Discover the EurOrient Financial Group

Contents What is the EurOrient Financial Group?...............................................................................................3 Our Challenge………………………………………………………..………………………..6 What is Finance for Development?.........................................................................................................7 What are the Millennium Development Goals?....................................................................................9 EurOrient Financial Group on Development………………………….……………………..11 The Role of the EurOrient Financial Group in a Changing World…………………………...12 Our Work…………………………………………………………………….……………....13 What we do?..............................................................................................................................................15 Where do we invest?................................................................................................................................17 What is our source of funds?..................................................................................................................19 How we do it?...........................................................................................................................................22 Our defining characteristic…………………………………………………………………...24 The EurOrient Financial Group - client relationship…………………………………………27

 

 

 

 

 

 

    

- What is the EurOrient Financial Group?

“EurOrient Financial Group is the world’s first private-sector global development finance institution and the only development agency with a global charter to invest in both public as well the private sector.”

We live in a world so rich that global income is more than $31 trillion a year. In this world, the average person in some countries earns more than $40,000 a year. But in this same world, 2.8 billion people—more than half the people in developing countries—live on less than $700 a year. Of these, 1.2 billion earn less than $1 a day. As a result, 33,000 children die every day in developing countries. In these countries, each minute more than one woman dies during childbirth. Poverty keeps more than 100 million children, most of them girls, out of school. The challenge of reducing these levels of poverty, while the population continues to grow—by an estimated 3 billion people over the next 50 years—is enormous. EurOrient Financial Group (“EurOrient” or the “Group”) is the world's first private sector global development financial institution. EurOrient's mission is to mobilize financial, technical and human resources for the benefit of developing economies seeking sustainable economic development and poverty reduction. It provides debt and equity and equity like financing, policy advice and technical assistance. EurOrient Financial Group today consists of five jointly-owned financial institutions with a common mission and distinct mandates towards its fulfillment. The EurOrient's principal objective is to reduce poverty and promote sustainable economic growth. EurOrient Financial Group invest in projects and programs that promote social development, build human capacities, and address host government

 

priorities for investments in physical infrastructure that also enhances social development. These projects include roads, transportation and communication systems, water, sanitation and other types of investments with social development outcomes such as improved quality of life and increased human knowledge and skills. Founded in 1988, since its formation, EurOrient Financial Group has dedicated its resources to provide financing and technical assistance to project sponsors, suppliers, government and other bidding consortia in structuring and implementing financial transactions for major international public, project and corporate financing ventures. EurOrient finances investments with its own resources and by mobilizing capital in the international capital markets. Not a bank, but rather a specialized agency. The EurOrient Financial Group is not a “bank” in the common sense, but rather a specialized agency. EurOrient is a private sector global development

financial institution accredited by the United Nations General Assembly on Financing for Development. Our mission is to support the economic and social development efforts of the less developed countries as they, in particular, seek to achieve the Millennium Development Goals ("MDGs"). The EurOrient Financial Group is transforming from a relatively straightforward project financier institution into a full-fledged private sector global development bank responding to a wide range of development needs. As the needs of the developing countries continue to

implement economic reforms; as their needs for infrastructure, human resources, and new technology grow; as investments in environmental protection become more pressing; and as socioeconomic concerns like poverty, education, health and population, water supply and sanitation, and urban development and housing become more urgent, the EurOrient faces increasing demands on its assistance and services. The EurOrient's way of operating has changed over the years and has undergone rapid change since the beginning of the 1988s as it has sought to adapt to the changing needs of emerging countries and economies in transitions in a globalized world economy. Most recently, the EurOrient's Chairman of the Board of directors, Mr. Ron Nechemia, has launched an ambitious reform agenda, aimed at increasing the EurOrient's development effectiveness in four priority and related areas: refueling current business activities; refocusing the development agenda; retooling the EurOrient's knowledge base; and revamping institutional priorities.

 

The EurOrient name draws inspiration from a ring, which has been used cross-culturally for thousands of years as a symbol of partnership and commitment. The ring serves as a connector, a bridge between the Eastern and the Western cultures with the rest of the world “This represents our underlying brand values of trust, enduring partnerships for development and fruitful relationships”,

explains Mr. Ron Nechemia, the founder of EurOrient Financial group and the founding father of private sector development banking. “We see ourselves as international public servants, we seek to form relationships and partnerships based on integrity and trust wherein we can provide innovative services reflecting our commitment to support a wide range of developing countries’ needs at all stages of development”.

EurOrient Financial Group employs people from every region of the world. While our employment diversity initiatives are well-established in its global context, EurOrient aims to achieve employment diversity to the extent that our development professionals are representatives from nearly every country in the world working in the EurOrient's Los Angeles headquarters or in its country offices.

