SACE – Driving your ambitionsSperan ţa Tirsar, Head of Bucharest Office - Central and Eas tern Europe Annalisa Ricci, Senior Underwriter

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SACE’s mission

• SACE is the Export Credit Agency of ITALY

• We do not provide direct lending ...

• We provide guarantees and insurance policies for non-payment risk, inorder to support financing from banks or from suppliers

... in case of acquisitions of Italian equipments and services

... in case of investments made by Italian companies outside Italy

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Company profile and history

Factoring and discounting of creditwith the public sector

Short-term credit insurance, suretiesand construction risks

Data acquisition and credit recovery

Export credit, credit insurance,investment protection, sureties,reinsurance, financial guarantees,project & structured finance

Company Profile – SACE Group

SACE, the Italian Export Credit Agency, is a joint stock company whose ultimate shareholders are the Italian Government and major Italian bank foundations. The Group provides export credit insurance, investment protection, financial guarantees, sureties and other financial solutions best suited for projects and initiatives involving Italian partners or related supplies from Italy and covers risks in more than 180 countries.

SACE’s mission is to promote Italian exports and investments, to support the internationalization of the Italian economy as well as projects of strategic importance for the Country.

Establishment of SACE as public entity

SACE enters the short-term credit insurance market through the establishment of SACE BT

SACE is transformed into a

joint stock company, whose

capital is wholly owned by MEF

SACE BT creates SACE SRV, specialised in business information and recovery solutions

SACE BT enters the factoring market through SACE Fctsubsidiary

SACE is acquired by Cassa Depositie Prestiti (CDP)

SACE enters the surety market through the acquisition of ASSEDILE, which eventually merged in SACE BT

1977 2004 2005 2007 2010 2012 2014

Privatisation on the horizon

History

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SACE SpA: key facts and figures

We enjoy sizeable financial resources acting as a cushion to financial/economic shocks

Highlights (Year-end 2013 Results)

At the end of 2013 the portfolio of transactions insured (outstandingcommitments) amounted to € 34.5 billion, with an increase in exposuretowards emerging markets (76% of total exposure, excluding Italy). SACE’sactivity is mainly concentrated in Oil & Gas, Infrastructure andConstruction, Shipbuilding, Chemical and Petrochemical and Metal sectors.

New Guarantees

Outstanding Commitments

Gross Premiums

Net Profit

€ 8.4 Bn

€ 34.5 Bn

€ 316.4 Mn

€ 277.7 Mn

Shareholders’ Equity € 4.9 Bn

Rating (Fitch) A-

State counter-guarantee € 17 Bn1

Risk insured by Geographical Area & Sector

SACE’s Portfolio by Geographical Area (Year-end 2013

SACE’s Portfolio by Industrial Sector (Year-end 2013)

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SACE’s Outstanding Commitments: € 34.5 Bn

Russia and CIS17%

Italy29%

Other12%

MENA10%

Central and Eastern Europe6%

Asia Pacific6%

Brazil and South America5%Turkey and Near East5%

Mexico and Central America 4%

Sub Saharan Africa2%

India and South Asia4%

Oil & Gas , 23.0%

Infastructure&

Constructions, 15.4%

Shipping, 10.60%

Metallurgy, 21.4%

Other , 29.6%

SACE New Guarantees Issued by Product Total EUR 8.414,9 mln (year-end 2013)

SACE-International Network 6

Financial Guarantees; 3558,5; 43%

Surety bond; 604,7; 7%

Documentary Credit Confirmation; 191,6; 2%

Buyer Credit; 2276,4; 27%

Supplier Credit; 605,8; 7%

Internat. Financial Guarantees for SMEs;

301,7; 4%

Other; 8,7; 0%

Reinsurance BT ; 866,1; 10%

Financial Guarantees

Surety bond

Documentary Credit Confirmation

Buyer Credit

Supplier Credit

Internat. Financial Guarantees for SMEs

Other

Reinsurance BT

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SACE’s activity in Central and Eastern Europe

More than 90% of total SACE’s exposure towards Central and Eastern Europe is concentrated inonly five Countries. In particular, Bulgaria and Romania account for almost 50% of the total, withtotal outstanding commitments for € 536 and 497 million respectively.

In 2013 SACE concluded 28 new transactions in the Region for an aggregate value of € 57million. Around 62% of these transactions relate to Supplier Credit policies in favor of SMEs, foroperations in the Infrastructure, Metal, Machinery and Electric sectors.

