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Mobilizing Institutional Investment in AfricaStockholm, 22th October 2014
Changing the Game for Africa
This confidential presentation (this “Presentation”) is being provided to prospective investors for information purposes only and is not intended to be, and prospective investors must not take it to be, the sole basis for an investment decision. The information set forth in this Presentation is given in summary form and does not purport to be complete. Prospective investors should not construe the contents of this Presentation to be investment, legal or tax advice. This Presentation has been furnished on a strictly confidential basis for the information of the person to whom it has been delivered and each such person, by accepting delivery of this Presentation, agrees not to divulge the contents hereof to any third party. Each person accepting this document hereby agrees to return it to the African Development Bank (“AfDB”) promptly following any request by the AfDB.
The market analysis and projections presented in this Presentation represent the subjective views of the AfDB. Current estimates of Africa50’s future performance are based on a number of assumptions that AfDB believes are reasonable, but there can be no assurance that such estimates are correct or that Africa50’s investment objectives will be achieved. The projections included herein have been provided to assist prospective investors in evaluating an investment in Africa50, but should not be relied upon as a representation of future financial results. The information supplied herein is for illustrative purposes only and is not necessarily indicative of future results of Africa50 or its investments. Before acting on any information contained in this Presentation you should consider the appropriateness of the information having regard to these matters, any relevant offering document and in particular, you should seek independent financial advice.
Important Notice
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Track Record of AfDBPrivate Sector Infrastructure Investments
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Facilitated USD 32 billion worth of PPP and Private Sector Projects
Acted as Mandated Lead Arranger on 10 Projects
49 projects delivered
USD 3.1 billion invested
USD 4.6 billion syndicated
PPP or Private Infrastructure Investments between 2006 and 2014
ADB takes the lead role in: …for a wide range of responsibilities… …to ensure that the
transaction is:
Project structuring
Early involvement to contribute to project preparation
As needed, bring in new partners Ensure quality and fairness of project contracts
Bankable and sustainable…
Project coordination
Assist Project Sponsors in coordinating all parties Work “behind the scene” to resolve problems Leverage on strategic partnership with
Governments
…Continuously moving forward…
Project financing
Play a lead role in the due diligence processes Mobilise and coordinate debt (and equity)
financing Coordinate preparation of financing
documentation
…Fully financed
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Driving the transaction to Financial Close
Not just a financierLeading the way from beginning to end
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US$2.0
trillion
1.1 billion
38%
US$1tr
US$5.5 trillion
2.4 billion
60%
US$ 4.75tr
Collective GDP in 2013
Africa’s Population 2013
Population in Urban Areas 2013
Consumer Spending 2013
Collective GDP in 2050
Africa’s Population
2050
PopulationIn Urban
Areas 2050
Consumer Spending 2050
Africa is on the MoveEmerging as an Economic Success Story
Today Tomorrow
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Innovative Solution
African Infrastructure MarketMarket Opportunity
Africa50
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African Infrastructure MarketWhat is needed?
Size of funding requirement to finance
PIDA and Project Development
PIDA Total Financing Required
$68 billionDevelopment Capital
Required
$2.5 billion per annum for 5 years
PPF
$80 m
Project DevelopmentCompany
Providing steady deal flow of well-structured
Projects
Project FinanceCompany
Sound investments generating commercial
returns
Africa50 will operate across the project life cycle through two separate companies each with
dedicated investor groups
What is Africa50?A “One-Stop-Shop” Approach
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What is Africa50?A Capital Base at Sufficient Scale
Paid-in Capital of $3billion
Single “A” rating target
Leverage 2-3 times capital reaching up to $10billion
Project Development Capital of $500m
INFRASTRUCTURE INVESTMENT OPPORTUNITY
$100 Billion9
A Corporation - Commercial Structure
Autonomous - Own Rules & Procedures
Independent - Legally & Financially Independent
Capital Structure - A, B & C Shares
A TRUE PUBLIC PRIVATE PARTNERSHIP
What is Africa50?A New DNA, Flexible and Efficient
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Commercial AttractivenessLong Term and Robust Returns
• Close end fund structure with a 10-year lifespan
• Failure rate at 30% with stop loss mechanism
• Strong returns from successful projects
• Investor IRR of 15-16%
Project Development Business Line
• Open-end structure• Bridge financing and senior debt
as the two main instruments• Project selection as an essential
success factor• Investor ROE of 8% over a 15-year
period
Project Finance Business Line
TRIPLE BOTTOM LINEFinancial Return & Development Impact
Business Opportunities
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AFRICAN GOVERNMENTSInitial Expressions of Interest
USD650 million
Project DevelopmentCompany
Seed investment of USD100 million over
3 to 4 years
Project Finance Company
Seed Investment of up to USD500 million
in tranches
African Development Bank Cornerstone Investor
Accelerated ImplementationStrong African Commitment
Nomination & Compensation Committee
CEO
Africa50 Shareholders
Board of DirectorsBoard Committees
Investment Committee
Portfolio Management Committee
Risk and Compliance Management Committee
Executive Committees
Management TeamAudit & Risk Committee
New Investment Committee
How is Africa50 Governed?Corporate Structure
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SELECTION CRITERIA
433 projects in PIDA-PAP
294 active
83 at concept
stage
13 short-term opportunities
PROJECT SCREENING
Taking Projects from Feasibility to Bankable and Operations
Economical viable, E&S sustainable
Commercially viable
Regional & national
transformational projects
A Robust PipelineSolid framework for Project Selection and Screening
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A Robust PipelineTransforming Africa
8 projects USD1 billion USD15 billion Project Value Investing Facilitating
2014 -2015:
21 projects USD3 billion USD47 billionProject Value Investing Facilitating
2016 -2020:
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AN ATTRACTIVE ASSET CLASS
Secured cash flows backed by contractual agreements
Long term investment horizons
Responsible investments for institutional investorsHistorically, well-structured projects have generated
returns of 16-18% IRR in Africa
African Infrastructure MarketRobust, Safe and Steady Returns
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African Infrastructure MarketLow Default Rates
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Africa 138 1 0.7% 1 0.7%