 

- Our Challenge

At the EurOrient Financial Group (“EurOrient” or the “Group”) we have made the world's challenge—to reduce global poverty—our challenge and global agenda is our agenda. The EurOrient Financial Group focuses on achievement of the Millennium Development Goals that call for the elimination of poverty and sustained development. The goals provide us with targets and yardsticks for measuring results. Our mission is to support the economic and social development efforts of the less developed countries as they, in particular, seek to achieve the Millennium Development Goals ("MDGs").

 

EurOrient Financial Group aims at delivering its strategic agenda through a selective, planned, country-focused, and technically viable program of assistance to the benefit of the developing nations. The overall strategic approach of EurOrient is determined by its long-term strategic framework, the medium-term strategy, and the poverty reduction strategy; and its strategic priorities take into consideration global and internationally accepted perspectives and goals. The overarching goal, strategic objectives, and operational themes and priorities of EurOrient Financial Group are translated into an individual Country Investment Strategy and Program (CISP) for each developing nation through the planning and programming cycle. The elements used for this translation are:

(i) clear linkage between the individual Country Investment Strategy and Program and EurOrient Financial Group’s strategic priorities and objectives, and alignment with the long-term strategic framework, the medium-term strategy, and the poverty reduction strategy;

(ii) economic, thematic, and sector assessments of the emerging economies and economies in transitions;

(iii) strategic, thematic, and sector focus, and selectivity for investment programs; and (iv) The EurOrient Financial Group thematic product will invest in securities based on

national themes and is designed to identify longer-term trends in the marketplace

A group photo of the High-level Plenary Meeting of the Sixtieth Session of the General Assembly (2005 World Summit). The World Summit, being held from 14 to 16 September 2005, is the largest gathering of world leaders in history.

 

and to mobilize capital, human resources and technology for the benefit the individual investment selection.

- What is Finance for Development? “…..infrastructure development in emerging markets continues to expect significant long-term financing needs estimated at $21 trillion for 2008-2017.” Most of the world's nations lack investment funds that could promote economic development – funds needed to build roads, schools, clinics and factories. As a result, their economies languish and their populations remain poor.

EurOrient Financial Group (“EurOrient” or the “Group”) is committed to sustainable and equitable development of developing economies. EurOrient shares the widely held belief that substantial foreign direct investment is needed to boost development in developing countries. “The World Bank, for instance, in 2000 suggested that Infrastructure funding gaps in developing economies are staggering. Africa faces an infrastructure financing gap of US$35 billion per year (World Bank, 2008). For Asia, it is estimated that the total infrastructure financing gap averaged around USD420 billion per year over the period of 2006-2015...” EurOrient strongly believes, however, that debt or equity financial resources alone are insufficient to support development. Well-trained and healthy human capital, technology and knowledge transfer, institutional strengthening, equal access to the international marketplace and the discipline and balance of public-private development partnerships must also be available in order for emerging societies to be truly transformed.

For developing countries, higher growth often translates into reduced poverty, better education and health care, and greater economic opportunity. That growth, in turn, depends on cost-effectively built and efficiently managed modern infrastructure. Without adequate roads and ports to link towns and continents, stable energy production to power factories and sewage systems, clean water and effective sanitation services to help lower health care costs and improve the quality of life, and modern communications technology to exchange ideas and information, the promise and benefits of a fully integrated international economy will not be realized or equitably shared.

In March 2002, the United Nations held an International Conference on Financing for Development to address this problem. The conference focused on six different sources for development funds - domestic resources (such as savings and taxation), foreign direct investment, international trade, international aid, debt relief, and finally systemic reforms. NGOs and others independent voices proposed alternative sources of financing, including especially global

Mr. Ron Nechemia the Permanent Representative to the United Nations and the Chairman of the Board of Governors of the EurOrient financial Group being briefed at the project site

 

taxes and fees. They also asked fundamental questions: who should receive the financing, and for what kind of development? Furthermore, they asked, can poverty be erased if power and wealth are increasingly concentrated in the global economic system? This page contains information on the different ways to mobilize finances for development, and provides information on the international conference on financing for development, its preparation, and follow-up.

Working to cut poverty. At present, more than a billion people are living on less than $1 a day, and more than three-quarters of a billion people are malnourished. The EurOrient's role in low-income countries is changing as these countries grow and mature. But its central goal remains the same: to help promote economic stability and growth, laying the ground work for deep and lasting poverty reduction. Its current main priority is to help low- and middle-income countries cope with the adverse effects of the global economic crisis. To that effect, it is stepping up investment and lending to low-income countries to combat the impact of the global recession.