Portfolio€ 2.1 Bn

New guarantees

€ 57 Mn

Pipeline€ 400 Mn

BulgariaRomaniaPolandCroatia

25%23%16%14%

Serbia 14%

Portfolio by Country (top five, %, year-end 2013)

PolandRomaniaSloveniaSerbia

44%32%11%11%

Montenegro 2%

New Guarantees by Country (top five, %, year-end 2013)

Supplier CreditBondsBuyer Credit

62%

30%8%

New Guarantees by Product(commitment, %, year-end 2013)

Supplier Credit

Structure

Target Clients

Main Features

Supplier Credit Policy is issued in favour of the Italian exporter and protects it against the non-payment risk by a foreign customer

Italian Companies and/or their Subsidiaries outside Italy exporting goods and services

• Buyer: public institutions and private companies • Risk: non-payment, due to political or commercial events• Coverage: max. 85% of the export amount

15% advance – a condition to obtain SACE cover• The exporter can cash in the export immediately by assigning SACE insurance policy + P/Notes to a financing institution

• Advantages for the exporter – gets new orders/ clients• Advantages for the importer – obtains longer payment terms and does not take bank loans

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Italian CompaniesForeignBuyers

Export of goods and services

Payment through Promissory Notes

Insurance policy

Italian subsidiary outside Italy

Case study: acquisistion of scaffoldingsfor Unispan Peru (Peru)

• Parties: • Unispan Peru / Peru (buyer)• Pilosio Spa (Italian exporter insured by SACE)

• Total investment value : EUR 842.000 • Amount insured by SACE : EUR 673.600 (80%)• Investment: acquisition of scaffoldings• Payment terms : 5.5 years• Payment instruments : promissory notes

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Buyer Credit

Structure

Target Clients

Main Features

Buyer Credit Policy is issued in favour of the bank and protects it against the credit risk –only in case the loan is used for acquisition of goods/ services/ construction services from Italian companies

Banks – local, international, Italian

• Buyer: public institutions and private companies • Risk: non-payment, due to political or commercial events• Coverage: max. 85% of the export amount

15% advance – a condition to obtain SACE cover

• Advantages for the exporter – gets new orders/ clients and gets paid immediately• Advantages for the importer – obtains longer tenors, decreases the collateral needed for the bank loan, gets cheaper financing, gets higher amounts• Advantage for the bank – decreases risks, 0% Risk Weighted Assets

Bank

Foreign Importer and

Borrower

Export of goods and services/ Construction or engineering works

Insurance policy

Italian Company

Payment

Loan

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• Parties: • Cerro del Aguila SA (buyer)

• Sumitomo Mitsui Banking Corporation (financing bank)

• Astaldi Spa (Italian exporter)

• Total value of the bank loan: USD 65 mln

• Amount insured by SACE : USD 65 mln (100% of the loan)

• Investment: construction of a hydroelectric power plant

• Loan tenor : 8.5 years

Case study – construction of a hydroelectric power plant for Cerro del Aguila SA (Peru)

Civil Works Policy

Structure

Target Clients

Main Features

Civil Works Policy is issued in favour of the Italian construction company and protects it against the non-payment risks

Italian construction companiesItalian engineering companies … and/or their Subsidiaries outside Italy

Risks covered: • non payment of credits, • failure to recover pre-shipment costs, • undue calling of bonds, • destruction/damage/requisition• confiscation of temporarily exported goods

Italian Companies Foreign

BuyersConstruction works or Plant engineering projects

Payment on milestones

Insurance policy

Italian subsidiary

outside Italy

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• Parties: • Transportation Project Board (buyer)

• Piacentini Costruzioni Spa (Italian exporter)

• Total value of the contract: EUR 37 mln

• Amount insured by SACE: EUR 13.7 mln

• Investment: expansion of the port of Zawara in Libya

• Tenor: 16 months

Case study – expansion of the port of Zawarafor Transportation Project Board (Libya)

Bonds for construction

Structure

Target Clients

Main Features

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SACE can counter-guarantee the banks issuing the contractual bonds or can even issue the bonds directly.

• Italian/ international/ local banks• Italian construction/ engineering companies … or their Subsidiaries outside Italy… or Joint Ventures of Italian contractors

Cover: up to 80% • Bid bonds• Performance bonds• Advance payment guarantee• Retention bond

BankForeign

Beneficiary

Construction works Counter-guarantee for bonds

Italian Contractor

Bonds issued by the Bank

Request for guarantee or counter-guarantee

Bonds issued directly by SACE

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• Parties :

• Contractor: JV Tirrena Scavi- Condotte- Cossi

• Beneficiary: Romanian National Company for Roads and Highways

• Counter-guarantees for:

• Performance bond

• Advance payment guarantee

• SACE guarantee - RON 158.8 million

Case study: bonds for the construction works at the highway Lugoj – Deva (Romania)

Financial Guarantees

Structure

SACE guarantees the financing for:• initial investment of Italian companies outside Italy (mergers, acquisitions, capital injection) • investments needs of Italian subsidiaries outside Italy • working capital needs of Italian subsidiaries outside Italy • loans granted by Italian banks to foreign banks with the scope of supporting Italian exports/ investments

Italian companies (large or SMEs) and their Subsidiaries outside ItalyItalian banks willing to internationalize

Cover: maximum 80%

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Bank

Counter-guaranteeItalian

Subsidiary outside Italy

Loan

Target Clients

Main Features

Case study – purchasing of stone materials for the realization of the campus Exxon (USA)

• Parties:• Banco Popolare

• Savema Spa (Italian company)

