IFC GLOBAL MINING -...
42
IFC GLOBAL MINING PRESENTATION FOR CLIENTS TOKYO - JULY 2017
Transcript of IFC GLOBAL MINING -...
IFC GLOBAL MININGPRESENTATION FOR CLIENTSTOKYO - JULY 2017
TABLE OF CONTENTS
1
IFC and the World Bank Group (Slides 2 - 8)
IFC’s Role in Global Mining (Slides 9 - 15)
IFC Mining Track Record and Selected Investments (Slides 16 - 25)
Annex (Slides 25 - 41)
IFC and the World Bank Group
IFC IS A MEMBER OF THE WORLD BANK GROUP
3
Conciliation
and
arbitration of
investment
disputes
Guarantees
of foreign
direct
investment’s
non-
commercial
risks
Interest-free
loans and
grants to
governments
of poorest
countries
Loans to
middle-
income and
credit-worthy
low-income
country
governments
Solutions
in
private
sector
development
IBRD
International
Bank for
Reconstruction
and
Development
IDA
International
Development
Association
IFC
International
Finance
Corporation
MIGA
Multilateral
Investment
and
Guarantee
Agency
ICSID
International
Centre for
Settlement of
Investment
Disputes
• 104 regional offices present in 98 countries worldwide
• 3,757 staff (59% are based outside Washington DC)
IFC’S GLOBAL REACH
● IFC HQ / Hub Offices
● IFC Country Offices
● Johannesburg
● Nairobi
● Hong
Kong
● New Delhi
● Almaty
● Moscow
● Paris
● Istanbul● Tbilisi
● Cairo
● Dakar
● Sao Paulo
● Buenos Aires
● Santo Domingo
● Mexico City
● Washington DC
IFC: WORKING IN EMERGING MARKETS SINCE 1956
5
• IFC is the largest global development
institution focused exclusively
on the private sector in developing
countries
• AAA-rated by S&P and Moody’s;
owned by 184 countries
• Provides investment, advice,
resource mobilization
• Present in nearly 80 countries
• Promoter of environmental, social, and
corporate governance standards
• Resources and know-how of a global
development bank with the flexibility of
a merchant bank
FY 20161 Committed Portfolio By Industry:
IFC: WORKING IN EMERGING MARKETS SINCE 1956
6
FY 20161 Committed Portfolio By Region:
LAC, 23%
Europe and Central Asia, 18%
Sub-Saharan Africa, 16%
East Asia and the Pacific, 15%
South Asia, 13%
MENA, 11%
World, 4%
Total Portfolio: $51.9 Billion Total Portfolio: $51.9 Billion
Financial Markets, 31%
Infrastructure,20%
Manufacturing,10%
Consumer & Social Services,
8%
Funds, 8%
Agribusiness & Forestry, 7%
Trade Finance, 6%
Oil, Gas & Mining, 5%Telecom & IT, 4%
1 FY ended June 2016.
IFC: INTEGRATED SOLUTIONS FOR INCREASED IMPACT
Wholly-owned subsidiary
of IFC
Private equity fund
manager – 11 funds
Invests third-party capital
alongside IFC
Firm-level advice
PPP transaction advice
In partnership with the
World Bank, advice on
broader market
development and
enabling environment for
private sector
Loans
Equity
Trade finance
Syndications
Securitized finance
Risk management
Blended finance
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ASSET
MANAGEMENT
COMPANY
$8.9 Billion Assets Under
Management (FY16)
INVESTMENT
$51.9 Billion Committed
Portfolio (FY16)
ADVISORY
$1.3 Billion Portfolio
(FY16)
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LOANS Project and corporate financing
On-lending through intermediary institutions
EQUITY Direct equity investments (up to 20% of company’s equity)
Private equity funds
TRADE FINANCE
AND SUPPLY CHAIN
Guarantee of trade-related payment obligations of approved
financial institutions
SYNDICATIONS Capital mobilization to serve developmental needs
Over 60 co-financiers: commercial banks, fund, and DFIs
RISK MANAGEMENT
SERVICES
Derivative products to hedge interest rate, currency, or
commodity-price exposures of IFC clients
INVESTMENT TYPES
IFC’s Role in Global Mining
FINANCING & SUSTAINABILITY EXPERTISE UNDER ONE ROOF
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IFC’s brings together a global outlook and a social / environmental mandate to deliver sustainable
business solutions; Teams include finance professionals, mining engineers, environmental
specialists, development experts, and communications specialists.
