This presentation was held during the 5th GIB Summit, May 27-28 2015. The presentation and more information on the Global Infrastructure Basel Foundation are available on www.gib-foundation.org

1. This presentation was
held during the 5th GIB
Summit, May 27-28 2015.
The presentation and
more information on the
Global Infrastructure Basel
Foundation are available
on www.gib-foundation.org
The next GIB Summit will take place in Basel,
May 24-25, 2016.
The information and views set out in this presenation are those of the author(s) and do not necessarily reflect the opinion of the Global
Infrastructure Basel Foundation. Neither the Global Infrastructure Basel Foundation nor any person acting on its behalf may be held responsible
for the use of the information contained therein.

2. Why
are
Sustainable
Infrastructure
Projects
so
difficult
to
structure?
Co-­‐hosted
by
the
Interna0onal
Ins0tute
for
Sustainable
Development
Oshani
Perera,
Director,
Public
Procurement
and
Infrastructure
Finance
David
Uzsoki,
Sustainable
Finance
Specialist
www.iisd.org
©2015
The
Interna0onal
Ins0tute
for
Sustainable
Development

3. Jan
van
Schoonhoven
Counsellor
in
Infrastructure
and
PPP
Sharing
Netherlands
and
EU
knowledge
on
PPP
Role:
Understand
to
role
of
governments
and
vica
versa
-­‐ Seconded
to
UNECE
(Manager
PPP
centre)
-­‐ Special
advisor
to
the
Minister
Infrastructure
of
the
Netherland
-­‐ Infrastructure
Team
World
Economic
Forum
-­‐ Advisor
for
World
Bank
(special
Africa)
-­‐ Board
Director
PPP
Centre
Kazakhstan
-­‐ Senior
Fellow
at
InternaKonal
InsKtute
for
Sustainable
Development
-­‐ Netherlands
PPP
projects
in
Asia
(Myanmar,
Bangladesh
etc.)
-­‐ Advisor
PPP
Suez
Channel

4. Understanding
Risk
form
a
government
perspecKve
LIGHT
BULB
VERSES
LED
BUSINESS
CASE
PRESENTED
BY
A
CONSORTIUM
THAT
DOESNOT
UNDERSTAND
THE
GOVERNEMENT
RETRUN
OF
INVESTMENT
IN
5
YEARS
REAL
LIFE
FOR
A
CIVIL
SERVANT
BUSINESS
CASE
PRESENTED
BY
A
CONSORTIUM
THAT
UNDERSTAND
THE
GOVERNEMENT
2020
LED
IS
DANGEROUS
FOR
CHILDEREN
AND
PREGNANT
WOMEN,
WAIST
IS
RADIO
ACTIVE
-­‐ IMMEDIATE
REPLACMENT
-­‐ BACK
TO
BULBS
-­‐ MILLIONS
GONE
-­‐ RETRUN
OF
INVESTMENT
IN
5
YEARS
-­‐
BUT
WILL
BE
RESPONSIBLE
FOR
THE
IMPLEMENTATION
AND
THE
AFTER
SALES
-­‐ TAKE
THE
RISKS
OF
MAILFUNCTION

5. 12.06.1512.06.15
Building Europe Together with Public Private Partnerships
5
C.R.E.A.M. Europe PPP Alliance
About Us
C.R.E.A.M. Europe PPP Alliance
Public Private Partnership Association
Avenue de l`Opale 1 Appart. 5
B – 1030 Brussels
MasterPPPlan Competence Centre
Duerrstrasse 1
D - 80992 Munich
www.cream-europe.eu
Dipl.-Ing. Zoran Jelic
EU Project Co-ordinator
z.jelic@cream-europe.eu

6. 12.06.1512.06.15
Building Europe Together with Public Private Partnerships
6
PPP=Complex Project Development
Comparison Plan vs Reality

9. 12 Juni 2015 9
Marcial Bustinduy
Principal Sustainable Transport Specialist

10. An intro to EBRD
European Bank for Reconstruction and Development
• IFI founded in 1991 to promote transition to
market economies in 35 countries
• Owned by 64 countries and two
intergovernmental institutions (AAA/Aaa rated)
• Largest single investor in the region:
In 2014, €8.9 billion invested in 377 projects
12 Juni 2015 10
• Principles: Transition Impact, Sound Banking,
Additionality
• Invests across all sectors: Infrastructure, ICA,
FI, Energy & Natural Resources, SME, etc.
• Tailored financial options with public and
private sector (incl. debt, equity, PPP, etc.)