 

- What are the Millennium Development Goals?

The Millennium Development Goals (“MDGs”) are eight goals to be achieved by 2015 that respond to the world's main development challenges. The Millennium Development Goals are drawn from the actions and targets contained in the Millennium Declaration that was adopted by 189 nations-and signed by 147 heads of state and governments during the United Nations Millennium Summit in September 2000. The MDGs represent a compact between all the world’s major economic players. Poorer countries pledged to improve policies and governance and increase accountability to their own citizens; wealthy countries pledged to provide the resources. Since the commitment to achieve the goals comes from the highest political levels, for the first time, entire governments are committed to their achievement – including the trade and finance ministers who hold the world’s purse strings. And major international financial institutions – the World Bank, the I International Monetary Fund, the EurOrient Financial Group, the regional and development banks, and increasingly, the membership of the World Trade Organization – have made explicit that they will be accountable for achieving the goals also.

The Millennium Development Goals:

• synthesise, in a single package, many of the most important commitments made separately at the international conferences and summits of the 1990s;

 

• recognise explicitly the interdependence between growth, poverty reduction and sustainable development;

• acknowledge that development rests on the foundations of democratic governance, the rule of law, respect for human rights and peace and security;

• are based on time-bound and measurable targets accompanied by indicators for monitoring progress; and

• bring together, in the eighth Goal, the responsibilities of developing countries with those of developed countries, founded on a global partnership endorsed at the International Conference on Financing for Development

General  view  of  the  opening  session  of  the Millennium Summit as Tarja Halonen (Finland), Co‐chair of the Summit, addresses the Assembly.

 

in Monterrey, Mexico in March 2002, and again at the Johannesburg World Summit on Sustainable Development in August 2002.

The Goals

1. Eradicate Extreme Poverty and Hunger Halve the proportion of people in extreme poverty, and the proportion of people who

suffer from hunger, by 2015. 2. Achieve Universal Primary Education Ensure by 2015 that all boys and girls complete a full course of primary schooling. 3. Promote Gender Equality and Empower Women Eliminate gender disparity in primary and secondary education, preferably by 2005, and

at all levels by 2015. 4. Reduce Child Mortality Reduce by two-thirds the mortality rate among children under age five by 2015. 5. Improve Maternal Health Reduce by three-quarters the maternal mortality ratio by 2015.

6. Combat HIV/AIDS, Malaria, and Other Diseases Halt and begin to reverse the spread of HIV/AIDS, the incidence of malaria, and other major diseases by 2015. 7. Ensure Environmental Sustainability Reverse the loss of environmental resources; by 2015, reduce by half the proportion of people without sustainable access to safe drinking water; and by 2020, improve significantly the lives of at least 100 million slum dwellers. 8. Develop a Global Partnership for Development

Develop further an open, rule-based, predictable, nondiscriminatory trading and financial system, and address the special needs of the least developed countries, landlocked countries, and small island states; deal comprehensively with the debt problems of developing countries; develop and implement strategies for decent and productive work for youth; provide access to affordable essential drugs; and make available the benefits of new technologies

- EurOrient Financial Group on Development

Poverty in all its forms is the greatest challenge to the global community. Of special concern are the 1.2 billion people living on less than $1 a day and the additional 1.6 billion living on less than $2 a day. Four-fifths of the people of the world are living in the developing countries, most with improving conditions. But the number in absolute poverty and despair will still be growing. All people are made less secure and vulnerable by the poverty that exists in the world.

The moral imperative of support for development is self-evident, it is now clear that not only environmental, but also social, cultural and political sustainability of development efforts are essential for the security and well-being of people and the functioning of the complex, interdependent global system now emerging.

EurOrient Financial Group (“EurOrient” or the “Group”) solidarity with the people of all countries causes us to seek to expand the community of interests and values needed to manage the problems that respect no borders from environmental degradation and securing energy future, to bridging the digital divide between the industrialized and developing countries.

One of the key leadership challenges of our time is to find new ways to harness the innovation, technology, networks and problem-solving skills of the private sector, in partnership with others, to support the United Nations Millennium Development Goals and other international development goals, and to do so in a manner that makes sound business sense, and does not replace or undermine the role of government. Without such investment, hopes for conquering poverty – and therefore for creating peaceful, stable, functioning societies on all continents -- will remain unfulfilled and will leave the world at greater risk of violence and other ills.

Without development and hope, there will be no peace.