Investment Services Advisory Services AMC Parallel Equity Funding
• Equity
• Quasi-equity
• Loans
• Capital markets access and
mobilization
• Risk management
• Supplier development (linkages)
• Community Development
• Municipal Capacity Building
• World-class environmental and social
advice
• Resettlement & Indigenous Peoples
• Access to Community Development
Funding
• Large Equity Tickets
• Shorter Timeframe
• Similar or Same Terms
• Invests third-party capital alongside IFC
• No Additional Due Diligence
IFC Mining
Integrated Solutions Combining Capital and Expertise
One Stop Shop For Full Range Of Financing Instruments
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› Subordinated loans
› Income participating loans
› Convertibles, preferred shares, other hybrids
› Private placement in listed equities
› Private equity
› Typically 5-20% shareholding
› Long-term investor (typically 6-8 year holding period)
› Not just financial investor, adding to shareholder value
› Corporate loans
› Reserve based lending
› Partial credit guarantees for bonds
› Long-term project finance – Greenfield,
Expansion
› Mobilization of funds from lenders/investors,
(syndications, underwritings, guarantees)
EQUITY
MEZZANINE / QUASI EQUITY
SENIOR DEBT &
EQUIVALENTS
› Fixed and
floating
rates
› Local
currencies
› Up to 15-
year
maturity
LONG TERM COMPETITIVE FINANCING
Capital Mobilization: IFC works with clients to find financing solutions beyond its own account
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IFC AFRICAN, LATIN
AMERICAN &
CARIBBEAN FUND
Co-invests with IFC in equity and equity-related investments across a range of sectors
in Sub-Saharan Africa, Latin America, and the Caribbean
IFC GLOBAL
INFRASTRUCTURE FUND
Co-invests with IFC in equity-related investments in the infrastructure sector in
emerging markets
IFC ASSET MANAGEMENT COMPANY
SYNDICATED LOANS
MANAGEMENT
Mobilizes funds through: (i) Syndicated "B" Loans, mainly through commercial banks,
(ii) Coordinated and/or syndicated parallel loans, and (iii) A Loan Participations (ALPs)
IFC‘S SYNDICATED LOANS & MANAGEMENT DEPARTMENT
MANAGED CO-LENDING
PORTFOLIO PROGRAM
Allows institutional investors, which provide capital on a portfolio basis, to passively
participate in IFC’s future loan portfolio. Through its State Administration for Foreign
Exchange, the People’s Bank of China has committed $3 billion in the next 6 years
SOVERIGN WEALTH
FUNDS / NATIONAL
INVESTMENT COMPANIES
IFC works closely with Temasek, a national investment company in Singapore, and
other investment funds globally to mobilize additional capital for our clients
OTHER FINANCING PARTNERS
ACCESS TO MULTIPLE SOURCES OF CAPITAL
IFC INVESTS ACROSS ALL STAGES OF DEVELOPMENT
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10 - 20 years1
Debt
Exploration Definition PFS BFS Financing Construction Operation Expansion
Exploration Pre-Development Development Production
Expecte
d R
etu
rn (
%)
Time (Years)
Mezzanine
Equity
1. Indicative time range. The length of the period between exploration and construction will depend on
several factors such as the project’s size, quality of the asset, sponsor and location.
IFC PROJECT CYCLE
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Concept Review
• Client needs determined
• Contribution of project to development assessed
• Project screened for potential problems
• Site visit
• Mandate letter
Due Diligence
• Assessment of business potential, risks,
opportunities
• Evaluation of financial and economic soundness
• Compliance with IFC’s social and environmental
performance standards reviewed
Investment Committee & Negotiation
• Internal review and approval by internal committee
based on preliminary terms
• Conditions of disbursement and covenants,
performance and monitoring requirements, and
action plan agreed
Disclosure
• Environmental and social information disclosed
• Opportunity for public comment
Internal Approvals & Commitment
• Board consideration
• Board approval
• Legal review
• Signing of legal documents
Disbursement
• Loan disbursed on agreed schedule, according to
negotiated terms and conditions
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Long-Term
Partner Role
Stamp of
Approval
Financing
Not Readily
Available
Elsewhere
Worldwide
Presence
Global
Expertise and
Knowledge
Affiliation
with the
World Bank
Group
Ability to
Mobilize
Additional
Funds
Pricing
WHAT CLIENTS VALUE ABOUT IFC
IFC Mining Track Record and
Selected Investments
By Commodity By Region
IFC MINING COMMITTED PORTFOLIO (as of December 31, 2016)
