ICIEC (The Islamic Corporation for the Insurance of Investment and Export Credit) Gamze Sarioglu (Turkey Representative) e-mail: fsarioglu@isdb.org

ICIEC in brief

ICIEC’s rating Since 2008, Moody's has been rating ICIEC “Aa3” for insurance financial strength (IFSR) (stable outlook) IFSR measures the ability of insurance companies to pay punctually policyholder claims and obligations

To encourage exports from Member Countries ICIEC’s Mandate Export & Import Credit Insurance Investment Insurance To encourage exports from Member Countries to the rest of the World To Encourage the Flow of Capital and Investments between Member countries and from the World to Member Countries Provide Export Credit Insurance solutions to suppliers of Capital Equipment, Essential Commodities and Food Security Related Items to Member Countries

Product Mix For Exporters

Basket of risks covered Political Risks Covered Non Payment caused by War and civil disturbance Non Payment caused by Currency Transfer Restrictions Non Payment caused by Expropriation Commercial Risks Covered Insolvency of the Buyer/LC issuing Bank Failure or refusal of the Buyer/ LC issuing Bank to pay Refusal of the buyer to accept Goods after shipment Cancellation of the contract arbitrarily by the buyer

Trade Credit Insurance Products 1. Comprehensive Short Term Policy (CSTP) covers the exporter against the risk of non-payment by its multiple buyers due to commercial or political reasons (Short-term only) 2. Specific Transaction Policy (STP) covers the exporter against the risk of non-payment by its single buyer due to commercial or political reasons (Short & Medium term)

For Investors & Financing Banks Product Mix For Investors & Financing Banks

Foreign Investment Insurance (FII) War and civil disturbance. Political Risks Covered Non Honoring of Sovereign Obligations Currency Transfer Restrictions Breach of contract Expropriation

Foreign Investment Insurance Products- Investors Equity Investment Insurance Policy (EIIP) The policy provides insurance coverage for cross border equity investments by any individual or company against transfer & convertibility, expropriation, war & civil disturbance and breach of contract. Contract Frustration (STP-CF) Policy covers the contractor against the risk of non-payment by the project owner due to commercial or political reasons (Medium term)

Sample Transactions

Greenfield investment, MENA Turkish greenfield investment, Algeria Turkish Investor - Turkey Insurance Insured : Turkish Investor Cover Against : Transfer Restriction, Expropriation, War & Civil Disturbance Insurance Duration : 4 years Percentage of cover : 90% ICIEC cover : USD 100 mil. Greenfield investment, MENA

Government Water Authority Water Desalination Plant Water Desalination Plant- Contract Frustration Milestone Payments Government Water Authority Contractor Water Desalination Plant EPC Contract Project Owner Insurance Cover Covered Party –Contractor in Non-member Country Cover Against – Non-payment Government Water Authority in Member Country Project Implementation Period - ~ 3 Years Percentage of cover – 90% ICIEC Covered amount – USD 25 mn

Foreign Investment Insurance Products- Banks 1. Bank Master Policy (BMP) provides insurance of banks export related financing to its customers against both commercial and political risks protects the commercial bank against the risk of non-payment of an Import Letter of Credit issued by an importer's bank and confirmed by the policyholder on behalf of its exporting customer. provides insurance coverage for cross border financing by banks and financial institution against transfer & convertibility, Expropriation and War and Civil disturbance. provides insurance coverage against the default of governments and government owned entities in meeting their sovereign obligations 2. Documentary Credit Insurance Policy (DCIP) 3. Financing Facility Insurance Policy (FFIP) 4. Non Honoring of Sovereign Financial Obligations (NHSO)