PERMANENT REPRESENTATIVE TO THE UNITED NATION; AND

EURORIENT FINANCIAL GROUP

RON NECHEMIA Chairman of the Board of Governors

 

- The Role of the EurOrient Financial Group in a Changing World

EurOrient Financial Group (“EurOrient” or the “Group”) is a private sector global development finance institution accredited financial institution by United Nations General Assembly on Financing for Development. The mission of the EurOrient Financial Group is to support the economic and social development efforts of the less developed countries as they, in particular, seek to achieve the Millennium Development Goals ("MDGs"). EurOrient Financial Group works to generate shared and sustainable prosperity in developing economies. The EurOrient actively creates, applies and integrates knowledge from lessons learns from operations across world to address development challenges. Founded in 1988, since its formation, EurOrient Financial Group has dedicated its resources to provide financing and technical assistance to project sponsors, suppliers, government and other bidding consortia in structuring and implementing financial transactions for major international public, project and corporate financing ventures. EurOrient finances investments with its own resources and by mobilizing capital in the international capital markets. The EurOrient's principal objective is to reduce poverty and promote sustainable economic growth. EurOrient Financial Group invest in projects and programs that promote social development, build human capacities, and address host government priorities for investments in physical infrastructure that also enhances social development. These projects include roads, transportation and communication systems, water, sanitation and other types of investments with social development outcomes such as improved quality of life and increased human knowledge and skills. The EurOrient's primary activities and programmes seek to:

• Change the way that growth strategies are conceived, designed, and implemented • Reinvent production-related policies to facilitate countries' move to higher productivity

activities • Extend markets to the underserved and empower the disenfranchised • Improve service delivery in education, health, and other social services • Design institutions, policies and practices that promote sustainable development that meets

human needs while conserving the earth's life support systems

 

- Our Work EurOrient Financial Group (“EurOrient” or the “Group”) notes that a revolutionary change has swept the globe resulting in the global economic integrations, private capital flows are at least five times greater than official assistance, where many different actors (from multilateral banks to nongovernmental organizations) now play a much greater role in development, and where technological change has revolutionized the way business is done. Recognizing the remarkable scale of these changes, EurOrient Financial Group is convinced the world is at a pivotal juncture. The EurOrient believes that these changes mandate a full review of EurOrient’s investment policy priorities and a complementary retooling and restructuring of the principal instruments of this policy. The EurOrient Financial Group also notes that the necessity to enhance the effectiveness investment operation by 2010 adds an additional imperative--the need to review the investment operations with a careful eye to ensuring the most cost-effective use of these increasingly scarce dollars.

  

EurOrient Financial Group further notes that while this year EurOrient has accelerates this process, it by no means finishes it. The road ahead will be an arduous one and the decisions facing by the Treasury Board of EurOrient Financial Group will be increasingly difficult. Finally, the EurOrient Financial Group notes with special attention the seriousness with which it accepts these responsibilities. Our actions in the area of investment operations are perhaps unique in that they directly affect the lives and security of millions of less fortunate human beings around the world.

 

Working to cut poverty. At present, more than a billion people are living on less than $1 a day, and more than three-quarters of a billion people are malnourished. The EurOrient's role in low-income countries is changing as these countries grow and mature. But its central goal remains the same: to help promote economic stability and growth, laying the ground work for deep and lasting poverty reduction. Its current main priority is to help low- and middle-income countries cope with the

adverse effects of the global economic crisis. To that effect, it is stepping up investment and lending to low-income countries to combat the impact of the global recession. EurOrient Financial Group seeks to promote country and community ownership of development efforts in order to respond quickly to crisis; supporting increased investments in human development, specifically for marginal groups; and encouraging private sector-led and equitable shares in economic growth. EurOrient has established and maintains going diplomatic and working relationships with the various representatives, offices and departments of central governments as well as provincial and local government officials, multilateral and bilateral development financial institutions, and officers and executives of public and private financial institutions. The EurOrient Financial Group is using a broad range of financing instruments, tailored to specific projects or programs. The main instruments are loans, equity investments and guarantees. The EurOrient applies sound banking and investment principles in all its operations.

 

- What we do? Financing emerging countries and economies in transition is what we do.

EurOrient Financial Group (“EurOrient” or the “Group”) is an innovator in global finance, serves the financial needs of corporations, governments and municipalities, institutional clients, and high net worth individuals worldwide. Founded in 1988, EurOrient Financial Group through its affiliates development financial institutions and part of its body organ maintains leadership positions in emerging market equity and fixed income sales, investment banking, private investment management, asset management and private equity. The EurOrient is headquartered in Los Angeles, California, and operates in a network of offices around the world.

Working with partner organizations and using a variety of mechanisms, the EurOrient Financial Group helps client countries mobilize the financing needed to promote economic and social development. This includes support through innovative financial mechanisms, such as the- Clean Technology Fund, sovereign and municipal bond issuance, as well as direct EurOrient lending and investment.