1. Equity represented 27% of IFC Mining committed portfolio on a book value basis..
29 projects in over 20 countries
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Committed Portfolio: US$924 Million
Copper, 48%
Iron Ore, 20%
Bauxite and Tin,
15%
Diamonds, 11%
Gold, 4%
Industrial Ores & Other Metals, 1%
Sub-Saharan Africa,
55%
East Asia and the Pacific,
43%
LAC, 1%Europe and
Central Asia, MENA, 1%
Financing Providers $MM %
IFC A Loan (15 years) 400 9.1%
IFC B Loan (12 years) 821 18.6%
MIGA-Covered Tranche (12 years) 699 15.9%
IFC & MIGA (Total) 1,919 43.6%
EBRD A & B Loans (15/12 years) 1,221 27.7%
EDC (14 years) 750 17.0%
EFIC (14 years) 150 3.4%
U.S. ExIm (13 years) 367 8.3%
Total Debt Financing 4,407 100.0%
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OYU TOLGOI
Summary Overview IFC Value-Add
Company: Oyu Tolgoi LLC (“OT”) is the project company that
operates the world-class Oyu Tolgoi copper-gold mine in
Mongolia’s South Gobi region. The project area holds one of the
largest undeveloped high-grade copper deposits in the world.
Open pit operations commenced in 2012 and OT has since
shipped over 1.5 million tonnes of concentrate.
Sponsors: OT is 66% owned by Turquoise Hill Resources
(“TRQ”; a publicly-listed Canadian mining company) and 34%
owned by the Government of Mongolia. TRQ, in turn, is majority
owned by Rio Tinto, who also manages operations at OT.
Project: OT is currently undertaking development of an
underground mine (over 80% of the Oyu Tolgoi project’s value
resides in the underground deposit). Mining will be achieved via
block-caving, which will require over 200 km of tunnels and 10 km
of conveyors. Total project costs, including sunk costs to date,
are estimated at $23 billion and completion is expected in 2025.
IFC & EBRD co-led a $4.4 billion debt financing to fund
development of the underground mine, with IFC investing $400
million for its own account.
IFC mobilized a further $1.5 billion from commercial banks
through the combination of an IFC B Loan ($821 million) and
MIGA-covered tranche ($699 million).
o IFC & MIGA share due diligence and collaborate to
streamline internal deal processing.
Coordinated lenders’ due diligence on environmental & social
matters, which included complex biodiversity and water risks.
IFC Advisory Services provided strategic advice to Rio Tinto on
community investment and stakeholder engagement programs.
Remained committed to the project throughout 6 years of
ownership change, renegotiations, and market fluctuations.
Financing Structure Key Terms
Project financing structure supported by a completion guarantee
from Rio Tinto.
Lower interest rate during pre-completion period to reflect credit
quality of parent organization providing completion guarantee.
12-year longstop date on project completion allows for debt
financing of highly-complex underground block caving operation.
Combination of 12-15 year tenors with 5-year grace periods and
sculpted repayment schedules to match cash flow profile of
underground development.
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COMPAGNIE DES BAUXITES DE GUINEE (CBG)
Summary Overview IFC Value-Add
Company: CBG has operated the world-class Sangaredi bauxite
deposit in northwest Guinea since production began in 1973.
Bauxite ore is mined using conventional methods and then
transported via a 135-kilometer railway to the company’s
processing plant and port facilities at Kamsar, from which it is
shipped to overseas refineries. In 2015, CBG produced
approximately 15 million tonnes of bauxite, ranking Sangaredi as
one of the five largest bauxite mines in the world.
Sponsors: CBG is 51% owned by a consortium of alumina /
aluminium producers (Alcoa, Rio Tinto, and Dadco), with the
remaining 49% owned by the Government of Guinea.
Project: CBG sought to expand its mine, processing plant, and
associated infrastructure so as to increase nameplate production
capacity from 13.5 to 18.5 Mtpa. Final project costs, including
transaction fees and expenses, amounted to $712 million.
IFC anchored the term loan facility by providing $200 million of
15-year financing, the longest-ever debt financing in Guinea.
Led lenders’ environmental & social due diligence efforts on a
highly-complex project involving high-value biodiversity areas
(Tier 1 critical habitat) and physical resettlement.
o Also coordinating negotiations regarding an “aggregate
offset” to allow for multiple mining projects to jointly fund
West African chimpanzee preservation efforts.
Serving as honest broker between CBG, the Government of
Guinea, Guinea Alumina Corporation, and RUSAL regarding the
first shared-use / multi-user infrastructure corridor in Guinea.
