EDC: Your Partner in Central America

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EDC Your Partner in Central America
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EDC Facilitating Canadian Trade

• EDC is Canadas official export credit agency
  (ECA) offering financial solutions to help
  Canadian exporters and investors expand their
  international business
• We work in partnership with the public and
  private sectors to enhance the visibility of
  Canadian companies abroad
• EDCs financial services include financing,
  insurance and guarantees
• EDCs combined financing and insurance volumes
  reached 85.8 billion in 2008 (23 increased
  over 2007) while serving 8,312 Canadian companies
  (11 increase)

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EDC How We Add Value

• EDC PRODUCTS
• Accounts Receivable Insurance
• Protects Exporters accounts receivables against
  non-payment by their buyers
• Contract Insurance Bonding
• Guarantee of Exporters bid and performance bonds
  or any advances (ie. Down payments) received

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EDC How We Add Value, Contd

• MORE EDC PRODUCTS
• Financing
• Flexible, medium- or long-term financing for
  buyers of Canadian capital goods and services
  including Structured Finance (Project Finance)
• Canadian foreign investment financing can also be
  considered
• Political Risk Insurance
• Provided for Canadian companies investments or
  assets in a foreign country, as well as
  protecting project loans from political risks

EDC financing for real estate type projects is
generally done via a financial institution
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EDC A FOCUS ON INFRASTRUCTURE

• EDCs infrastructure focus covers construction of
  buildings, roads, ports and airports, design,
  engineering and electrical power.
• A goal to introduce Canadian companies to the
  needs of private and public developers in the
  Central American market.

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MARKETS OF INTEREST - INFRASTRUCTURE SECTOR

• In Latin America, the needs for new
  infrastructure investments exceed US45 billion
  annually.
• Central America is a market of interest to
  Canadians due to its proximity, and the growth of
  the trade and banking sectors.
• Canada has a long tradition in the region and is
  well respected.
• Canadian design and construction expertise
  together with construction supplies are a good
  fit for the needs of the market.
• Increased funding by Multilateral Development
  Banks to meet regional demands in light of
  current financial/economic conditions.

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ECONOMIC OUTLOOK/POTENTIAL
GDP (2008 est.) US134.1 bln GDP as PPP (2008
est.) 249.9 blnGDP Growth (2007-2008)
12.4Canadian exports (2008) C519.2 mln

• Central America Region
• Canada's commercial interests in the region are
  primarily in construction and infrastructure
  projects, agriculture, mining, environmental
  services and services industries.
• Recently Canada and Panama initiated talks to
  explore the potential establishment of a Free
  Trade Agreement between the two nations. The
  first round of exploratory discussions will take
  place in May 2008.
• Canada has a free trade agreement with Costa
  Rica. The Canada-Costa Rica FTA (CCRFTA) entered
  into force on November 1, 2002, becoming the
  cornerstone of our increasingly important
  bilateral trade and investment relationship.
  Between 2002 and 2008, two-way merchandise trade
  increased 49 (from 324 million to 482
  million).
• While current spending on infrastructure is not
  enough to meet the demands posed by recent trade
  agreements, the Plan Puebla Panama and the
  Meso-American Energy Integration Project promise
  large-scale infrastructure investment.

Stats IMF
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EDCs FOCUS IN CENTRAL AMERICA

• Countries of FOCUS
• Costa Rica
• Panama
• Sectors of FOCUS
• Infrastructure and Environment Sector

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WHY COSTA RICA?

• Business Environment
• A strategic location in the center of the
  Americas.
• Preferential access to strategic markets.
• Foreign investment incentive regimes
• Strong democratic history - Political stability
  contributed to the reduction of fiscal deficit,
  lower interest rates, strong growth since 2005,
  greater interventions by the Central bank
  following the introduction of a new exchange
  regime.

• CANADIAN FOOTPRINT
• Growing Canadian footprint in the market
• Infrastructure opportunities are key as well as
  construction and supply into construction
  projects
• Canada is leader in Waste Management in Costa
  Rica
• Growing interest in Canadian products and
  services in the construction supply sector

COSTA RICA (2008 IMF est.) GDP US30.38
billion Annual growth rate 15.76.
Population 4.5 millionPer capita GDP US6,726

Inflation 12.1 COSTA RICA
CANADA TRADE (2008) Canadian Exports to Costa
Rica CAD 102.6 mln 35.1 increase from
2007 Canadian Imports from Costa Rica CAD 376.2
mln Free Trade Agreement entered into force in
November 2002.
Stats IMF, StatsCan
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CONSTRUCTION SECTOR
COSTA RICA
HIGHLIGHTS

• The construction industry plays an important role
  in the Costa Rican economy. It is also one of
  the most diverse and fastest growing in the
  region.
• Prior to the financial crisis, the sector has
  contributed between 3.7 and 4.0 per year to the
  countrys GDP. Furthermore, the private sector
  investment in construction projects increased by
  20.7.
• The sector employs close to 130,000 people
  directly. Most construction activity is taken
  place in the tourist regions of Guanacaste and
  Puntarenas.
• Total investment in the construction sector
  amounted to CAD2 billion in 2007, representing
  an important increase due to housing and tourism
  construction.
• A slow down is currently being experienced in
  light of the global financial crisis.