EurOrient Financial Group fosters sustainable economic growth in developing countries by financing private and public sector initiatives, mobilizing capital in local and international financial markets, and providing advisory and risk mitigation services to businesses and governments. The EurOrient Financial Group vision is to become a full-fledged global development bank, as it evolving from mere project financier, which is dedicated to address emerging challenges of development and circumstances, and the financial risks, which are posed by global trends as we move into 21st century. In fiscal year 2010, the EurOrient Financial Group will issue securities for a total volume equivalent to US$4 billion. For fiscal year 2011 and beyond, annual securities issuance is expected to be around US$4 to 5 billion Community Investment Strategies

 

EurOrient Financial Group is a socially responsible investor. EurOrient is integrating traditional fundamental analysis of projects and programs with in-depth assessment of select social and environmental factors in the investment decision-making process. The EurOrient investment model embraces core commercial competencies, skills and products, while others are being established as profit-making ventures and business activities. Within this framework, socially responsible

investments are focused on improving the access of low-income households, entrepreneurs and communities to essential products, services, resources and opportunities while also providing support to the national development strategy. EurOrient Financial Group is continually presented with opportunities and requests for financing of all types in support of a country’s national development agenda from both public and private entities. These prospective transactions are initially screened for development impact assessment. In analyzing these requests, EurOrient evaluates projects using Development Impact Key Indicators, which is a score-card-style rating system. EurOrient weighs each investment decision in terms of four impact factors, they are: commercial, social, environmental and good governance. Under our vision, sustainable growth in developing countries is not possible without a healthy private sector. EurOrient Financial Group therefore seeks to maximize the development impact of its investments for private entrepreneurs, businesses and financial institutions in developing countries. Through its investments the EurOrient Financial Group promotes:

■ economic growth in its countries of operations ■ entrepreneurship, competition and privatisation ■ stronger financial institutions and legal systems ■ infrastructure development ■ adoption of strong corporate governance, including environmental sensitivity ■ structural and sectoral reform

 

- Where do we invest? EurOrient Financial Group (“EurOrient” or the “Group”) invests in projects and programs that promote social development, build human capacities, and address host government priorities for investments in physical infrastructure that promote and enhance social development. These projects include roads, transportation and communication systems, water, sanitation and other types of investments with social development outcomes such as improved quality of life and increased human knowledge and skills.

The EurOrient Financial Group targets investment opportunities in such industries as:

• Electrical generation and distribution, including independent power projects, power transmission, power storage;

• Telecommunications systems and related services, including wireline/wireless equipment and facilities, cable and satellite transponder systems;

• Transportation, including airports, seaports, toll roads, bridges, and rail and mass transit systems;

• Petroleum, including exploration, production, refining and transportation; • Petrochemicals, including additives, natural gas such as pipelines and LNG facilities,

liquefied petroleum gas (“LPG”) and compressed natural gas (“CNG”); • Hi-tech systems and related services such as infrastructure technology, information

technology, engineering process innovations; • Science and technology, including media, and biotech; • Financial services such as banking and insurance; and • Land development such

as commercial and residential real estate development and public spaces

• Any other infrastructure project of similar nature, notified by EurOrient Financial Group.

 

 

Target Investment The following are broad categories of the type of infrastructure investment actively sought or considered by EurOrient:

I. Companies undergoing post-privatization restructuring or engaged in mergers and acquisitions as a result of industry consolidation in the most mature and active sectors and countries;

II. Privatization of commercial public services (such as power, gas, telecommunications, water,

roads, railroads, ports, and airports); and III. Selective start-ups and green field projects

Sectors the EurOrient Financial Group does not finance

The EurOrient Financial Group will not provide financing for defense-related activities, the tobacco industry, selected alcoholic products, substances banned by international law and stand-alone gambling facilities.

- What is our source of funds? EurOrient Financial Group (“EurOrient” or the “Group”) is the world’s first private-sector global development finance institution accredited by the United Nations General Assembly on Financing for Development. EurOrient is the only development agency with a global charter to invest in both public as well the private sector. In pursuing its vision, EurOrient’s main instruments comprise investment, loans, technical assistance, advice, and knowledge. EurOrient Financial Group obtains operational and investment resources by offering its securities and those of its investment funds, to international public and private institutional investors. These include multilateral and bilateral development banks, pension funds, insurance companies, commercial banks, endowments and foundations, mutual funds, private trusts, corporations and accredited individual investors. EurOrient seeks to diversify its sources of financing by offering its securities in the international capital markets and in multiple currencies. The EurOrient Financial Group was founded in 1988 and issued its first security in 1990. Since then, it has continuously developed innovative debt and equity products, opened up new markets for issuance, and built-up a broad investor base around the world. EurOrient Financial Group debt and equity securities are offered in all major international borrowing currencies. EurOrient issues debt and equity securities in different currencies to fund economically viable development projects in emerging countries and economies in transition. The objective is to provide investors with a broad choice of currencies. In many instances, this involves opening new markets for bond and equities issuance, thereby promoting local capital market development. The EurOrient's financing requirements are primarily determined by its investment and lending activities for development projects. As EurOrient Financial Group investment and lending has changed over time, so has its annual financial mobilization programs. In fiscal year 2010, the EurOrient Financial Group will issue securities for a total volume equivalent to US$4 billion. For fiscal year 2011 and beyond, annual securities issuance is expected to be around US$4 to 5 billion.

