Opportunities for Working with the IDB in the Caribbean Nathaniel Jackson Vice Presidency for Private Sector and Non- Sovereign Guaranteed Operations June 23, 2010

Agenda –Background –Objective: Achieving Development through the Private Sector –IDB’s Four Private Sector Windows I.IDB: Who we are and what we do II.Private Sector Windows III.Working with the IDB –Structure and Corporate Finance Department (SCF) –Inter-American Investment Corporation (IIC) –Multilateral Investment Fund (MIF) –Opportunities for the Majority (OMJ)

I.IDB: Who we are and what we do

Background of the IDB Established in 1959, the IDB is the oldest Regional Multilateral Bank in the world 48 member countries, 26 borrowing members The IDB provides more financing to Latin America and the Caribbean than any other government-owned regional financial institution

Objective: The IDB Group is committed to promoting development of Latin America and the Caribbean through the expansion and strengthening of the private sector Five strategy pillars for high development impact focus: Social inclusion: health, education, housing, food and nutrition, base of the pyramid, job creation Infrastructure: promoting infrastructure (power, transportation, telecom, water, tourism) Institution building: financial and advisory support for private and sub- national clients (e.g., MFIs, SMEs, capital markets, etc.) Integration: trade, natural resources, cross border investments Climate change: renewable energy, energy efficiency, recycling industries, biofuels

IDB has the largest exposure in Latin America and Caribbean of any development bank Total IDB Group lending exposure to LAC: $58.0 billion Sovereign Guarantee Lending: $54.3 billion to 26 countries Non-Sovereign Guarantee (NSG) Lending and Guarantee Exposure: $3.7 billion NSG clients include both private companies and sub-national entities without a Sovereign Guarantee

IDB has four Non-Sovereign Guaranteed departments Structured and Corporate Finance (SCF): Works with the larger corporations and financial institutions, as well as project finance Inter-American Investment Corporation (IIC): Targets small and medium-sized enterprises, primarily through financial institutions Multilateral Investment Fund (MIF): Targets primarily micro-entrepreneurs and micro-finance institutions Opportunities for the Majority (OMJ): Promotes innovative projects aimed at the Bottom of the Pyramid

II.Structured and Corporate Finance (SCF)

SCF is the largest Non-Sovereign Guarantee department in terms of exposure Outstanding as of December 30, 2009: Loans: $2.8 billion Partial Credit Guarantees: $0.8 billion Trade Finance Facility Program (TFFP): $97 million Three operational divisions: –Financial Markets –Infrastructure –Corporate Finance

Structured and Corporate Finance (SCF) Department Who we areOver 100 individuals located in 11 member countries Eligible SectorsAll economic sectors Eligible ClientsPrivately or state-owned corporate entities and financial institutions CurrencyUSD and local currency ProductsSenior and Subordinated Loans, Partial Credit Guarantees, Trade Guarantees

SCF works with Corporate Sponsors, Financial Institutions and Institutional Investors Large projects with high developmental impact sponsored by corporations (sales over US$ 100 m) or financial institutions (assets over US$ 500 m) Investment areas: power, transportation, infrastructure, water, other utilities, communications, tourism, education, health care, mining, pulp and paper, agribusiness, biofuels, oil and gas, chemicals and petrochemicals. Financial sector: Lending or providing PCGs to large financial institutions. Also trade finance guaranties and financing (TFFP) and capital market initiatives

Financial Markets Division Clients Financial Institutions and intermediaries Capital market transactions (i.e. RMBs) Funds (i.e. Trade and infrastructure funds) Focus Local capital market development Trade finance Support to financial services with high social impact such as, housing, SME’s, microfinance and sustainable projects. Typical Transactions Senior secured or unsecured loans Subordinated loans (Tier II capital) Partial credit guarantees

IDB Support for Infrastructure Investment  2008 & 2009 (actual + pipeline)  Historical Approvals (through 2007) 63% 26% 6% 5% EnergyTransportationWater & SanitationCommunications 68% 28% 4%

