Canada Infrastructure Bank November 2018 1
CIB Mandate In Invest $35B… Attr tract private capital… Into new infrastructure projects… In the publi lic in interest Transfer significant usage or demand risk … Provide advisory services including best practices, data, information and Inventory of Canadian Infrastructure Projects 2
We will invest >$5bn in each of the focus areas Gr Green Publi lic Tran ansport In Infrastructure Tran ansit an and Trade 3
Building Blocks – Expanding on success of PPPs RISKS RE RIS RETAINED Equity Construction Risk Financing Equity Debt Debt Government Government Financing Financing Government Government Financing Financing CIB Investment Government Financing Design Build Design Bid Design Build Usage & Us Design Build Finance Operate Build Finance Revenue & Maintain 4
CIB Investment Criteria – Type of Project Tran ansformative Publi lic In Interest Su Sustainable le Bankabilit Ba ility Level l Pla layin ing Fie ield ld Reasonable Prospect Competing Infrastructure of earning returns on Investment Go to Mark rket Procurement St Strategy 5
CIB Investment Criteria – Structure CIB seeks CIB does NOT • To fi finance pr proje ojects • • Private sector ris risk sha sharin ing Provide recurring funding - Construction • Take all of the risk - Usage and revenue, ramp-up - Capacity • Crowd-out private investment - Regulatory with cheap capital - Operational • Allow first money out for private • Private investment = a mult ultip iple le investors of CIB’s • • Create unfair market advantage Strong alignment of all partners • Level playing field 6
CIB will fill in gaps to improve viability of Projects FLEXIBLE INSTRUMENTS • Deb Debt or or eq equit ity In Investment • Senior/preferred or subordinated • Long term or short term FLEXIBLE RETURNS • NO NO Gr Grants • Investment: 0% to market pricing • Pricing will depend on the requirements of the project FLEXIBLE TERMS • Protect CIB investment, but allow developer to manage project effectively • Alignment of interests between all parties 7
CIB Market Roles CIB actively works with the Public and Private Sector Public lic Sect ector Spon onsors Priv rivate Sect ector Spon onsors (Government Sponsors and Procurement Agencies) (Proponents, Bidders and Debt& Equity Investors) • Co-investment of Development Costs • Market Sounding • Advisory & Structuring • Stapled Investment Products • Bankability Assessment Ca Canada • Treeing with Bidders • Private Sector Risk perspective • Infr In frastructure Co-Investment & Syndication • “Backstop Commitment” • Sell Down Bank Ba • Stapled Investment Products • Unsolicited Projects • Standardized Investments for Scalability • Market Development Ideas • Go to market strategy • CIB Investment Requests 8
Market Engagement Bac Backstop Commitment Com Uns Unsolic icited Standardized St Proposals Investments In s for or sc scalabil ility Develop a De a cr credible pr process ss for or all all De Develop a a cr credible pr process ss for or all all Mar arket disc discovery of of the fina financing le levels s of of governments levels le s of of government to work ork wit ith gap ap for or CIB in investment • Credentials based • Debt or equity programs • Competitive process procurement • Smaller investments • Maximize risk transfer • Early projects • Create scale to syndicate • Convene private sector capital • Appropriate market testing • Limit CIB investment to required financing gap 9
We have had over 120 outreach meetings Activ ively ly Engaged Clos losed Project Di Discussions 1 in inves estment > 55 proje jects 10 projec ects > 50%unsoli 50% olicited 10
Réseau Express Métropolitain (REM) $1,283,000,000 • Interest Rate =1% escalating to 3% • $2.9 billion of private capital is more than two times CIB’s • Core investment area for CIB • Meets CIB’s public interest and bankability criteria Senior Secu cured Le Lender 15-Year Term Loan • Five months to negotiate and finalize August 2018 11
Inventory of Canadian Infrastructure Projects Objectives Promote opportunities to domestic Foster collaboration, sharing of best and international service and capital providers practices and coordination of procurement • Content provided by project proponents, managed by CIB • Accessible to any user, free of charge • Comprehensive list, not just projects meeting CIB criteria • Projects in all stages of development • Submission details to include project description, cost, stage, timing • Expected launch by mid 2019 12
We are building more infrastructure for Canadians and a larger addressable market More large scale transformative projects More “government demand” for private investments More equity and debt Sophisticated unsolicited proposal process More revenue, usage and operating risks and returns 13
investments@cib-bic.ca investissements@cib-bic.ca 14 14
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