 

EurOrient Financial Group has adopted a lending and investment methodology, and policies and procedures based on it, which is intended to assure the creation of a portfolio of assets of consistent financial soundness and credit quality. EurOrient’s investment and lending policies and procedures

focus heavily on project design, project evaluation and portfolio risk management. EurOrient aims to achieve an investment grade credit rating for itself that is higher than that achievable by many emerging market countries and projects. That savings on funding costs in part may be used to strengthen EurOrient Financial Group and in part passed on to EurOrient’s clients. The EurOrient Asset Management Group agencies the EurOrient Private Equity Management Group (“EPEMG”), EurOrient Merchant Banking Group (“EMBG”), EurOrient Asset Management Group (“EAMG”) and their agencies, the private sector lending and investment affiliate of the EurOrient Financial Group, also offers debt and or equity instruments.

Securities Characteristic Socially Responsible Investing (“SRI”) is one of many terms used to describe an investment strategy aiming to maximize social good and financial returns. Others include social, sustainable, ethical, and mission-based investing The mission of the EurOrient Financial Group (“EurOrient” or the “Group”) is to support the economic and social development efforts of the less developed countries as they, in particular, seek to achieve the Millennium Development Goals ("MDGs"), in a sustainable way by investing in projects and programs that promote social development, build human capacities, and address host government priorities for investments in physical infrastructure that promote and enhance social development. These projects include roads, transportation and communication systems, water, sanitation and other types of investments with social development outcomes such as improved quality of life and increased human knowledge and skills. This made EurOrient Financial Group debt and equity securities suitable for investors with such an investment strategy. EurOrient's debt and equity securities finance projects that emphasize the need to (1) invest in people, particularly through strengthening basic health and education systems, (2) protect the environment by strengthening governance and reducing environmental degradation, (3) support private business development, (4) strengthen the ability of governments to deliver quality public services, (5) promote reforms to create stable macroeconomic environments, and (6) foster social

 

development, inclusion, governance and institution-building as key elements of poverty reduction. For more information about the socially responsible investing nature of EurOrient Financial Group debt and equity securities.

Sustainable Investing in EurOrient Financial Group Securities EurOrient Financial Group (“EurOrient” or the “Group”) is the world’s first private-sector global development finance institution and the only development agency with a global charter to invest in both public as well the private sector. Using the Millennium Development Goals as a roadmap to reducing poverty, the EurOrient uses its financial resources, its highly trained staff, and its extensive knowledge base to help each developing country onto a path of stable, sustainable, and equitable growth. Proceeds from EurOrient Financial Group securities are used for projects that:

• Invest in people, particularly through making investment and in basic infrastructure, health and education

• Support rural development • Protect the environment • Support the governments to deliver quality services, efficiently and transparently • Promote reforms to create a stable macroeconomic environment, conducive to investment

and long-term planning • Focus on social development, inclusion, governance, and institution building as key elements

of poverty reduction.

 

- How we do it?

EurOrient Financial Group (“EurOrient” or the “Group”) is acting in Partnerships. The objective of EurOrient Financial Group partnership program is to address the challenge of formulation of high-impact, service delivery that tackle major global development challenges through expanded partnerships.

The EurOrient Financial Group aims to fulfill its mission of a professionally excellent institution that responds quickly to the evolving and varying needs of its clients and provides a wide range of high-quality services. These services operate through partnerships and act as a catalyst for private-public collaboration that also serves to build capacity as a knowledge-based organization

The EurOrient Financial Group partnership strategy is focused on building a broad network of partners at the global, regional and national levels through stronger collaboration and cooperation. Additionally, we are continually seeking to further strengthen our current collaboration efforts with current development partners while cultivating new strategic relationships as well.

The EurOrient Financial Group partnership strategy encompasses three pillars that are also aligned with developing countries’ own development strategy, namely: (a) investment in environmental protection and in clean energy; (b) investment in infrastructure; and (c) financial services.