11. EBRD approach to overcome barriers
• Development sound legal framework
• Capacity building/Institutional
Development
• Advice on deal structuring (eg.
Environmental risks, Procurement PP&R)
• DD: Mobilization of
experienced advisors
• Development of well
balanced contracts:
Public Service Contracts
• IPPF (Infrastructure
Project Preparation
Facility)
• Tailored financing
options, incl. debt/
equity:
- Sovereign
- Sub-sovereign
- PPP
• Long term maturities,
incl. local currency
debt
Financing
Technical
Cooperation
Policy
Dialogue
12 Juni 2015 11

12. Why
are
Sustainable
Infrastructure
Projects
so
difficult
to
structure?
Q
&
A
–
Round
1
www.iisd.org
©2015
The
Interna0onal
Ins0tute
for
Sustainable
Development

13. 12.06.1512.06.15
Building Europe Together with Public Private Partnerships
13
PPP=Lifecycle Risk Management
Risk Matrix
Risk Type Mitigation
Pre-completion
- Cost over-runs
- Delays
(a) Fixed price turnkey contracts
(b) Warranties / penalties / incentives
(c) Fixed project specification
(d) Strong contractors
Post-completion
- Revenue forecasts
- Revenue build-up
- Operating costs
- Management failure
(a) Committed supply contracts
(b) Committed off-take contracts
(c) Strong operators
(d) Performance guarantees
Technical
- Performance
- Environmental
- Safety
(a) Warranties
(b) Proven technologies
(c) Public consultation and approval
Financial
- Structure: debt/equity ratio, eg. 75/25
- Structure: return on capital
- Structure: risk / reward ratio
- Foreign exchange
- Interest rates
- Debt service cover
- Taxation
(a) Equitable ROE, ( eg. 15-20 %)
(b) Acceptable cover ratios ( e.g 1.5 -2.0)
(c) Escrow and reserve accounts
(d) Dividend constraints
(e) Loan syndication
(f) Insurance / financial derivatives
(g) Standby funding arrangements
Legal
- Regulatory framework?
- Concession law?
(a) Experienced lawyers.
(b) Clear, simple documents
Political
- Regime stability
- Force majeure aggt.
- Political intervention
(a) Clear regulatory regime
(b) Investment insurance
(c) IFI support

15. • Signed by all CoO in Agreement of Establishment
• Mitigates country risk based on positive previous experience
• B-lenders share the benefits
15
EBRD: a partner to leverage finance
IFI with preferred creditor status
• Focused on the “nearly there” countries to reach investment grade
• Agenda in development
Credit enhancement guarantees
• Partial Credit Guarantees to mitigate technology risk
• Proven efficiency to push for market penetration
Mobilization of Climate Finance

16. STARTEGIC
PROCURMENT
STEERINGWHEEL
OF
THE
SHIP
OF
STATE
HIGH
LEVEL
• LAW
AND
REGULATION
• WHAT
YOU
ARE
ALLOWED
• THE
BOUNDARIES
MOST
FORGOTTEN
• STARTEGIC
PROCUMENT
• UNDERSTAND
THE
BUSINESS
(OWN
AND
PRIVATE
SECTOR)
•
GETTING
VALUE
FOR
MONEY
NORMAL
STEP
• PROCURMENT
• WHAT
YOU
WANT
• SHORT
TERM
AN
PRICE

17. Why
are
Sustainable
Infrastructure
Projects
so
difficult
to
structure?
Q
&
A
–
Round
2
www.iisd.org
©2015
The
Interna0onal
Ins0tute
for
Sustainable
Development

18. 5th
GIB
Sustainable
Infrastructure
Summit
WIFI
hhonors-­‐public
Conference
Code:MTG2531
#gib-­‐summit