Political risk mitigation provided by IFC’s long-standing
relationship with the Government of Guinea and extensive
presence in-country.
Financing Structure Key Terms
Corporate financing underpinned by (i) long-term, take-or-pay
contracts with CBG’s shareholders and (ii) an extensive resource
base (>30% reserve tail and 100+ years of MI&I resources).
International commercial banks participated via a tranche
covered by an Untied Loan Guarantee of the Federal Republic of
Germany (“UFK”; requires German content – sized according to
Dadco bauxite offtake contract).
15-year tenor with 3-year grace period followed by sculpted
quarterly principal repayments
Funding Sources $MM %
IFC 200 28.1%
OPIC 150 21.1%
UFK-Covered Tranche 293 41.2%
Term Loan (15-year) 643 90.3%
Local Bank Tranche (5-year) 15 2.1%
Internal Cash Flow 54 7.6%
Total Sources 712 100.0%
AHAFO (GHANA) AND GUYANA GOLDFIELDS (GUYANA)
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Project Ahafo (Ghana)
Investment $75 million Senior Term Loan, $10 million Syndicated Loan (2006)
IFC Role • IFC’s social and environmental specialists supported a complex resettlement
process that affected close to 10,000 people.
• IFC’s Advisory Services helped increase the number of women working at
the mine and designed a supplier program enabling entrepreneurs to deliver
goods and services to Newmont.
Project Guyana Goldfields (Guyana)
Investment $26 million Equity (2006-2013), $45 million Senior Term Loan & $140 million
Arranged Term Loan (2014)
IFC Role • IFC has invested a total of $26 million in equity since March 2006, supporting
the development of the Aurora Project from exploration to construction stage.
In 2014, IFC closed a $45 million senior term loan and arranged a $140
million senior term loan for the construction of the Aurora Project.
• IFC’s Advisory Services is assisting the Company in designing a local
supplier development program to increase the opportunities for local
businesses to compete for contracts during the construction phase and
operations.
• Previously, IFC supported the creation of an outreach program in the Aranka
River basin to improve health and environmental conditions for workers and
artisanal miners.
SELECT IFC MINING INVESTMENTS: AFRICA
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Dugbe$4,750,000
Equity
2012
Liberia
Samapleu Nickel$3,700,000
Equity
2011, 2013, 2014
Cote D’Ivoire
New Liberty$19,300,000
Equity
2014, 2015
Liberia
Simandou$185,000,000
Equity
2006, 2012
Guinea
Kiaka Gold$6,600,000
Equity
2010
Burkina Faso
Ahafo$85,000,000
Term Loans
2006
Ghana
Tsodilo$6,600,000
Equity
2010, 2012
Botswana
Hernic Ferrochrome$33,400,000
Loan, Guarantee, Equity
2006
South Africa
Lonmin$160,000,000
Term Loan & Equity
2007-2009, 2012
South Africa
Banfora$9,000,000
Equity
2009-2012
Burkina Faso
Finsch$25,000,000
Revolver
2012
South Africa
Achmmach Tin$10,100,000
Equity
2010, 2012, 2014
Morocco
Cullinan$30,000,000
Senior Secured Notes
2015
South Africa
New Africa Mining Fund
$29,000,000
Equity
2006, 2010
Africa Region
Ngualla$4,350,000
Equity
2015
Tanzania
Williamson$49,600,000
Term Loan & Equity
2010, 2012-2014
Tanzania
Tete$9,130,000
Equity
2008, 2011-2014
Mozambique
Mozal$145,000,000
Senior & Sub. Loans
1998, 2002
Mozambique
Yaramoko$22,200,000
Equity
2015
Burkina Faso
Kipoi$45,500,000
Term Loan & Equity
2015
Democratic Republic of Congo
CBG$200,000,000
Term Loans
2016
Guinea
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SELECT IFC MINING INVESTMENTS: LATIN AMERICA
La India$5,978,000
Equity
2014
Nicaragua
Angostura$15,400,000
Equity
2009
Colombia
Minera Quellaveco$59,700,000
Equity
1993-2012
Peru
Yanacocha$126,000,000
Equity & Term Loans
1993, 1999
Peru
Antares Minerals$18,400,000
Equity
2009, 2010
Peru
Minera Loma de Niquel
$124,500,000
Equity & Loans
1998, 2000
Venezuela
Aurora$185,000,000
Term Loans
2014
Guyana
Aurora$26,100,000
Equity
2006, 2009-2011, 2013
Guyana
Borborema$3,700,000
Equity
2014
Brazil
Marlin / Montana$45,000,000
Term Loan
2004
Guatemala
Lamine, La Miel
& Grand Bois
$6,000,000
Equity
2010
Haiti
