EBRD: Financing opportunities for Natural Resources projects in Central AsiaMINEX Central Asia 2015, Astana, Kazakhstan19 March 2015

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Agenda

• What is EBRD• EBRD in Central Asia• Energy and Natural Resources, Russia and Central Asia

team• EBRD goals• The New Subsoil Use Code• EBRD products and approval process

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EBRD in numbers

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12

2000

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2014*

Ne

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AB

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Debt ABV Equity ABV Net Cumulative Business Volume

• €95bn invested since 1991

• 4,188 projects

• €38,7bn portfolio in 2014

• 85% debt and 10% equity and guarantee 5%

• 70% of portfolio in the private sector in 2014

• €8.6bn invested in 2014

• 377 projects signed in 2014

• AAA/Aaa rated institution

EBRD goalsERCA teamEBRD in Central Asia

What is EBRD

Subsoil Use Code

Project Support Instruments

Contacts

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Where do we operate?

38 offices and 34 countries. Half of banking team in the region.

EBRD goalsERCA teamEBRD in Central Asia

What is EBRD

Subsoil Use Code

Project Support Instruments

Contacts

© European Bank for Reconstruction and Development 5

Present in Central Asia since 1993

EBRD goalsERCA teamEBRD in Central Asia

What is EBRD

Subsoil Use Code

Project Support Instruments

Contacts

Presence on the ground 6 offices

Number of projects to date 547

Net cumulative Bank investment €9,178*m

Portfolio€3,263*m

Operating assets€2,248*m

Private share of portfolio 59%

Number of projects in 201471

Annual Bank Investment in 2014 €803*m

* data for January 2015

Portfolio Composition

Annual Bank Investment & Operations

ERCA: Dedicated sector approach and multidisciplinary teams

EBRD goalsERCA teamEBRD in Central Asia

What is EBRD

Subsoil Use Code

Project Support Instruments

Contacts

Mining & Services

Our Team

• 11 professional bankers focused on Russia and Central Asia Permanent presence in: Almaty, Astana, London, Moscow

• Technical expertise through in-house engineers Power, petroleum, downstream, mining engineers

Key sectors

O&G extraction, transportation, refining

Power

• Support of the private sector and transition to market economy

• Environmental and Social Policy plays a crucial role (IED, BAT)

• Energy, Resource and Material Efficiency, helping companies to advance on the cost curves

• Supporting transparency in the sector (e.g. EITI, PWYP)

• Attraction of other lenders and third party finance

• Regulatory best practices

• Long-term agenda to reduce GHG emissions through market based mechanisms, Gas Flaring Reduction

EBRD goals

EBRD goalsERCA teamEBRD in Central Asia

What is EBRD

Subsoil Use Code

Project Support Instruments

Contacts

The New Subsoil Use Code

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The Bank is engaged with the Government, industry associations and companies to develop a new Subsoil Use Code. The new Subsoil Code will regulate all operations covering exploration and production activities for oil, gas, metals and commonly occurring mineral resources.

• Ministerial Working Group. The Bank invited as a participant to focus on:

− Preparation of the plan for transfer from the Soviet GKZ reserves and resources evaluation standards to internationally recognised standards;

− Improvement of HSE regulations in subsoil use;

− Improvement of administration of the subsoil use contract and decreasing the level of Government regulation in the subsoil sector.

• What would help to make projects bankable:

− Guaranteed transition from exploration into production stage

− Subsoil users shall have more freedom in making investment and engineering decisions when the Government would focus on HSE and social aspects of the project

− Introduction of international standards, including reserve and resources evaluation standards

− Possibility to pledge subsoil use contract to banks

− Tax incentives to early stage prospecting or exploration projects

EBRD goalsERCA teamEBRD in Central Asia

What is EBRD

Subsoil Use Code

Project Support Instruments

Contacts

Market conditions and trends in financing

This type of investment project is very rare in the current market conditions and availability of investments

New asset development

EBRD goalsERCA teamEBRD in Central Asia

What is EBRD

Subsoil Use Code

Project Support Instruments

Contacts

01/01/10 01/04/11 01/07/12 01/10/13 01/01/150

2,000

4,000

6,000

8,000

10,000

12,000

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Copper Brent Iron Ore

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Gold Silver

Price dynamics of certain commodities

The companies are interested in improvements of existing assets to reduce cost base (cost curve) and increase efficiency of operations: investments in new mining equipment; energy efficiency and increased production efficiencies at processing and metallurgical stages, EHS aspects, etc.

Modernisation and improvements of an

existing asset

EBRD Product Flexibility and Approval process

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Loans• Project-based financing to

public or privately-owned companies and concessionaries

• Senior, subordinated, convertible

• LT (up to 10 years or more) or ST revolving

• Floating / Fixed rates.

• Choice of currencies (€, $, KZT)

• Possibility to structure A/B financings and syndicate to market

Equity• Common stock or preferred

• Minority position only(up to 35%)

• Mezzanine

Other

• Partial guarantees

• Currency swaps

• Bonds

• TCs and facilities

Concept Review

Structure Review

FinalReview

Board Approval

Signature

Due DiligenceTechnical/Commercial feasibility

Final negotiation

Approval Process

EBRD goalsERCA teamEBRD in Central Asia

What is EBRD

Subsoil Use Code

Project Support Instruments

Contacts

Contacts

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For all further enquiries, please contact:

Aida SitdikovaDirectorEnergy & Natural ResourcesRussia & Central AsiaTel: +7 495 787 1111 (ext. 103)Email: SitdikoA@ebrd.com

Yerlan RamazanovPrincipal BankerEnergy & Natural ResourcesRussia & Central Asia+7 7172 580 204 (ext. 113)Email: RamazanY@ebrd.com

EBRD, One Exchange SquareLondon, EC2A 2JN United Kingdomwww.ebrd.com

EBRD goalsERCA teamEBRD in Central Asia

What is EBRD

Subsoil Use Code

Project Support Instruments

Contacts