Investment insurance: ONDD’s cover possibilities and country policy
12
Investment insurance: ONDD’s cover possibilities and country policy Opportunities for companies to engage in public private partnerships (PPPs) in Southeast Europe and the CIS Brussels, June 27 th , 2007 Lieven Dupon & Christoph Witte, ONDD
-
Upload
donnelly-davis -
Category
Documents
-
view
40 -
download
0
description
Investment insurance: ONDD’s cover possibilities and country policy. Opportunities for companies to engage in public private partnerships (PPPs) in Southeast Europe and the CIS Brussels, June 27 th , 2007 Lieven Dupon & Christoph Witte, ONDD. INVESTOR LOCAL COMPANY BANKS. - PowerPoint PPT Presentation
Transcript of Investment insurance: ONDD’s cover possibilities and country policy
Investment insurance: ONDD’s cover
possibilities and country policy
Opportunities for companies to engage in public private partnerships (PPPs) in Southeast Europe and the CIS
Brussels, June 27th, 2007
Lieven Dupon & Christoph Witte, ONDD
04/19/23L. Dupon & C. Witte - 2
INVESTOR LOCAL COMPANY
BANKS
shareholders loans
equity
bank loans
04/19/23L. Dupon & C. Witte - 3
INSURANCE COVER
► Expropriation / government action
► War
► Transfer
SCOPE OF COVER
► Equity: net book value + profits
► Loans: principal + interests
04/19/23L. Dupon & C. Witte - 4
POSSIBLE ISSUES
► Partner risk:
not covered, but what if your JV partner is a government entity?
► Valuation:
what if the book value does not reflect the acquisition/market value of the local company?
04/19/23L. Dupon & C. Witte - 5
The global picture : - investment
- related exports for capex
- sales in the domestic market
INVESTOR LOCAL COMPANY
EXPORTERS
DOMESTIC MARKET
investment
sales
exports
incl. export
credits
04/19/23L. Dupon & C. Witte - 6
INSURANCE SOLUTIONS FOR :
► the investor : equity/debt political risk cover
► the exporters : export credit insurance (suppliers or buyers credit) providing comprehensive cover (political + commercial risks)
► the local company : multi-buyer insurance policy in respect of sales on the domestic market
04/19/23L. Dupon & C. Witte - 7
Evaluating political risks: methodologyWar risk War risk
External conflict Political violence
Internal conflict
Socio-economic conflict
Racial and ethnic tensions
Civil war Terrorism Civil disorder
04/19/23L. Dupon & C. Witte - 8
Evaluating political risks: methodology (2)Risk of expropriation
and government actionGovernment risk
Expropriation and contract repudiation
Negative attitude change
War risk
Importance of foreign investment
Religious tensions
Bilateral investment agreement
Deficient legal system
Quality and enforcement
of laws
04/19/23L. Dupon & C. Witte - 9
Evaluating political risks: methodology (3)Transfer risk: classification based on the country’s
- external debt burden
- external liquidity
- growth potential
- policy performance
- vulnerability to external shocks
- political situation
Result: classification on a scale from 1 (lowest risk) to 7
04/19/23L. Dupon & C. Witte - 10
Evaluating political risks: CIS classifications
Transfer risk War risk Expropriation risk
Russia 3 3 4
Ukraine 5 2 3
Belarus 6 4 6
Armenia 5 3 3
Georgia 6 3 4
Moldova 6 3 3
04/19/23L. Dupon & C. Witte - 11
Evaluating political risks: SEE classifications
Transfer risk War risk Expropriation risk
Albania 5 2 3
Bosnia & Herzegovina 6 3 4
Macedonia 5 3 3
Serbia 6 3 4
Turkey 4 2 2
04/19/23L. Dupon & C. Witte - 12
ConclusionSeize the opportunity…
…but manage the risks!
ONDD is there to support you.
www.ondd.be
Lieven Dupon Christoph Witte
Tel. +32 2 788 8768 Tel. +32 2 788 8746