Escondida Copper$134,600,000
Equity & Loans
1989, 1999, 2009
Chile
Ayawilca-Colquipucro
$4,848,000
Equity
2015
Peru
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SELECT IFC MINING INVESTMENTS: ASIA
Petropavlovsk
$30,000,000
Equity
2005, 2007
Russia
Bema Gold$39,400,000
Quasi-Equity & Loan
2005
Russia
Kumtor$10,000,000
Equity
2004
Kyrgyz Republic
Asian Lion Fund$6,000,000
Equity
2006
Asia Region
Sino Mining
$5,000,000
Quasi-Equity
2002
China
Far East Energy$15,000,000
Equity
2007
China
Gold Ridge$35,000,000
Term Loan
2010
Solomon Islands
Mindoro Resources$4,500,000
Equity
2010, 2012
Philippines
Amulsar$15,000,000
Equity
2007, 2009-2014
Armenia
Oyu Tolgoi$1,854,100,000
Loan & Mobilization
2015
Mongolia
Global Mining
Namrata Thapar Global Head Washington, DC +1.202.473.2021 [email protected]
David Poulter Principal Industry Specialist Washington, DC +1.202.458.1991 [email protected]
Steven Potter Principal Industry Specialist Washington, DC +1.202.458.2877 [email protected]
Sub-Saharan Africa
Ignacio de Calonje Chief Investment Officer London, UK +44.207.592.8414 [email protected]
Sacha Backes Senior Investment Officer Johannesburg, SA +1.27.11.731.3177 [email protected]
Stephan Vermaak Principal Investment Officer Johannesburg, SA +1 27.11.731.3243 [email protected]
Latin America
Aniruddha Roy Principal Investment Officer Washington, DC +1.202.473.2506 [email protected]
Juan Jose Rossel Senior Investment Officer Lima, Peru +511.611.2520 [email protected]
Strategic Engagements
Neil Pereira Principal Investment Officer Washington, DC +1.202.473.1024 [email protected]
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IFC MINING: GLOBAL COVERAGE
Annex
INFRASTRUCTURE & NATURAL RESOURCES
ADVISORY
OVERVIEWINFRASTRUCTURE & NATURAL RESOURCES ADVISORY
OVERVIEW
ADVISORY VISION & IMPACT
VISION
Help INR large footprint investments manage operational risks and preserve value.
Enhance shared benefits with local stakeholders.
Socialize and foster buy-in around new infrastructure ideas and processes.
Grow Upstream
Markets
Develop New
Business
Increase Portfolio
ProfitabilityAchieve Development
Impact
• Sector-wide
interventions that
create investment
opportunities
• Convene through
leaders to incubate
new technologies
• Capacity building for
local governments
and communities
• New AS interventions
with focus on MTN and
equity
• Publications and
communications that
position IFC as a
partner of choice
• Convene and engage
potential INR
clients/partners
• Client support to
manage operational
risks
• Greater support to
portfolio clients
• Socialize new ideas
in infra to grow
franchise
• Enhance benefits in
move the needle
projects
• Work with clients to
increase development
impact
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IFC brings together world-class talent, a global outlook and a
social/environmental mandate to deliver sustainable business solutions.
IFC’s team includes financial professionals, petroleum engineers and gas specialists, development
& social performance experts, environmental specialists, stakeholder engagement
and communications practitioners.
INTEGRATED FINANCES & ADVISORY SERVICES
• Equity
• Quasi-equity
• Loans
• Capital markets access and mobilization
• Risk management
• Political risk cover
• Benefit sharing
• Strategic community investment
• Local content
• Local government revenue management
• Water stewardship
• Environmental, social, governance
Performance Standards & upstream advice
as needed
FINANCING ADVISORY & ESG SERVICES
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“Our projects are over
time and over budget.
The problems are mostly
above ground.”
“We spend millions on
local development but still
government and
communities don’t trust us.
People block
our roads, slow
production.”
“Infrastructure projects
we build for
communities lie
abandoned or we end
up having to take over
the government’s role.”
“Our community
programs have little
to do with our core
business.”
WHAT WE HEAR FROM OUR CLIENTS
ADVISORY NEEDS
“Social and
political concerns
about water are
increasing operational
risks.”
