predictable business environment

• Continuation of the reform processes

• Job creation based on investments through FDI but also local investments by the

private sector

• Find additional markets: Africa & Central Asia

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Contacts

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Hildegard Gacek

Managing Director, Southern and Eastern Mediterranean

Working Group (SEMED)

Tel: +44 (0) 2073388128, GacekH@ebrd.com

Egypt: Philip ter Woort

Director, Egypt

Tel: + 20 (0) 010 2457 7113, Terwoorp@ebrd.com

Morocco: Laurent Chabrier

Director, Head of Office

Tel: +212 656605180, Chabriel@ebrd.com

Jordan: Heike Harmgart

Head of Office, Amman

Tel: +962 777707747, harmgarh@ebrd.com

Tunisia: Marie-Alexandra Veilleux

Head of Office, Tunis

Tel: +216 70011501, veilleum@ebrd.com

Procurement opportunities

via web site: www.ebrd.com

Business Development and project proposals

Tel: +44 (0)20 7338 7168, newbusiness@ebrd.com

Dilek Macit

Director, Technical Cooperation

Tel: +44 (0)20 7338 6124, macitm@ebrd.com

Turkey: Michael Davey

Director, Istanbul

Tel: +90 212 386 1199 , daveym@ebrd.com

Turkey: Engin Goksu

Head of Office, Ankara

Tel: +90 312 205 59 60 3 , goksue@ebrd.com

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