–Energy ATE II Km Power Transmission Line in Brazil Campos Novos MW hydro-power plant in Brazil Novatrans - 1,278 kilometer power transmission line in Brazil TermoPernambuco MW thermal power plant in Brazil Termobahia MW thermal power in Brazil Bajio Energy MW combined cycle plant in Mexico Light Energy Services - CAPEX program for a power distribution company in Brazil Termoelectrica del Golfo MW thermal power plant in Mexico Aguaytia MW integrated power project in Peru –Transportation Quito Airport - Upgrade of International Airport in Ecuador Camisea - Natural gas and liquids pipeline in Peru Costanera Norte Highway - Urban highway system in Chile Rutas del Paciíico kilometer toll road in Chile Yucatán Gas Pipeline Km. Gas pipeline in Mexico –Water & Sanitation Antofagasta - Seawater desalination plant in Chile Rio Bogotá - Water treatment facility in Colombia We have won many Infrastructure Financing Awards

Corporate Finance Division Sectors –Extractive (oil & gas, mining, forest products) –Productive (agribusiness, biofuels, cement, steel, chemicals and others) –Service (tourism, education, healthcare) Typical transactions –Long-term project finance, medium-term on-balance sheet loans for investments and refinancing –Focus on supporting green (e.g. energy efficiency, co- generation, environmental impact mitigation) and social (e.g. training, housing, income inequality) components in projects and investments

II.Inter-American Investment Corporation (IIC)

IIC finances SMEs and Smaller Banks Support SMEs through local financial insitutions for on- lending Direct investment in key sectors such as agriculture and agribusiness, education, energy, infrastructure, pulp and paper, manufacturing and textiles, among others. Financial tools –Medium- or long-term loans in dollars or local currencies at market rates –Partial credit guarantees, equity and quasi-equity investments as well as financing through supply chains –Loans for Working Capital and capacity expansion for financial institutions (with assets up to US$ 500 million)

Bolivia – La Francesa US$ Food Jamaica– BOS Blocks and Tiles, Ltd. US$ Transport Generifar-Nicaragua US$ Manufacture Caribbean South Cone Central AmericaAndean Region Perú – Sinersa US$ Service & infrastructure Broad Range of Corporate Projects

Colombia – Leasing Occidente US$20,000,000 Leasing operations México – Banco Compartamos MX$330,000,000 For microfinance Dominican Republic BHD US$5,000,000 For exporting companies Mexico and CA Andean RegionCaribeanSouth Cone Brasil – Banco Itaú R$200,000,000 mortgages Example of Projects with Financial Institutions

II.Multilateral Investment Fund (MIF)

Technical Cooperation for Public Sector and Private Not-For-Profit organization 70% Technical Cooperation for Public Sector and Private Not-For-Profit organization 70% Investments through financial intermediaries who provide loans, equity investments and technical assistance 30% Investments through financial intermediaries who provide loans, equity investments and technical assistance 30% MIF Focuses on Micro and Small Enterprises Grant resources and investments to support private sector development by financing innovative, sustainable projects that can be scaled up and replicated in other contexts. MIF works with local partners from the private sector, civil society organizations and governments.

II.Opportunities for the Majority (OMJ) Opportunities for the Majority

Innovative business and marked-based solutions to benefit low income population 70% of Latin Americas earn less than US$3/day OMJ targets this sector with medium and long term loans…...and partial credit guarantees up to US$10 million Plus Technical Cooperation grants Opportunities for the Majority

Client: borrower, recipient of technical cooperation Service company: consultants can bid for providing expertise for IDB projects Manufacturer: can bid for supplying IDB projects Financial institution: Co-lender (B Loan program) Co-invester (equity) Confirming bank for trade transactions How you can work with the IDB

Please feel free to contact us Julie Katzman Manager, MIF Tel Hans Schulz Manager, SCF Tel: Steven Reed Deputy General Manager, IIC Tel: Steven Puig Vice President for Private Sector and Non-Sovereign Guaranteed Operations Tel: Luis Ros Manager, OMJ Tel