“We don‘t know how to
tell the story about the
good things we are
doing and the
partnerships we have.”
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Helps clients design local benefit sharing strategies that increase effectiveness of
community investments and build social license to operate. Tools like the Financial
Valuation of Sustainability help prioritize community interventions to maximize the
impact of the benefit sharing portfolio.
ADVISORY OFFERINGS
PROVIDING SOLUTIONS TO CLIENTS
REVENUE MANAGEMENT
WATER STEWARDSHIP
Assess holistic water risks and opportunities then establishes stakeholder
partnerships to collectively address social risks related to water.
BENEFIT SHARING & STRATEGIC COMMUNITY INVESTMENT
LOCAL CONTENT
Improves communities’ and governments’ capacity to manage fiscal benefits
linked to large investments from the private sector leading to improved services
and accountability.
Helps develop competitive local supply chains of clients and build capacity of local
enterprises for greater benefit sharing. We leverage in-house industry expertise to provide
financial solutions to local enterprises and improve the business enabling environment.
Icons 1-3 made by Gregor Cresnar from www.flaticon.com
Icon 4 made by Freepik from www.flaticon.com30
Cameroon
• Exxon Foundation FEDEC
Mongolia
• Oyu Tolgoi
Mozambique
• Sasol
• Portucel
• Mozlink
Guinea
• Rio Tinto
• CBG
• GAC
South Africa
• Lonmin
Peru
• Peru LNG
• SN Power
• Newmont
• BPZ
• MIM (municipal
capacity building)
• MRI Peru (municipal
royalty income)
• Rio Tinto
Brazil
• Constellation
• Anglo American
India
• Cairn
• JK Paper
Colombia
• Pacific Rubiales Energy
• EcoOro
• Royalty Mgmt &
Monitoring - Ecopetrol
Albania
• Banker’s Petroleum
Azerbaijan
• BP
Papua New Guinea
• Sector-wide
Laos
• Stora Enso
Indonesia
• Musim Mas
• SCI Plantations
Nicaragua
• Simplemente
Madera
Group
• Ecom
Mexico
• Mexico Wind Farms
Tanzania
• New Forest Company
Chad
• ExxonMobil
Washington, DC
Bogota
Lima
Dakar
Conakry
Accra
Johannesburg
Ulan Bator
Jakarta
INR Advisory Staff
Ghana
• Newmont
• ENI/Vitol
Georgia
• AGL Hydro
Zambia
• Copperbelt
Nigeria
• INTSOK – Fabrication sector
WHERE WE’VE IMPLEMENTED PROGRAMS
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ADVISORY KNOWLEDGE CREATION
• Projects and People: A Handbook for Addressing Project-Induced In-Migration
• The Art and Science of Benefit Sharing in the Natural Resource Sector
• Women in Mining: A Guide to Integrating Women into the Workforce
• Addressing Project Impacts on Fishing-Based Livelihoods: A Good Practice Handbook
• A Guide to Getting Started in Local Procurement: For companies seeking the benefits of linkages with local SMEs
• Working Together: How Large-Scale Miners Can Engage with Artisanal and Small-Scale Miners
• Changing the Game: Communications and Sustainability in the Mining Industry
• Managing Community Relations in the Palm Oil Sector
• Establishing Foundations to Deliver Community Investment
• Wharton Case Study: FV Tool in Ghana
• Strategic Community Investment: Handbook
• The Value of Water: A Framework for Understanding Water Valuation, Risk and Stewardship
• A Strategic Approach to Early Stakeholder Engagement
• Water, Mining, and Communities: Creating Shared Value Through Sustainable Water Management
VIEW ALL PUBLICATIONS ON WWW.COMMDEV.ORG
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ANNUAL IFC SUSTAINABILITY EXCHANGE
Flagship event drawing 350 global leaders from
the public, private and civil society sectors to
help clients benchmark their sustainability
approaches, network and build partnerships.
“IFC’s disciplined and balanced approach to
sustainability in natural resources, while recognizing
the importance of profitability, deserves to be widely
appreciated and implemented.”
- 2016 Sustainability Exchange Participant
WWW.COMMDEV.ORG
Curated repository on community and
sustainability issues related to extractive
industries, agribusiness, forestry, and core
infrastructure (e.g. hydropower).
