Supporting downstream projects: the EBRD approach 27 th January 2017 - PowerPoint PPT Presentation

Supporting downstream projects: the EBRD approach 27 th January 2017

Where we work? Introduction to EBRD Refineries Case studies Operat ations s in n 36 • countries across central and eastern Europe, central Asia, and the Mediterranean. In 2011, the Bank • expanded its region of operations to include Egypt, M Moroc occo, o, EBRD T RD Top 5 investees i in 2015 ( (EU EURm) Tunisia a a and J Jordan an (Southern and Eastern 1 Turkey 1,904 Mediterranean region 2 Ukraine 997 or SEMED). 3 Egypt 780 In 2015, the Bank was • 4 Kazakhstan 709 granted a special 5 Poland 647 mandate to operate in Greece and C Cyprus until 2020. Also, in 2015, • Lebanon on was granted full EBRD membership and will become country of operations. 2

A key investor in the extractive industries sector Introduction to EBRD Refineries Case studies Signe ned b bus usine ness vo volume Operating a assets by by ins nstrum ument Long track recor ord: • 175 projects for a total of Equity 1,500 EUR 7.65 billion net 7% cumulative investment. EUR million 1,000 Stron ong t team: • 30+ bankers distributed 500 across the EBRD region: o Permanent presence in - Debt Russia, Kazakhstan, 2011 2012 2013 2014 2015 8M 93% Mongolia, Ukraine, 2016 O&G Mining Egypt and Turkey. o 2 in-house mining and Operati ting a asse ssets by su sub-sector or Po Portfo folio by by region petroleum engineers involved in technical appraisal, due diligence Turkey, 6% Greece, 2% and monitoring. C. Asia & S.E. o Access to additional Mongolia, Europe, 7% Mining 34% expertise (consultants). 37% SEMed, 7% Key s sectors: • Russia, 5% o Oil & Gas up-, mid-, and E. Europe downstream. & o Metal ore mining. Oil & Gas Caucasus C. Europe, o Services Industry. 63% 26% 13% 3

EBRD product flexibility – Tailored to the client’s needs Introduction to EBRD Refineries Case studies Products Equity Alternative Debt financing financing financing Public equity Private/ state Private debt Public debt (IPOs/ FOs) owned investor Financial Asset Senior corporate Convertible Loan with Borrowing-base Project Strategic investor Corporate bonds investor Debt / Equity warrants Loans financing financing facilities Equity Debt Co Common a and d preferred s stock. Typically, up to 20% • Flexible l loan structure. Senior/subordinated, mezzanine, • minority stake. project finance, convertible debt, reserve-based, bond issues. Support to stra rategic i inve vestors rs. . Share of development- • stage risk. Up t to 1/3 o of the t total p project costs. • Lo Long term rm p partners rship. Long exit horizons (5-10 years). • Long g tenors rs. Up to 10 years, tailored to needs. • IPO par articipatio ion as as an anchor in investor: Increased • A/B syndic icat atio ion s structures. Preferred creditor status. • credibility and comfort to investors and financiers. Mobilization of commercial credit under the Bank’s umbrella. Board re repre resentation. . Positioning as neutral party • (“ honest broker ”) providing commercial/technical advice Co-finan Co ancin ing/Par aral allel l lendin ing. • and promote best Corporate Governance practices. Mult lti-cur urrenc ncy lend nding ng. EUR, USD or local currency. • 4

Financing across the Natural Resources value chain Introduction to EBRD Refineries Investments in oil & gas infrastructure Oil & G & Gas as Flexible f financing • solution ons: Exploration / Early Stages Development / Growth Mature / Expansion Reserve based lending, trade finance, convertible debt, early equity are some examples of Equity the Bank’s wide product range. Support across • st stag ages o s of Mezzanine devel elopment ent. / Sub-Debt The EBRD works with strong sponsors in pre-development stage financing, mine/field Reserves Based development, project expansion and services providers . Senior Debt 5

