Business Opportunities in MENA Toronto - September 2018 Owais Ahmed, Chief Representative - MEEP Export Development Canada
EDC OVERVIEW Ø Canada’s Export Credit Agency Ø Crown corporation wholly owned by the Government of Canada About EDC Ø Financially self-sustaining – Rated AAA/S&P Ø Operates on commercial principles Ø Support and develop Canada’s export trade and international business efforts EDC’s Role Ø Provide financing and insurance solutions as well as market intelligence to Canadian exporters and investors 2
2017 PERFORMANCE HIGHLIGHTS › Facilitated $103.7 billion in business carried out by Canadian companies › Served more than 9,398 customers › Supported business in 200 countries › Facilitated $29.9 billion in emerging markets › Our work supported 524,000 jobs 3
EDC’S CANADIAN PRESENCE Ø EDC has offices across Canada Ø We do business where business is done 4
EDC’S FOREIGN REPRESENTATION London, United Kingdom Moscow, Russia Düsseldorf, Germany Beijing, People’s Republic of China Istanbul, Turkey Shanghai, People’s Republic of China Monterrey, Mexico Mexico City, Mexico New Delhi, India Singapore Bogotá, Colombia Mumbai, India Jakarta, Indonesia Dubai, UAE Lima, Peru Rio de Janeiro, Brazil São Paulo, Brazil Johannesburg, South Africa Santiago, Chile Sydney, Australia Location of EDC Representation 5
EDC PRODUCTS & SERVICES Canadian Benefits Canadian Procurement CDIA FDI-IN Direct Financing & Guarantee Insurance Products Solutions Ø Canadian Exporters in Canada Ø Accounts Receivable Insurance Ø Foreign Buyers of Canadian Goods and Ø Documentary Letters of Credit Insurance Services Ø Political Risk Insurance Ø Canadian Companies Investing Abroad Ø Non-Honoring Sovereign Insurance (“NHS”) (CDIA) Ø Bonding (Bid, Advance, Performance & Ø Foreign Companies Investing in Canada Warranty) (FDI-IN) 6
EDC PRICING GUIDELINES Ø EDC typically operates as a competitive commercial based direct lender Ø When market benchmarks are not available or if there is ECA competition, EDC can offer OECD Consensus based direct financing or traditional ECA guarantees to commercial banks priced based on OECD Consensus ( including Consensus Minimum ) where required MARKET BASED PRICING Ø Competitive pricing is consistent with commercial market benchmarks and ensures the rate is consistent with competitive pricing the Obligor would obtain from the market CONSENSUS BASED PRICING Ø Pricing is consistent with the interest rate provisions set forth by the OECD Consensus Arrangement 7
POSSIBLE FINANCING SOLUTIONS – CANADIAN MANDATE EXPORT SUPPORT MANDATE Ø Supporting actual contract award to a Canadian company* § Project Financing –contract/package award to Canadian companies § Corporate Financing – Aggregate financing to a Local Borrower o 12 months look-back o Bi-lateral loan between the Local Borrower and EDC or participation in the Local Borrower’s Syndications *EDC financing solutions are available to Canadian based subsidiaries of foreign companies 8
POSSIBLE FINANCING SOLUTIONS – CANADIAN MANDATE PULL MANDATE Ø Predicated on successful engagement with a buyer’s procurement teams and likelihood of future procurement from Canada Ø EDC participates in financing facilities for key buyers to create opportunities for Canadian suppliers § Historical and Forward Looking § Project or Corporate Financing ( Same as Export Support Mandate ) No legal or contractual obligations to purchase Canadian goods & services … ..expectation of engagement to consider Canadian capabilities 9
EDC PULL FINANCING PROGRAM EDC participation in financing today on premise of potential future procurement Loan $$ Financing Relationship BORROWER EDC Procurement Relationship Loan Repayment $$ Borrower Commitments EDC Commitments • Sign Pull and Disclosure Letter • EDC commits to funding on pre- • Share Capex Information and agreed terms historical Canadian procurement ( if • Funds disbursed are untied to any ) procurement; no clawbacks or • Introduce EDC to procurement prepayment requirements decision makers • EDC introduces qualified • Participate in B2B meetings Canadian companies to the • Provide Canadian procurement Borrower reporting to EDC annually No legal or contractual obligations to purchase Canadian goods & services … ..expectation of engagement to consider Canadian capabilities 10