• Select library of knowledge and tools
exemplifying best practices
• User briefcase to store documents from
across the site overtime
• 5,000 site visits per month
ADVISORY KNOWLEDGE DISSEMINATION
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RESPONSE TO CLIENT/INDUSTRY NEED
IFC’S MAIN ACTIVITIES
• Resettlement action plan
• Local supplier/development program
• Integration of women in mining
operations
• Alignment of various teams and
programs
• Financial Valuation Tool to calculate
return on community investments &
promote internal alignment
RESULTS
• 10,000 people successfully resettled
• On target to meet regulatory requirement of 10% procurement
from local firms, leading to 373 local businesses received
contracts
• 53 women-owned businesses incorporated into supply chain,
creating 176 additional jobs
• Company using of FV Tool to budget and prioritize community
development programs
• The Ahafo Development Foundation is delivering improved
services to the communities and are better aligned with
corporate objectives
• Manage social and environmental impacts of major greenfield gold mine
developed in remote, heavily populated area over a three-year period;
• Manage expectation of employment from local men and women;
• Consolidate various community development programs and ensure
alignment of the Ahafo Development Foundation’s activities with corporate
business objectives
NEWMONT AHAFO (GHANA)
Community Investment & Supplier Development
34
RESPONSE TO CLIENT/INDUSTRY NEED
• Improving water management and stakeholder engagement around shared
use of water
• Using the IFC facilitated roundtables to develop a voluntary code of practice
on water management
• Public education and awareness raising and strategic communications on
water resources management to build trust with local communities
IFC’s MAIN ACTIVITIES RESULTS TO DATE
• Surveyed the local population’s perception of the mining
industry’s impact on water and delivered 14 multi-
stakeholder workshops on key findings
• Voluntary code of practice signed by 8 mining companies to
promote the efficient and transparent use of water
• Improved company water management practices, e.g. 4
mining companies implementing community participatory
water monitoring and herder rehabilitation programs
• Raised local awareness through training more than 1000
community, government and industry stakeholders on water
quality monitoring, mining and groundwater systems
• Developed a communications and awareness raising
strategy for South Gobi mining industry
MINING, COMMUNITIES & WATER (MONGOLIA)
Water Stewardship
• Surveyed the local population's perception
of the mining industry's impact on water
and delivered 14 multi-stakeholder
workshops on key findings
• Convened quarterly roundtables to develop
an industry-led voluntary code of practice
on responsible water management
practices
• Designed curriculum on mining and
groundwater management to promote
awareness and temper rumor-driven
politics
• Developed a communications and
awareness raising strategy for South Gobi
mining industry
35
• Facing significant social opposition, SN Power needed IFC’s support
to improve its CSR strategy by:
• Benchmarking CSR international good practices
• Identifying strengths and areas for improvement
• Enhancing internal alignment across functions
IFC’S MAIN ACTIVITIES RESULTS
• Helped SN Power improve its CSR strategy by
identifying risks and opportunities, analyzing
its CSR portfolio and highlighting the
relevance of using indicators to monitor
initiatives
• Conveyed messages around the importance of
communications, effective grievance
mechanisms and internal alignment
• Design of a communications strategy
• Information sharing and periodic meetings on CSR
projects
• Internal alignment and integration
• Design of a CSR indicators framework
• Improving the value of CSR initiatives
RESPONSE TO CLIENT/INDUSTRY NEED
SN POWER (PERU)
Strategic Community Investment
36
RESPONSE TO CLIENT/INDUSTRY NEED
37
IFC’S MAIN ACTIVITIES
• Conducting strategy
sessions/workshops on site with
senior management, contractors and
social performance teams
• Helping the client develop an
enhanced worker demobilization plan
along with the contractors
• Developing a strategy and enhanced
plan for community investment aimed
at improving livelihoods for 1000-2000
families
• Helping design local content/supplier
development program and tourism
project
RESULTS
• Two year community investment (CI) plan with detailed
programs that will build livelihoods in the 20 villages around
AGL’s operations
• Senior management and board buy in for proposed CI plan
• Forming partnerships and fund raising for livelihood
programs
• Manage social risks and meet community expectations of jobs and
economic growth from the Hydropower project
• Help strengthen strategy for change management and
demobilization of the workforce post construction
AGL HYDROPOWER (GEORGIA)
Community Investment & Livelihood Programs
37
• IFC worked to design early stage engagement at the industry level
aimed at developing a coordinated strategy for addressing
common local level risks.
