Role of ATI in Zimbabwean Economy May, 2018

Presentation Outline ATI Facts ATI Solutions Sample Transactions Benefits to Zimbabwe

Part 1: ATI Facts

ATI’s Story In 2001, seven African countries came together to understand how to attract more FDI. Their World Bank-backed study showed political risks to be the biggest single factor deterring inwards investments. This study led to the creation of the African Trade Insurance Agency (“ATI”). ATI is registered with the UN as a multilateral Organization. ATI offers a range of insurance products focused on increasing trade and investments. ATI has both a commercial and a developmental mandate aimed at profitability (with dividends paid back to member states) whilst simultaneously improving the business climate in ATI’s member countries. As of YE 2017, the combined population of ATI’s member states is 483 million and ATI insured annual trade and investments equal to US$2.4 B or c.1% of GDP in average member countries every year.

Milestones Pooled capital structure sees ATI underwrite its first significant transactions SACE, Italy’s Export Credit Agency (ECA) becomes the first European ECA member The European Investment Bank partners with ATI on an energy initiative UKEF, Ethiopia and Zimbabwe become members 2001 2006 2007 2009 2012 2013 2014 2016 2017 ATI reaches US$1 B exposure threshold & Kenya-Re becomes a member Côte d’Ivoire becomes the 2nd W. African member country & ATI exposure exceeds US$2 B threshold African Development Bank and Benin become members ATI is created, 7 Presidents sign ATI’s treaty in Kampala ATI receives S&P credit rating, A/Stable. ATI maintains the A rating to present

Current & Prospective ATI Member Countries ATI Member states Benin Burundi Côte d’Ivoire Democratic Republic of Congo Ethiopia Kenya Madagascar Malawi Rwanda South Sudan Tanzania Uganda Zambia Zimbabwe Actively considering membership Angola Burkina Faso Cameroon Liberia Mali Mozambique Niger Nigeria Gabon Ghana Senegal Sierra Leone

Africa’s fastest growing economies 5 of the 10 fastest growing large economies in Africa are ATI member states (Data from AfDB-2018, and IMF World Economic data for 2017) On average ATI now insures trade & investments equal to around 1% of GDP annually in it’s member countries

Current Corporate Members ATI also has non-country members who include African Development Bank (AfDB) African Reinsurance Corporation (Africa Re) Atradius Participations Holding Kenya Reinsurance Corporation The Common Market of Eastern and Southern Africa (COMESA) Trade and Development Bank (TDB) Zep Re SACE UK Export Finance (UKEF) As at YE ‘17 ATI’s total equity was US$ 242 M

2017 Key Results As of 31 December, 2017 Shareholders’ Capital (management accounts) Gross Written Premium US$ 44.85 million (+ 52%)   Net Earned Premium US$ 13.8 million (+ 20%) Gross Exposure US$ 2.4 billion (+ 26%) Net Exposure US$ 0.9 billion (+ 13%) Profit US$ 10 million (+ 31%) – on a comparable basis Shareholders’ Capital US$ 225.9 million (+12%)

ATI gross exposure trends ATI believes the best way to measure ATI’s impact is by looking at the gross exposure insured annually by ATI. In the last five years this has grown from US$1 billion annually to US$2.4billion in 2017 and the growth trend if anything is projected to accelerate The product lines above show PRI being political risk (sovereign payment and breach of contract / expropriation risk), CRI being private sector credit risk (payment risk on corporates, NB this is a risk that MIGA cannot insure) and PVT&S being political violence & terrorism risk, which is the only declining exposure for ATI (due to sufficient private sector insurance capacity)

Part 2: ATI Solutions

The Risks That ATI Can Cover ATI can insure the entire spectrum of debt or equity investments in African member states Investment (Political) risks Non-honouring of sovereign & sub sovereign obligations & debts Confiscation, Expropriation, Nationalization Arbitration award default Currency inconvertibility War, Civil War, Terrorism Commercial risks Insolvency Non payment (“protracted default”) Refusal to pay Performance risks Contract bonds (bid bonds, performance bonds etc.)

ATI’s Products Surety Bonds Investment Risk Insurance Protects against sovereign non-payment risks or unfair action or inaction by a government that would negatively affect business or investments (e.g. expropriation, breach of contract) Credit Insurance Non-payment or delayed payment to lenders or to suppliers of goods or services by a public or private buyer, whether in member states or with trade partners Political Violence, Terrorism & Sabotage Insurance Protects investors against financial losses in the event of political violence, war or terrorism Surety Bonds Bid bonds, Advance payment risks, Performance, Customs & Warehousing Breach of Contract Insurance for Energy Projects ATI has a large suite of dedicated products for the energy sector that insure against the non-honouring of sovereign obligations from a public utility

ATI’s Value Added for African Governments ATI absorbs the risks of changing or uncertain regulatory regimes Project investors are often wary of uncertain and changing regulatory risks in African countries, which can negatively impact investments. ATI's cover helps mitigates these concerns. ATI actively helps avoid claims or losses ATI is a trusted government partner and advocates on behalf of private sector investors to improve structures & contracts and ultimately to prevent claims and losses. In this way ATI acts as an intermediary, ultimately working to improve the investment climate in member states

ATI’s Value Added for African Govts. (cont’d) ATI’s solutions can be used as an alternative to Sovereign Guarantees Many ATI member states are restricted by an inability to issue sovereign guarantees because this increases their national debt. ATI’s products can be used as an alternative to enhance or substitute for sovereign letters of comfort or guarantees ATI insures loans to State-owned enterprises Historically, some parastatals have had challenges impeding their ability to attract financing. ATI’s products gives comfort to investors and lowers financing or investment costs.