Recent transactions – Midstream Oil & Gas Introduction to EBRD Refineries Case studies Support to upstream o oil • and g gas operators and Lukoil–Sha hah Deniz Stag age 2 2 PICO P Petroleum G Group Energean Oil & & Gas as Irku kutsk O k Oil Merlon Internat ational al services es c compani nies es. 2015, Egypt 2015, Azerbaijan 2014, Russia 2016, Greece 2015, Egypt From small and mid- USD D 50 m milli llion USD 4 450 m million USD 1 150 m million USD 7 75mil illio ion USD 4 40 m milli llion Reserve-based loan Senior A/B loan Senior loan & size juniors to regional Senior loan Senior loan stand-by facility majors and participants Offs ffshore oil l & & gas s Onshor ore o oil & & gas as Offs ffshore gas Onshor ore & & O Offshor ore o oil Onshor ore o oil extrac action extrac action field d develop opment in large project field d develop opment field d develop opment consortia. Instruments: corporate • and project finance loans, reserves-based Advanced E Energy S Systems OMV MV Petrom – KOM M Munai ai Romga gaz Kuwait E t Energy C Company Improve ved P Petroleum financing, loans with Recove very 2015, Egypt 2014, Kazakhstan 2013, Romania 2014, Egypt 2013, Egypt profit-sharing, equity. USD D 28 m milli llion USD 2 200 m million USD 2 200 m million USD 5 50 m milli llion USD 4 40 m milli llion and USD 1 170 m million facility Senior A/B loan Initial Public Offering Reserve-based loan Senior loan Technical C Coop operation on Senior Loan & Lead arranger • Onshor ore o oil & & gas as Offs ffshore o oil Onshor ore gas s Onsh shore o oil & & g gas s Onsh shore o oil & & g gas s in energy/resource extrac action field services extrac action field d develop opment extrac action efficiency initiatives (e.g. Energy Audits, Associated Petroleum Gas flaring studies). Promotion of best Zhanros Drilli lling Serinus Energy Beresk ska Gaz az - Monolit KUB G Gas as environmental, social, 2012, Kazakhstan 2013, Tunisia 2011, Ukraine 2010, Russia health & safety and USD 2 22,5 m milli llion USD 1 120 m million USD 6 60 m milli llion USD 4 40 m milli llion Senior loan Senior A/B loan Senior loan & Senior loan technical standards. Convertible Note Onshor ore o oil Onsh shore g gas s Onsh shore o oil & & g gas s Onsh shore g gas s fiel eld s ser ervices field d develop opment field d develop opment field d develop opment 6

Refinery study carried out by Jacobs consulting- Focus on Energy Efficiency and product yield improvements Case studies Introduction to EBRD Refineries STIR JPRC Alexandria El Mex Ameriya Assuit Mostorod Cairo El-Nasr Suez Tanta Cairo MIDOR Suez Oil El-Nasr Wadi Feran 7

Refinery study carried out by Jacobs consulting- Example: Egyptian Refinery Major Upgrade Case studies Introduction to EBRD Refineries Yields b before a and nd a after i investment nts i in n Hydrocracking ng & Delayed C Coking ng uni units Opportunity for Upgrade exists in the refinery through suitable disposition of Heavy Vacuum Gas Oil (HVGO) &  Vacuum Residue (VR) to achieve high-value and high-quality refined products Elimination of fuel oil and asphalt by selection of the right processing configuration is expected to boost  margins by approximately 40%. 8

Refinery study carried out by Jacobs consulting- Energy efficiency in refineries Case studies Introduction to EBRD Refineries Fuel (74 Steam ( 18 Elect ctrici city (4 74-78% 78%) 18-20% 20%) (4-6% 6%) EBRD EB Due D Diligence Process Pr Refineries energy costs of total operating costs has nearly doubled over the past 20 years • Energy savings are at the heart of upgade programmes. • 9

Refinery study carried out by Jacobs consulting- Energy Efficiency drivers Case studies Introduction to EBRD Refineries Low-grade heat sharing Operational improvements Cogeneration Good housekeeping Heart of the process Heat recovery projects Energy monitoring High efficiency motor replacement Utility system optimization 10

Tüpra ş , Turkey – Resource efficiency investment programme Case studies Introduction to EBRD Refineries EBRD F Fin inan ance Project USD 150 million loan to Tüpraş , Turkey’s largest industrial Summary Signed in company and the owner of the country’s four active refineries. 2016 Pr Project USD 232 million resources efficiency programme, including a new on-site thermal power plant, waste heat recovery system, stack gas treatment, water treatment unit, new fluid catalytic cracker and hydrocracker unit at Kirikkale and Izmir plants. Env nvironm nment ntal I Impact Reduction in NOx and CO2 emissions (270,000 tonnes/year) and water consumption (2.6 mcm/year) as a direct result of the project. Comprehensive Environmental & Social Action Plan (ESAP) to bring the plants in line with EU standards. Transit itio ion I Impact (1) Largest resource-efficiency programme in the Turkish industrial sector to date, fully in line with the Bank’s Green Economy Transition approach. (2) Demonstration of increased competitiveness stemming from efficiency upgrades. (3) Demonstration of OHS standards in line with EU Seveso III directive and beyond national requirements. 11