• Total value of the bank loan: EUR 1.2 million

• Amount insured by SACE : EUR 600k (50% of the loan)

• Investment: purchasing of stone materials for the realization of the campus Exxon (USA)

• Loan tenor : 1 year

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Political Risk Insurance

Structure

Insurance policy for political risks

Equity/ Loans

Insurance to protect the interest of Italian companies in companies outside Italy, againstpolitical risk

Italian companies/ banks with interest outside Italy

• Risk: losses of equity or shareholders loans, due to political events (e.g. nationalisation, confiscation of goods, embargo, civil disorder, transfer risk).• Coverage: up to 100%

Target Clients

Main Features

ItalianCompany

Investments in a company outside

Italy

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Case study – Political risk insurance for UniCredit Bank Serbia (Serbia)

• Parties: • Bank Austria (shareholder of UniCredit Bank Serbia JSC)

• UniCredit Bank Serbia JSC (subsidiary)

• Total value of the shareholder loan: EUR 40 million

• Amount insured by SACE : EUR 40 million (100% of the loan)

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Confirmation of Letters of Credit

Structure

Target Clients

Main Features

SACE covers the Italian bank against the risk of non payment of the L/C by the foreign bank

Italian banksForeign banks … involved in a documentary credit facility linked to an Italian export

• Risk: credit risk of the foreign bank (L/C issuing bank)• Nature of Risk: political and commercial• Coverage: up to a maximum of 100% of the L/C amount• Advantages: increasing banks’ volumes in L/C confirmation business

encouraging foreign banks to issue L/Cs for the benefit of Italian exporters

Italian Bank

ForeignCompany

Export of goods and services

Confirmation of L/C

ItalianCompany

Payment against documents

Foreign Bank

Issuance of Letter of Credit

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Request for L/C

Structured and Project Finance

Structure

Target Clients

Main Features

Large Italian companies, acting as Sponsors or involved in the EPC/ O&M/ Off-take contracts.

Very complex, large-value transactions, E.g. construction of industrial plants, power plants, infrastructure projects, telecommunication• Debtor: public institution or private company • Project assessment is based on the cash generating capacity of the project, not the balance sheet of the Sponsors

Bank syndicate

Special Purpose Vehicle EPC contract

Loan

Guarantee

Italian Company

Equity

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Sponsors

Italian Company

O&M contract

Italian Company

Off-take contract

Case study: Maritza East III Refinancing (Bulgaria)

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Parties: • SPV owned 73% by Enel (through its local subsidiary) 1 and 27% by Natsionalna

Electricheska Kompania (NEK), the Bulgarian national electricity utility• EPC Contractor: ENEL / RWE• O&M Operator: ENEL/NEK, through an operating company• Fuel Supply Provider (lignite): Mini Maritza Iztok Ead (MMI), state-owned company• Off- Taker: NEK

Project: the refurbishment of an existing 840 MW lignite-fired power plant, in order to increase operating efficiency of the plant and reduce emissions in accordance with World Bank environmental standards.

Total Project costs: EUR 832 Million.

Financing: 18 credit institutions including EBRD, Black Sea Trade Development Bank, MIGA, commercial banks.

SACE Facility : 50% of Total Project costs, refinancing existing facilities.

Tenor: 14-year repayment tenor (1 year less than the PPA contract)

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O&M AgreementO&M Co. owned by

ENEL (73%) +NEK (27%)15-year tenor

Maritza East III Power Company4 x 210 MW

-Enel Equity 73%- NEK Equity 27%

Bulgarian Government Letter of Supportfor NEK / MMI obligations under PPA and LSA

Waste Disposal Agreement

(MMI)

EPC Contract(ENEL/RWE)

Limestone Supply

Agreement

Lignite Supply Agreement

(MMI)

Case study: Maritza East III Refinancing (Bulgaria)

Power Purchase Agreement(NEK)

15-year Tenor

Debt Financing Support

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Transaction highlights - Infrastructure

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SACE’s International Network

SACE Offices operate as local regional hubs for maj or emerging/industrialised markets

MEXICO CITY | Mexico and Central America

BUCHAREST | Central and Eastern Europe

MOSCOW | Russia and CIS Countries

ISTANBUL | Turkey and Near East

HONG KONG | China and Asia Pacific

SAO PAULO | Brazil and South America MENA2| Middle East and North

Africa

JOHANNESBURG | Sub Saharan Africa

NAIROBI 1| East Africa

MUMBAI | India and South Asia

1) c/o African Trade Insurance Agency2) to be opened soon c/o Headquarters, Rome

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RomaPiazza Poli 37/42 - 00187 RomeTel. +39 06 67361 • Fax +39 06 6736225www.sace.it

RomaniaSperanta TirsarRoxana GhermanAnnalisa Ricci

Str. Icoanei nr. 15, etaj 3, sector 2, Bucuresti Tel. +40 21 2102183; +40 21 21 22 896E-mail s.tirsar@sace.it

r.gherman@sace.it annalisa.ricci@sace.itbucharest@sace.it

Contact data