ATI’s Value Added for Zimbabwean Domestic Banks ATI works on both sides of the risk spectrum for local banks (insuring their risk, and loans they make) ATI can insure the default risk of local banks and thus allow them improved access to international hard currency finance ATI also works with local lenders to de-risk their balance sheet ATI’s insurance solutions can be used as alternative/additional collateral - easier to realize than land & buildings & frees up liquidity Basel regulations allow lenders to substitute the risk of the borrower with ATI’s risk and this frees up capital For local banks, this levels the playing field allowing them to compete with international banks ATI products allow local banks to expand their lending portfolio and ATI also has dedicated SME lending products

ATI’s Value Added for Exporters ATI can insure exports Whilst ATI’s primary focus is inwards investment (FDI), ATI also works as a potential ECA ATI helps exporters expand to new markets & customers ATI can insure an exporter’s Whole Turnover (i.e. accounts receivables) or single transaction risk The same is true for exporters to Zimbabwe who face local credit risk: ATI’s products can mitigate these risks allowing trade to flow

Part 3: Sample Transactions

Projects: Support to Mining Sector Minerals backed receivable financing Lending by two African DFIs to the Central Bank to support the mining sector: - Revolving Gold Export Receivables-Backed Facility to support RBZ’s procurement of gold; - Resource-Backed Facility for procurement of mining equipment and consumables to retool and re-equip qualifying mining companies; Cumulative Transaction Value: USD715 M

Projects: Financial Services Distressed Banks Portfolio Lending by one African DFI to rehabilitate the distressed Banks’ portfolio by the Reserve Bank and the Government of Zimbabwe. Total Insured Loan = USD45m

Projects: Energy Power Stations Rehabilitation Facility to finance capex/refurbishment of both Kariba South Power Station and Hwange Power Station. ATI insured an African DFI and an African commercial bank against the risk of nonpayment of the loan Total Transaction Value: USD60m

Part 4: Benefits to Zimbabwe

Benefits to Zimbabwe Access to competitive financing ATI: A Powerful Partner Benefits to Zimbabwe Access to competitive financing Help local banks, companies & SMEs access finance Insurance cover reduces interest rates on sovereign financing, reducing debt costs Critical factor for many equity investments Economic diversity Insurance cover increases investor confidence, helping diverse sectors access goods and capital to expand More easily realize priority projects With ATI support from the start of a project, member states can access a network of international partners ATI insurance policy Lowered cost of investment / finance Better investment proposition with reduced chance of default Good performance track-record encourages further investment Equity Investment or Financing ATI’s Virtuous Circle

ATI could be a significant partner Country Share Capital Cumulative Insured Exposure GDP (2017) Cumulative Values Current Exposure Equity / Cumulative Exposure (at YE '17) US$ '000 (at YE'17) US$ '000 US$ BN as % of 2017 GDP as % of GDP Benin* 13,900 47,883 37,432 8.8 0.5% 0.4% 344% Burundi 15,300 142,954 6,535 3.4 4.2% 0.2% 934% Cote d'Ivoire* 13,500 5,000 36.9 0.0% 37% DRC 19,200 992,541 157,710 41.1 2.4% 5,169% Ethiopia* 6,900 280,000 121,125 78.3 4,058% Kenya 29,300 11,899,794 855,389 75.1 15.8% 1.1% 40,614% Madagascar 1,000 86,460 2,177 10.4 0.8% 8,646% Malawi 17,200 1,048,447 124,108 6.2 16.9% 2.0% 6,096% Rwanda 8,700 649,862 153,311 8.9 7.3% 1.7% 7,470% S. Sudan* 7,800 4.8 0.1% 64% Tanzania 12,700 1,317,329 154,010 51.2 2.6% 0.3% 10,373% Uganda 22,900 3,547,781 213,476 27.2 13.0% 15,492% Zambia 16,900 2,601,430 316,875 23.1 11.3% 1.4% 15,393% Zimbabwe* 12,800 334,866 166,676 15.3 2.2% 2,616% Total 198,100 22,959,346 2,318,824 390.7   Average (excluding recent member countries) 8.3% 0.9% 12,243% * Recent ATI member countries, thus excluded from averages

ATI West African Regional Headquarters ATI Southern Africa Office ATI Contacts ATI Headquarters Kenya-Re Towers | Upperhill, Nairobi underwriting@ati-aca.org ATI West African Regional Headquarters Cotonou, Benin - pending ATI Tanzania Office 1st Floor, Private Sector Hs. | Mwaya Rd. Dar es Salaam tanzania@ati-aca.org ATI Uganda Office Workers House, 9th Floor Southern Wing Plot 1 Pilkington Rd Kampala uganda@ati-aca.org ATI Southern Africa Office Kwacha House Annex | Cairo Road Lusaka zambia@ati-aca.org