Forging Partnerships:

 

The International Organizations (“IOs”): It is important for EurOrient Financial Group to partner with international organizations, such as the United Nations, and the Organization of Economic Cooperation and Development. These “organizations” play a major role in setting and influencing the international development agenda. International organizations are the links established between the provision of finance and the realization of specific policy outcomes including the Millennium Development Goals, and frameworks and policy initiatives such as Poverty Reduction Strategy Papers, the Fast Track Initiative, Managing for Development Results and the harmonization of donor and of development financial institutions practices.

The International Financial Institutions (“IFI”), China as well as most of the less developed countries are also Member States of Multilateral Development Banks (“MDBs”) such as the World Bank, the Asian Development Bank, where partnership is based on common objectives that provide a strategic advantage as well as added-value.

The National Government

EurOrient Financial Group actively seeks cooperation with organizations to strengthen the effectiveness, quality, and sustainability of the services it provides. The dialogue enables EurOrient Financial Group and its potential local partners to identify areas of complementary expertise leading to the improvement of operational policies, project design and implementation. The EurOrient Financial Group partnership for development approach emphasizes the need to place committed governments, and their people, at the center of their development process. EurOrient’s desire is to establish partnership with government agencies, such as but not limited to the national development banks, state development investment corporations, the provincial and other government investment agencies and with all major stakeholders around the country’s development strategy, programs, and projects.

• Ministry • Provincial Government • Local government • National Development Agencies

 

Mr. Ron Nechemia the Permanente Representative of United Nations and the Chairman of the Board of Governors of EurOrient Financial Group Addressing World Leaders at the United Nation Sponsored Summit on Financing for Development in Monterrey, Mexico, March 19-22, 2002.

Ministerial Segment.

 

- Our defining characteristic EurOrient Financial Group (“EurOrient” or the “Group”) produced a matrix of six development agencies characteristics that can be used to evaluate and guide the work, systems and principles of various agencies. A careful assessment of these characteristics can be useful in identifying the presence of international development financial institutions and gauging its strength within a particular context, and helpful in matching organizational goals to specific actions that will encourage positive economic and social development.

“Development financial institutions and agencies” has occupied a central stage of global economic and social development since 1944, yet they are difficult to define, inherently complex, and resistant to being categorized or interpreted through a singular theoretical lens. As the development financial institutions are not “banks” in the common sense, but rather a specialized agency.

Development financial institutions and agencies, like other groups and institutions in modern societies, operate within and are conditioned by three types of systems: economic, political, and social. Better defining the characteristics development financial institutions it is necessary prerequisite for effective implementation. There are at least four features that define the characteristics: malleability, complexity, opportunity, and gravity.

The Institution:

Mandate The

Charter Investment Objective

Risk Characteri-

stics Instruments

Pricing Strategy

Market Response

EurOrient Financial Group

Global Mandate

Public and the private sector

Count for development impact (both economic rate of return as well social rate of returns)

Share the same risk as other (institutional) investors DOES accept Sovereign Guarantees

Loans, Investment, Guarantees and Technical Assistance

Has market pricing policy

Aligned to global development agenda, market driven, FAST responsiveness performance &profit-oriented

The World Bank Global Mandate

Limited to the Public sector

Count for development impact

Require Sovereign Guarantee payment for every transaction

Loans and Technical Assistance; does NOT make Investment

Concessio-nal Funding, that is subject to meeting political

Politically driven, SLOW responsiveness, good performance

 

agenda and political conditions

International Finance Corporation

Global Mandate

Limited to the Private Sector

Count for development impact (both economic rate of return as well social rate of returns)

Share the same risk as other investors does NOT accept Sovereign Guarantees

Loans, Investment and Technical Assistance

Concessio-nal Funding sources; and has market pricing policy

Politically driven, SLOW responsiveness and good performance

Asia Development Bank

Regional Mandate

Public and the Private Sector

Achieve development impact

Require Sovereign Guarantee payment for every Public Sector transaction

Loans, Investment and Technical Assistance

Concessio-nal Funding, that is subject to meeting political agenda and political conditions

Politically driven, SLOW responsiveness, good performance

Africa Development Bank

Regional Mandate

Public and the Private Sector

Achieve development impact

Require Sovereign Guarantee payment for every Public Sector transaction

Loans, Investment and Technical Assistance

Concessio-nal Funding, that is subject to political agenda and political conditions

Politically driven and Market driven, Good responsiveness, good performance & profit oriented

European Bank of Reconstruction and Development

Regional Mandate

Public and the Private Sector

Count for development impact (both economic rate of return as well social rate of returns)

Require Sovereign Guarantee payment for every Public Sector transaction

Loans, Investment and Technical Assistance

Concessio-nal Funding that is subject to meeting political agenda and political conditions

Politically driven and Market driven, Good responsiveness, performance & profit oriented

The development landscape at the end of the 20th century was shaped by global integration and localization. These forces offered EurOrient Financial Group founding members’ unprecedented opportunities for growth, and EurOrient was aiming to establish the first private global development bank that catered to serve the public and the private sectors of the emerging and transitional economies.