IFC’S MAIN ACTIVITIES RESULTS
• Site visits and company interviews
• Design of two industry roundtables to share
“best practices” and assess interest in
collective action
• Bringing in external expertise
• Two successful round-table discussion with senior
leadership of multiple wind developers
• Potential focus areas for collective action identified
• Concrete recommendations and proposal on
strengthening industry association. Most of the
recommendations approved by Board of Directors,
including: structure of membership fees, staffing,
and organizational restructuring
RESPONSE TO CLIENT/INDUSTRY NEED
WIND FARMS (MEXICO)
Strategic Community Investment
38
RESPONSE TO CLIENT/INDUSTRY NEED
• 38% of total population had unmet basic needs (32% in urban area 47% in
rural areas); below the regional average
• Living standards did not increase at the same pace of royalty income
• Health care coverage was almost the poorest in the region of Huila
• Misuse of royalty income and non compliance with the law
“This program has a great impact on the community. IFC, Ecopetrol and the National Planning
Department gave us the tools we needed to plan and elaborate projects, to define budgets, make
contracts and undertake audits.”
-Luis Felipe Conde, Mayor of Aipe
IFC’S MAIN ACTIVITIES
• Implementation of municipal
investment good practices
• Strengthened Civil Society
Organizations to monitor the
effective use of royalties
RESULTS
• Municipality designed and implemented a US$2m project called
“Student Transport” to benefit 838 children without access to
adequate transportation (mainly rural population)
• School absenteeism and drop-out rates were reduced
• Additional improvements included investing royalties in health
care, water and sanitation projects
• $23M additional volume of extractive industries royalties
allocated to 35 local governments (incl. indigenous communities)
for investments in infrastructure, productivity, housing, ect.
ECOPETROL (AIPE MUNICIPALITY, COLOMBIA)
Revenue Management
39
RESPONSE TO CLIENT/INDUSTRY NEED
40
IFC’S MAIN ACTIVITIES
• Strategic and technical assistance to
Simandou project and mining sector
• Skills development and capacity building for
local SMEs
• Donor coordination
• Access to finance (leasing microfinance)
• Improve investment climate/ legislation w
WBG
• Advise on Rio’s Guinea Foundation design
• Support Ebola response and post Ebola
recovery development programs
• Women entrepreneurship and development
2008 – 2016 RESULTS• Inclusion of local content annex in the investment framework
• Development of a local content policy for the Simandou project and
extractive national level
• Creation of a training platform for local SMEs & 1000+ local SMEs
received advisory services (diagnostic, trained and coached)
• 3,500+ participants trained in business management, HR, quality,
marketing, health & safety including Ebola safety, leasing, etc.
• $12M+ in new supplier contracts & over 1000 new jobs in local mining
supply chain businesses
• Enterprise Center created & Guinea public-private dialogue platform now
up and running
• Support to Ebola Response and Post- Ebola Recovery plans
• One-Stop-Shops for permits and licenses in mining created & Business
registration time decreased on average from 40 to 3 days
• New reforms: Leasing law, Investment code, VAT reimbursement
process in place for local companies, etc.
• Launch of the national Responsible Mineral Initiative Development
(RMDI) and national dialogue around Biodiversity
In response to government requirements and community expectations, Rio Tinto
requested support in creation of a local procurement policy and strategy to
develop businesses capable of competing for contracts.
RIO TINTO SIMANDOU (GUINEA)
Local Content & Community Investment
40
Veronica
Nyhan Jones
(Head)
Gosia
Nowakowska-
Miller
Adriana
Eftimie
Sunrita
SarkarMaria
Arsenova
Anna
Vorotniak
Liane
Asta Lohde
Halah
Al-Jubeir
Nadja Kunz
Switzerland
Fatoumata
Binta Keita
Guinea
Brigid
Commey
Ghana
Rodrigue
Djahlin
Senegal
Saramory Kampo
Guinea
Stephanie
Sines
Guinea
Alex Burger
South Africa
Sherry
Goldber
g
ADVISORY TEAM
GLOBAL
Toniqua
Hay
GLOBAL: Veronica Nyhan Jones | Washington, DC | [email protected]
ASIA: Arjun Bhalla | Jakarta, Indonesia | [email protected]
AFRICA: Rodrigue Djahlin | Dakar, Senegal | [email protected]
LATIN AMERICA & CARIBBEAN: Fernando Ruiz-Mier | Lima, Peru | [email protected]
Valerie Prassl
Austria
EUROPE ASIA
Fernando Ruiz
PeruAmanda Diaz
ColombiaCarla Toledo
Peru
Karla Diaz
Peru
Arjun Bhalla
Indonesia
Enkhbileg Enkhjargal
Mongolia
LATIN AMERICA AFRICA
41
