DANISH INTERNATIONAL INVESTMENT FUNDS IFU AND IØ Danish International Investment Funds The Investment Fund for Central and Eastern Europe Bremerholm Copenhagen K Phone: Fax: Website: Piotr Lemieszek and Zbigniew Gluchowski Warsaw Advisory Office

DANISH INTERNATIONAL INVESTMENT FUNDS IFU AND IØ The Investment Fund for Central and Eastern Europe – IØ Basic Facts Created by Act of Danish Parliament in 1989 National tie Various sectors Equity: EUR 230 million 400 projects in 18 countries 151 active projects EUR 640 million invested since 1990 Countries of operation: IØ: Russia, Ukraine and Belarus IFU: other CIS Phasing out

DANISH INTERNATIONAL INVESTMENT FUNDS IFU AND IØ Principles of investment A Danish company shall participate with a larger exposure than IØ’s Investments: up to EUR 7 million in one project IØ’s investment cannot exceed 30% (50%) of the total investment Share capital and/or loan

DANISH INTERNATIONAL INVESTMENT FUNDS IFU AND IØ Equity Investments Share capital IØ’s exit - sale to partner (willing buyer – willing seller or put-call options) - public listing / stock exchange - sale to third parties (seldom!) Subordinated loans Equity loans

DANISH INTERNATIONAL INVESTMENT FUNDS IFU AND IØ Loans and Guarantees Project loans - hard currency: DKK, EUR - commercial terms: 6-months floating rate (CIBOR, LIBOR) + a risk premium (2% - 6% for Ukraine) - up to 5 years - non-recourse, local collateral Guarantees - commercial terms

DANISH INTERNATIONAL INVESTMENT FUNDS IFU AND IØ 400 Projects Distributed by Host Countries

DANISH INTERNATIONAL INVESTMENT FUNDS IFU AND IØ IØ’s presence in Ukraine Preparations to establish Kyiv Adviser Office in the 2 nd half of 2006 Advisers: - Kyiv - Lviv Portfolio of 21 projects (18 active), mostly in Western Ukraine Total investments contracted EUR 15 million Growing pipeline of projects Network of Danish companies in Ukraine

DANISH INTERNATIONAL INVESTMENT FUNDS IFU AND IØ 21 projects in Ukraine Rapid growth of portfolio in the last two years 9 new projects in 2005 Total investments contracted in 2005 – EUR 4.6m Total accumulated number of projects

DANISH INTERNATIONAL INVESTMENT FUNDS IFU AND IØ 21 Projects Distributed by Sector Approx. 20 agri-projects in CEE/CIS incl. 13 in pig production, incl. 3 existing in Ukraine plus approx. 4 in the pipeline

DANISH INTERNATIONAL INVESTMENT FUNDS IFU AND IØ IØ’s typical agricultural project – key figures Pig production 3,000 sows 72,000 slaughter pigs p.a. = 5,800 tons of pork p.a. ( such farms would provide the total demand of Ukraine for pork) Turnover: EUR 12 million p.a. 56,000 cubic meters of slurry p.a. 2,400 ha necessary to comply with EU environmental regulations farm buildings ca. 60,000 m2 Investment budget ca. EUR 10 million Financing: Equity: EUR 4 millionDanish partner: EUR 3 million IØ:EUR 1 million Loans: EUR 6 millionDanish partner/banks/IFI :EUR 4 million IØ: EUR 2 million

DANISH INTERNATIONAL INVESTMENT FUNDS IFU AND IØ Danish project owner and management local staff, skills and training local co-investors, landowners lease or ownership of land, alternatively slurry contracts duration vs. maturity of financing structure of ownership, registered titles, concentration lease or ownership of buildings, collateral local climate conditions and soil characteristics CSR, environmental and animal welfare requirements permits, bureaucracy, inspections regulatory framework: import tariffs and quotas VAT on capital investments import of live animals and inputs value chain and vertical integration availability of local bank financing potential for rape seed and bio-fuels production IØ’s typical agricultural project – other issues

DANISH INTERNATIONAL INVESTMENT FUNDS IFU AND IØ Thank you for your attention

DANISH INTERNATIONAL INVESTMENT FUNDS IFU AND IØ Legal Mandate The objective of Denmark's support to Danish investments in Central and Eastern European countries is to assist the reformist forces in these countries in achieving increased economic growth and development of trade and industry as well as to foster closer economic co-operation between Denmark and Central and Eastern Europe for the benefit of the East-West relationship in general as well as Danish business and employment.

DANISH INTERNATIONAL INVESTMENT FUNDS IFU AND IØ Purpose of Operation: Mission, Vision and Strategy MISSION: To enhance global economic growth, development and more equitable income distribution through increased global flow of socially and environmentally responsible, productive investments making optimal use of comparative advantages VISION: To contribute through information and advice in connection with co- investments to enhance Danish enterprises’ active participation in the global flow of productive investments towards developing and reform countries. STRATEGY: To become known, recognised and used by all relevant Danish enterprises as a competent provider of know-how, experience and external financing as well as their most preferred investment partner in developing and reform countries.

DANISH INTERNATIONAL INVESTMENT FUNDS IFU AND IØ Danish International Investment Funds