 

EurOrient Financial Group founding members under the leadership of Mr. Ron Nechemia, they established EurOrient in 1988 with a vision of creating a privately owned global development bank. EurOrient’s shareholding structure assures that the EurOrient will remain private sector oriented and that its operations will remain free and independent of any government’s foreign policy and political agenda. This independence will ensure that EurOrient development assistance is efficiently and effectively managed, based on good corporate governance and best practices, for the benefit of its shareholders, investors, and society at large. EurOrient Financial Group was created to be different, to be dynamic, flexible and innovative in its delivery of development financial services. EurOrient affirms the often forgotten fact, that, development must represent "...a transformation of society, a movement from traditional relations, traditional ways of thinking, traditional ways of dealing with health and education, traditional methods of production, to more 'modern' ways." And that development "is not about charity; it is about inclusion and empowerment, education, good health, security, and opportunity." To EurOrient, development is about putting people first, giving people a voice and better life and respecting their fundamental human rights. Because development is not about charity, it is about delivering what people want in a commercially viable, but socially responsible manner.

Mr. Ron Nechemia, the Chairman of the Board of Governors of the EurOrient Financial Group and the founding father of private sector global development banking

 

- The EurOrient Financial Group - client relationship

EurOrient Financial Group (“EurOrient” or the “Group”) is the world’s first private-sector global development finance institution and the only development agency with a global charter to invest in both public as well the private sector. The EurOrient Financial Group is a peculiar global development financial institution. Its main characteristics are the following:

- EurOrient Financial Group is the world’s first private-sector global development finance institution

- Unlike private investment banks or commercial banks, the EurOrient Financial Group has shareholders that do not receive dividends.

- Its investments are restricted to the emerging countries and economies in transitions. - Unlike the World Bank which can invest in public institutions or International Finance

Corporation (“IFC”), which can invest only in private sector enterprises, the EurOrient Financial Group can invest in both public and the private sector of the economy.

- Its investments have to respect environmental standards. - Unlike private investment banks or commercial banks, EurOrient Financial Group count for

development impact (both economic rate of return as well social rate of returns) - Unlike International Finance Corporation, and like the other multilateral development banks,

EurOrient Financial Group does accept sovereign guarantee payments. - Its mandate stipulates that it must only work in emerging countries and economies in

transitions that are committed to democratic principles. Nevertheless, some investments have been realized in certain countries that are far from being fully-edged democracies.

On a theoretical point of view, we consider the objective function of the EurOrient Financial Group as identical as that of any multilateral development banks. The EurOrient's principal objective is to reduce poverty and promote sustainable economic growth. EurOrient Financial Group invest in projects and programs that promote social development, build human capacities, and address host government priorities for investments in physical infrastructure that also enhances social development. However, its objective is to maximize profits from investment in projects and in programs by maximizing operational efficiencies and by deployment of new means to enhance productivity and by adding values. EurOrient makes use of all the instruments available on the financial markets to raise funds and protect its portfolio against risks. However, its constraints are different. It must invest in a restricted geographic area precluding it to diversify its portfolio with investments in safer places in the developed world. Therefore, in this respect, the EurOrient Financial Group faces a harder constraint than any other investment bank or commercial bank. On the other hand, not like in the case of the multilateral development banks, its shareholders do not guarantee it virtually against bankruptcy, which is similar to the case for any other private investment bank. This feature together farther challenging the EurOrient Financial Group to raise funds at the best conditions and, simultaneously, face the high risks inherent to the investments in emerging countries and economies in transitions.

In fact, the objectives of the EurOrient Financial Group are not totally identical to those of other investment banks or commercial banks neither EurOrient operates its business under similar terms and conditions to those of the multilateral development banks. The EurOrient Financial Group aims at being a catalyst for financial institutions and wants to avoid crowding them out. In other words, the EurOrient Financial Group does not see the multilateral development banks as competitors. However, in the EurOrient -client relationship, which is our concern in this paper, its objective is to mobilize financial, technical and human resources for the benefit of developing economies seeking sustainable economic development and poverty reduction, i.e., according to the EurOrient’s statement, to apply "sound banking principles" and counting for both economic rate of return as well social rate of returns.

 

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