European Bank for Reconstruction and Development Financing the Agribusiness Sector

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European Bank for Reconstruction and
DevelopmentFinancing the Agribusiness Sector

• 2005

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Structure of presentation

• Introduction to EBRD
• Financing instruments
• Financing requirements
• What EBRD brings to its clients
• Contacts

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Introduction to EBRD
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• International financial institution created in
  1991 to promote transition to market economies of
  27 countries of Eastern and Central Europe and
  FSU
• Owned by 60 countries and 2 inter-governmental
  institutions
• Largest financial investor in the region with
  EUR26.5bn committed to September 2005, including
  EUR6bn in Russia and EUR2bn in food and beverage.

Cumulative commitments 26.5 billion
Unaudited to September 2005.
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EBRD 32 offices in 27 countries
Albania ? Armenia ? Azerbaijan ? Belarus ? Bosnia
and Herzegovina ? Bulgaria ? Croatia ? Czech
Republic ? Estonia ? FYR Macedonia ? Georgia ?
Hungary ? Kazakhstan ? Kyrgyzstan ? Latvia ?
Lithuania ? Moldova ? Poland ? Romania ? Russian
Federation ? Slovak Republic ? Slovenia ?
Tajikistan ? Turkmenistan ? Ukraine ? Uzbekistan
? Yugoslavia
Resident Offices Regional Offices Headquarters
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EBRD Financing instruments
Loans
Equity
Guarantees

• Common stock or preferred
• Minority position only (up to 35)
• Mezzanine debt

• Senior, subordinated, convertible
• LT (up to 10y) or ST revolving
• Floating/ fixed rates
• Choice of currency
• Syndication possible for large amounts

• of specific risk (i.e. political)
• Commodity-backed instruments
• Trade facilitation program (with participation of
  local banks)

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EBRD Agribusiness Sector Expertise
We finance all stages of the food chain
Upstream
Downstream
Agricultural inputs production
Primary secondary processing
Packaging distribution
Retail Food Service
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Presence in Russian Food Beverage sector
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EBRD basic project criteria

• The operation is located in our countries of
  operation
• Investments have beneficial effect on local
  economy
• We are not crowding out private money
• The Project makes economic sense - no soft
  loans
• Main shareholder has substantial money at risk
  before EBRD
• Small size (lt7 m for EBRD) is difficult directly
  from EBRD but special facilities are available
  (DIF, SME, phased investment)
• Compliance over time with EU environmental
  standards

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Financing requirements of EBRD

• Ensure appropriate return for risk taken by
  assessing carefully risks, including
• Management strength and strategy
• - Clear business plan and project costs
• Transparency of operations
• Disclosed identity of final shareholders and
  corporate structure
• Identified and limited past tax liability risk
• Recourse to subsidiaries generating profits and
  holding assets
• Arms length dealing
• IFRS/US GAAP Consolidated audit
• - in place or in progress

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What EBRD brings to its clients

• Commitment to the region and knowledge of local
  environment
• Longer maturity and higher risk exposure than
  typically available in the region
• Creative and tailor made structuring and
  competitive pricing
• A possibility of strategic / long-term
  partnership
• Equity joint-ventures
• Multi-project facilities
• Big pockets
• Help to secure additional financing
• Preferred creditor status to attract commercial
  lenders
• Political comfort
• Competitive pricing
• Reference for IPO candidates

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How to contact the EBRD
Hans Christian Jacobsen Email JacobseH_at_ebrd.com T
el 44 207 338 6669 Catherine Gourdin Email
gourdinc_at_mos.ebrd.com Natalya Zhukova Email
zhukovan_at_mos.ebrd.com Tel [phone] Web
site www.ebrd.com/agribusiness.htm
Head, Agribusiness Senior Banker Associate
Banker