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COSTA RICA
PUBLIC SECTOR

• Government investment in public infrastructure
• Government has identified the need to award at
  least 6.6 billion in new contracts over the next
  few years
• Building of roads (82 million) Ministry of
  Public Works and Transportation National
  Concession Council
• New water treatment plant in San José (276
  million) Costa Rican Institute of Acueducts and
  Sewages (AA)
• Expansion of the Liberia airport ( 18.9
  million). Ministry of Public Works and
  Transportation National Concession Council
• Expansion of the railroad network and the
  development of an urban rapid train Ministry of
  Public Works and Transportation National
  Concession Council
• Construction of 14 energy generation facilities
  (3 billion) Costa Rican Electric Institute (ICE)
• Hospital facilities and equipment (174 million).
  Costa Rican Social Security System (CCSS)
• Construction of a new port in the city of Limon
  (tbc)

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COSTA RICA
CONSTRUCTION SUPPLIES

• Gradual change from horizontal construction to a
  vertical one
• There is new demand for high rise construction in
  the city of San Jose. This new development is
  triggering the need for new technologies,
  products and systems
• Need for differentiated building products and for
  advanced construction systems. These factors have
  fostered an environment receptive to Canadian
  building products
• Building products such as MDF, Plywood and
  Melamine panels, softwood lumber, doors and
  Windows, roofing products, bathroom fixtures and
  partitions, engineered flooring, equipment for
  scaffolding, shuttering, propping, Cabinetry
• Costa Rica Construction Sector Main Competitors
  USA, EU, Brazil, Chile, Venezuela, Colombia and
  Mexico
• SEE ANNEX FOR FURTHER INFORMATION ON SPECIFIC
  PRODUCTS

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WHY PANAMA?

• CANADIAN FOOTPRINT
• Growing Canadian footprint in the market
• Infrastructure/Construction through out the
  supply chain including contractors, equipments,
  and services
• Large engineering companies currently
• targeting infrastructure projects. (SNC Lavalin,
  Dessau, Hatch Energy)
• The construction boom in Panama has
• elevated Canadian interest and has resulted in
  companies of all sizes to enter the market

• Business Environment
• Regional hub and logistic center of the Americas
• Panama is a country with a low fiscal deficit,
  good debt service ratios, relatively low
  inflation but high economic growth
• Panama is a dollar economy
• International Banking Center, with
• Over 70 banks with assets over 40 billion
• Strict international standards
• One of the most stable and modern system in Latin
  America
• The country remains an open economy with the
  service sector as the main driver of growth.
• Free-Trade negotiations between Canada and Panama
  currently ongoing.

PANAMA (IMF 2008 est.) GDP US23.4 billion

Annual growth rate 18.6 Population 3.4
millionPer capita GDP US6,882

Inflation 9.2 PANAMA CANADA TRADE
(2008) Canadian Exports to Panama CAD 109.8 mln
47.3 increase Canadian Imports from
Panama CAD 21.3 mln Foreign Investment
Protection Agreement signed with Panama 1996
Source IMF, StatsCan
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CONSTRUCTION SECTOR
PANAMA
HIGHLIGHTS

• There is an estimated need for US20-30 bln in
  new infrastructure investment in Panama over the
  next 5-10 years
• Currently, Panama is in year-one of a five-year
  expansion project
• Large oil refinery costing US7 bln at Puerto
  Armuelles expected to be built. Feasibility
  studies ending in beginning of 2009
• Panamanian government in negotiations to
  construct a second mega-port on the Pacific Coast
• Strong investment in mega-projects (ie Panama
  Canal Expansion) will partly offset weakened
  international financial markets

Source Economist Intelligence Unit Limited
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PUBLIC SECTOR
PANAMA