Sample Transactions

Health sector PPP portfolio, Turkey PROJECT: Total Investment Amount: EUR 335,000,000 Konya Karatay Integrated Health Campus PPP Project Ministry of Health’s payment guarantee Sponsor: YDA Insaat Sanayi ve Ticaret A.S. SPV: ATM Saglik Konya Yatirim ve Isletme A.S EBRD A-B Loan Availability Payments B Loan Participant ICIEC’S ROLE: To provide non honoring of sovereign financial obligation coverage Policy holder is EBRD`s B Loan participant Siemens Bank AG Amount of Policy is EUR 29,520,000 Percentage of cover is %95 Tenor of Policy is 18 years ATM Saglik Konya Yatirim ve Isletme A.S. Insurance EUR 29.5 mln Construction & FM Agreement B LOAN PARTICIPANTS: Black Sea Trade and Development Bank European Bank for Reconstruction and Development Islamic Development Bank Siemens Bank GMBH as B Loan Participant of EBRD’s B Loan Unicredit Bank Austria AG as B Loan Participant of EBRD’s B Loan Konya Karatay Integrated Health Campus

Health sector PPP portfolio, Turkey PROJECT: Total Investment Amount: EUR 540,000,000 Adana PPP Hospital Project Ministry of Health’s availability payments Sponsor: Ronesans Holding SPV: ADN PPP Saglik Yatirim ve Isletme A.S ICIEC’S ROLE: To provide non honoring of sovereign financial obligation coverage Policy holder is SMBC Amount of Policy is EUR 47,000,000 Percentage of cover is %95 Tenor of Policy is 15 years ICIEC provided EUR 47 million insurance cover to Sumitomo Mitsui Banking Corporation (SMBC), a leading Japanese bank, covering their participation in the financing of the construction of a health campus facility in Turkey against the risk of Non-Honoring of Sovereign Financial Obligation for 15 years. A large portion of the overall financing was provided by a number of multi-lateral organisations and international banks alongside SMBC. The transaction involves construction and facilities management of a new health campus with 1,550 beds in the southern city of Adana, Turkey. ADN PPP Saglik Yatirim A.S., an SPV, is going to construct the hospital buildings in a 3-year time frame and then manage the facilities for a period of 25 years against availability payments from the Ministry of Health, Turkey. The transaction is executed under the Turkish Healthcare PPP law. Turkey, a member of ICIEC since 1997, is undertaking substantial reforms in the health sector (Healthcare Transformation Program) in the last 12 years. Turkey is planning to invest USD 10 billion in the healthcare infrastructure. For the first time, the Public Private Partnership (PPP) model is being used to construct and run integrated health campuses around the country. ICIEC’s support to the transaction is in line with its strategy of supporting member countries’ infrastructure development and increasing human welfare.

Metro Project, Turkey ICIEC provided NHSO (Non-Honoring of Sovereign Financial Obligations) coverage to a foreign bank for their financing of a Metro line in Istanbul amounting to EUR 113 million with 5 years tenor. The project contributes to the development of public transport in Istanbul having a population of 15 million. The first fully driverless electric metro in Turkey.

Collaboration with Turk Eximbank Doala Japoma Sports Complex Project in Cameroon Collaboration with Turk Eximbank ICIEC provided USD 190.4 million cover to Turk Eximbank against the risk of non-honouring of sovereign financial obligations (NHSO) related to their financing of Doala-Japoma project in Cameroon for a tenor of 12 years. Yenigun Insaat, one of the leading construction company in Turkey, builds a sports complex, which will host the 2019 Africa Cup of Nations. The project, financed by Turk Eximbank, will be Cameroon’s largest sports complex.

Collaboration with Turk Eximbank- Projects Underway Senegal Market of National Interest & Truck Station Project Senegal Congress Center Project

Turkey’s Opening to Africa Turkey currently has 40 embassies in Africa and 33 African countries have diplomatic missions in Turkey. Turkish Airlines flies to 51 destinations in 33 countries in Africa. Turkish construction companies are major players in the continent. Share of African countries in the overall international business volume of Turkish contractors is around 18%. Turkish contractors have constructed over 1,000 projects in Africa which is amounting approximately USD 64.2 billion. ICIEC protects Contractors’ equity, mobilization works and project income on one hand and provides risk mitigation to financial institutions for the financing of these projects on the other hand. ICIEC’s risk mitigating solutions will continue to support contractors and investors as an important tool for accessing new markets. Source: www.mfa.gov.tr, www.ekonomi.gov.tr

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