EDC PULL FINANCING PROGRAM EDC participation in financing today on premise of potential future procurement EDC provides a loan to targeted foreign buyers with procurement needs that match Canadian expertise, and the foreign buyer commits to working with EDC to buy from Canada. 9 foreign buyers Pulls in the MENA region $ 3.3 B 9 in loans pull facilities 160 + Canadian exporters millions in exports 11
POSSIBLE FINANCING SOLUTIONS – CANADIAN MANDATE PROTOCOL MANDATE Ø Supporting International Companies with well established Canadian footprint (i.e. GE) Ø Protocol Customer requests EDC participation in foreign buyer financings on their behalf as value added to Protocol Customer’s foreign buyers Ø Forms of Financing Participation: § Project Financing § Corporate Financing 12
POSSIBLE FINANCING SOLUTIONS – CANADIAN MANDATE FOREIGN DIRECT INVESTMENT (FDI) MANDATE Ø Supporting the financing of acquisitions of Canadian companies by non- Canadian companies (FDI-IN). § Benefits accrue to Canadian companies in becoming an exporter post-acquisition § Benefits accrue to Canadian companies becoming more efficient as a result of the acquisition § Benefits accrue to Canadian companies in accessing new distribution channels as a result of the acquisition Ø Forms of Financing Participation: § Project Financing § Corporate Financing 13
MIDDLE EAST – Highlights • Aggregate Population: ~200mn • Aggregate GDP: ~$2 tn • Aggregate SWF: ~$2.9 tn – Attractive FDI pool • Upcoming Project Pipeline: ~$2 tn • Bahrain, Egypt, Iraq, Kuwait, Oman, Qatar, KSA, UAE 14
MIDDLE EAST – POPULATION 99,3 120 100% 39,3 90% 88% 88% 33,5 100 80% 2,7 1,5 70% 9,5 70% 4,2 80 4,8 60% 60 50% 48% 45% 40% 37% 40 30% 20% 20 10% 0 0 0 0% Bahrain Egypt Iraq Kuwait Oman Qatar KSA UAE Pop (m) Expat (%) 15
MIDDLE EAST – GDP Aggregate GDP: ~$2 tn 800 683,8 700 600 500 377,4 400 300 237,1 197,7 166,3 200 120,4 74,3 100 34,9 0 Bahrain Egypt Iraq Kuwait Oman Qatar KSA UAE 16
MIDDLE EAST – Trade 350 314,7 300 241,3 250 231,3 200 136,8 150 100 56,7 56,2 53,1 54,1 36,4 50 31,9 29,3 26,7 23,5 22,7 14,3 13,9 0 Bahrain Egypt Iraq Kuwait Oman Qatar KSA UAE Export (bn) Import (bn) 17
MIDDLE EAST – Total “Upcoming” Project Pipeline 2 500,00 2 008,00 2 000,00 1 500,00 1 000,00 847,70 509,70 500,00 289,60 100,40 84,40 73,00 62,90 40,30 - Value (bn) Chemicals Construction Gas Industrial Oil Power Transportation Water 18
MIDDLE EAST – Total “Upcoming” Project Pipeline Value of ~$2 tn [VALUE] [VALUE] Bahrain [VALUE] UAE Egypt [VALUE] Iraq [VALUE] Kuwait [VALUE] Oman [VALUE] Qatar [VALUE] KSA 19
MIDDLE EAST – Total “Upcoming” Project Pipeline Bahrain 46,9 50 45 40 35 30 21,0 25 20 11,6 15 6,2 10 4,7 1,5 1,1 5 0,6 0,2 0 • Transportation: Airport & Sea Terminal, Light Rail • Construction: Residential, Commercial, Retail, Mixed-Use, Healthcare, Hospitality, Schools • Oil: Upstream, Downstream & Midstream • Power: Generation (conventional & renewable - Solar), Transmission • Water: Treatment, Transmission & Desalination • Chemicals: Petchem • Gas: Transmission • Industrial: Alu Casting 20
MIDDLE EAST – Total “Upcoming” Project Pipeline Egypt 300 241,8 250 200 150 86,8 100 67,9 41,0 50 17,1 15,7 10,9 0,8 1,6 0 • Power: Generation (conventional, renewable - solar/wind, nuclear), Transmission • Construction: Residential, Commercial, Retail, Mixed-Use, Healthcare, Hospitality, Schools • Transportation: Airport & Sea Terminal, Rail • Industrial: Pharmaceutical, Makeup, Aluminium, Sugar • Gas: Upstream, Downstream, Transmission • Chemicals: Petchem • Oil: Downstream • Water: Treatment, Transmission & Desalination 21
MIDDLE EAST – Total “Upcoming” Project Pipeline Iraq 100 87,9 90 80 70 60 50 40 25,5 24,7 30 15,9 20 11,0 5,3 4,1 10 0,5 0,9 0 • Construction: Residential, Commercial, Retail, Mixed-Use, Healthcare, Hospitality, Schools • Transportation: Airport & Sea Terminal, Rail • Oil: Upstream, Downstream & Midstream • Chemicals: Petchem • Gas: Upstream, Downstream, Transmission • Water: Treatment, Transmission & Desalination • Power: Generation (conventional, renewable - solar/wind) • Industrial: Glass, Cement 22
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