• PANAMA CANAL AUTHORITY (ACP) - www.pancanal.com
• Beyond the US5.25 billion for the expansion. ACP
  purchases approximately USD300 million annually
• 2. Ministry of Public Works (MOP) -
  www.mop.gob.pa
• By the end of this year MOP will have called for
  bids of 370 projects with an investment of
  US306.5M, in rehabilitation of thousands of
  roads
• 3. Ministry of Housing (MIVI) - www.mivi.gob.pa
• This year MIVI will call for bids of 5,078 houses
  with an investment of US36M
• 4. Community Development and Public
  Infrastructure Project (PRODEC)
  www.presidencia.gob.pa
• The Presidents Office will invest US100M in
  Public Infrastructure

www.panamacompra.gob.pa
Tenders, frame laws, bid winners
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PANAMA
CONSTRUCTION SUPPLIES
Steel
Cement
Protective equipment
Construction cranes
Engineering Services
Training Services
Heavy equipment/parts
Repair equipment
Project Management
Road materials
Waste Management
Construction Material
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HOW TO TAKE ADVANTAGE OF THE OPPORTUNITIES

• Participate in a Trade show and or Trade Missions
  to Panama.
• CAPAC EXPOHabitat - Panamá, Centro de
  Convenciones Atlapa,
• www.capacexpo.com
• Joint venture or partnerships with developers or
  construction material importers
• Use Colon Free Zone (CFZ) or Panama-Pacific
  Special Economic Area
• (former HOWARD US military base) for light
  manufacturing or wholesale operations for Central
  America, South American and the Caribbean
• Open regional offices in Panama taking in
  consideration the air and maritime logistic
  centre, high speed telecommunication system,
  banking center (Scotiabank), etc.

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HOW TO TAKE ADVANTAGE OF THE OPPORTUNITIES

• Contact the Canadian Embassy
• Canadian Embassy has a large network of local
  contacts within construction companies, building
  materials and the local industry association.
• The Canadian Embassy can help to identify a
  partner, local representative and legal council.
• Canadian Embassy and EDC organize missions of
  local buyers to visits Canada.
• Canadian companies can participate in the local
  building materials trade show " EXPOCONSTRUCCION"
  held every March.
• Cámara Costarricense de la Construcción (Costa
  Rican Construction Association) E-mail
  jmolina_at_construccion.co.crInternet
  www.construccion.co.cr

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Seizing MDB-Funded Infrastructure Contracts
Two Principal Multilateral Development Banks in
the Region

• World Bank
• www.worldbank.org
• Inter-American Development Bank
• www.iadb.org
• If you are interested in bidding on MDB-funded
  contracts, you can download a free copy of the
  Guide for Canadian Businesses at
• www.edc.ca/infrastructure

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EDC HOW WE ADD VALUE

• Providing financial solutions to Canadian
  exporters
• Creating Match-making opportunities
• Connecting with buyers

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EDC - HOW WE ADD VALUE
Building External Relationships

• An example Panama Canal Expansion Project (USD 5
  billion project)
• Hosted the Minister of the Panama Canal Expansion
  in July of 2006
• Signed a MOU with the Ministry of Economy and
  Finance to develop opportunities for Canadian
  companies
• Lead a trade Mission to Panama for Atlantic
  Canada based companies in Mar. 2007 and
  introduced them to key players in the ACP
• Organized a mission to eastern Canada for the
  Panamanian Ambassador to Canada to promote
  opportunities
• Committed interest to offer financing and bonding
  support to ACP in order to facilitate
  opportunities for Canadian companies
• Is partnering with DFAIT to provide a private
  seminar for key government officials to promote
  CSR

• An example Supply to a Condominium Development
  in Panama
• EDC was approached in late 2007 for FIN for a new
  condominium tower
• EDC together with the CDN Embassy, introduced
  the developer to various new CDN companies
• EDC leveraged the participants from the 2007
  Mission and contacted them about this opportunity
• Several CDN companies are now bidding and some
  have won contracts with this developer
• EDC believes that our value goes beyond financing
  in that the financing should be leveraged to open
  doors for new opportunities for CDN companies

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Key Contacts

• Karen Mallory
• Sector Advisor - Infrastructure Environment
• Tel [phone]/Fax [phone]
• Email kmallory_at_edc.ca
• Nathan Andrew Nelson
• Regional Manager (Latin America) - International
  Business Development Group
• Tel [phone]/Fax [phone]
• Email nnelson_at_edc.ca
• Luis Cedeño
• Trade Commissioner - Canadian Embassy in Panama
• Tel [phone]/Fax [phone]
• Email luis.cedeno_at_international.gc.ca
• Adolfo Quesada
• Trade Commissioner - Canadian Embassy in Costa
  Rica
• Tel [phone]/Fax (011-506)
  242-4415Email adolfo.quesada_at_international.gc.ca
  

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INFRASTRUCTURE PROJECTS (2008-2015)
Updated April 2008