InterAmerican Development Bank

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• Inter-American Development Bank
• Private Sector Financing with the IDB
• IDB Business Seminar
• September 26, 2003 - Washington, DC

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• PRIVATE SECTOR DEPARTMENT (PRI)
• Products for Infrastructure Financing

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IDB Private Sector Financial Instruments

• Long Term Direct Loans (A Loans)
• Syndicated Loan Participations (B Loans)
• Credit and Political Risk Guarantees

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Eligible Sectors for Financing with PRI

• Energy
• Transportation
• Telecommunications
• Water and Sanitation Sector
• Capital Markets Development

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IDB Private Sector Loans in Execution

• Highlights 1995-Present
• 56 projects
• 13 countries
• 67 commercial banks, 15 institutional investors
• Total project costs US14.7 billion
• A Loans US2.1 billion
• B Loans US3.7 billion
• Political Risk Guarantees US456.0 million
• Credit Guarantees US75.0 million

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• CHILEAN TRANSPORTATION SECTOR
• Costanera Norte Toll Road Project

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Costanera Norte S.A. Project Map
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Costanera Norte The Concession

• Terms and Conditions
• One of four large urban expressways in
  metropolitan Santiago
• 30-year BOT Concession with the Ministerio de
  Obras Públicas (MOP)
• Concessionaire must perform approximately US400
  million in capital expenditures in exchange for
  the right to charge vehicle tolls during the
  30-year period
• Concession requires free-flow electronic tolling
  complete with video recognition and transponder
  equipment
• Concession includes a Minimum Revenue Guarantee
  provided by the MOP, which includes
  revenue-sharing with the Government in cases of
  superior revenue performance

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Costanera Norte The Project Company
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Costanera Norte Construction Operations

• Key Aspects
• Construction of over 7 km of tunnels
• Construction of 31 over/underpasses
• Construction and maintenance of 12 bridges in the
  Central section
• Fortification of the riverbeds
• Construction and maintenance of new parks and
  other green areas
• Lighting, signaling, etc.
• Fully-automated, free-flow electronic tolling
  system
• Operation, maintenance and tolling to be
  performed by the Concessionaire

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Costanera Norte Tolling Program

• Key Aspects
• Fully-automated, free-flow tolling system
  complete with transponders and video recognition
  equipment
• Tolling systems compatible among the 4 urban
  highway concessions in Santiago
• Melbourne City Link, Toronto 407, Cross-Israel
  Highway
• Toll rates adjusted to discourage rush hour
  transit
• First of its type in Latin America

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Costanera Norte Structuring the Guaranty

• Issues
• Greenfield project
• New tolling system to be put in place for the
  entire metropolitan area
• Complex construction works
• Local currency revenue stream
• Need for long tenor financing to match cash flow
  profile
• Solution
• Local currency bond (Chilean peso indexed to UF)
  placed with insurance companies and pension funds
• IDB as Lender of Record provides comprehensive
  full wrap to institutional investors
• IDB executes back-to-back risk participation
  agreement with monoline insurance company (Ambac
  Assurance Corporation)
• Bonds amortized based on the profile of the
  Minimum Revenue Guarantee from the MOP

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Costanera Norte Guaranty Structure
Institutional Investors Bondholders Assumes
IDB/Co-Guarantor Risk
IDB Financial Guaranty Lender of Record Assumes
credit risk of Issuer
UF Bond Proceeds
UF Coupon Payments
Back-to-Back Guarantee Agreement
Mono/Multiline Insurer
Issuer Costanera Norte S.A.
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Costanera Norte Role of the IDB

• Benefits to Issuer
• Long tenor financing (20 years)
• Ability to tap local currency bond market
• Placement spread
• Benefit to Bondholders
• AAA-rating of the Bank required by SVS
• Participation of the Bank provides political risk
  mitigant
• Benefit to Monoline Co-Guarantor
• IDB relationship with Chilean Government
• IDB experience with MOP concessions and Chilean
  bond market
• De facto Preferred Creditor Status
• IDB umbrella applies to Co-Guarantor portion of
  the Guaranty

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• THE PRIVATE SECTOR DEPARTMENT (PRI)
• Consulting/Advisory Opportunities

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Opportunities with IDB Private Sector
Transactions

• Pre-Financial Closing Due Diligence
• Independent Engineer
• Traffic Advisors/Market Consultants
• Environmental and Social Consultants
• Insurance Consultants
• Economic Advisory Consultants
• Financial Model Audits

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Opportunities with IDB Private Sector
Transactions

• Post-Financial Closing Monitoring
• Independent Engineer
• Traffic/Market Advisory
• Environmental and Social Compliance Monitoring
• Ex-Post Economic Reviews
• Insurance Reviews

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Opportunities with IDB Private Sector
Transactions

• Contact information
• John Graham
• Investment Officer
• Private Sector Department, IDB
• Tel [phone]
• Fax [phone]
• E-mail johngra_at_iadb.org
• For new project opportunities and other
  information
• www.iadb.org.pri

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• Inter-American Development Bank
• Private Sector Department (PRI)