Islamic Corporation for the Development of the Private Sector (ICD)

Islamic Corporation for the Development of the Private Sector (ICD)
Member of the Islamic Development Bank Group (IDB) October, 2014 IsDB Group

TABLE OF CONTENTS ABOUT ICD ICD STRATEGY AND GOALS
FUNCTIONAL FLOW & BREAKDOWN CURRENT PORTFOLIO INVESTMENT CRITERIA INVESTMENT PROCESS FLOW PARTNERSHIPS SENIOR MANAGEMENT SUCCESS STORIES

ICD’S MISSION IS TO PROMOTE PRIVATE SECTOR DEVELOPMENT IN MEMBER COUNTRIES
ICD is a multilateral financial institution with an authorized capital of USD 2.0 billion. ICD shareholders consist of the IDB, 52 member countries, and five public financial institutions. Headquarters in Jeddah, ICD was established in 1999 by the IDB Board of Governors with a mandate to promote growth and development in member countries through the provision of Sharia compliant financing to feasible and viable private sector projects. ICD operates to complement the activities of IDB in member countries and also that of national financial institutions. The mandate of ICD is to support economic development of member countries by providing financial assistance to private sector projects in accordance with the principles of Islamic Sharia Vision To become a leading multilateral Islamic financial institution dedicated to the development of the private sector in member countries ICD also strives to encourage the development and promotion of Islamic financial markets and capabilities in member countries ICD targets private sector projects that are financially and economically viable and have a significant developmental impact through job creation and export potential enhancement. ICD also encourages and facilitates the channeling of foreign investment into member states, and provides advice to governments and private enterprises when needed

A SIZEABLE GLOBAL FOOTPRINT
WEST & EAST AFRICA C. ASIA & EUROPE Benin Burkina Faso Cameroun Chad Comoros Isles Cote d’Ivoire Djibouti Gabon Gambia Guinea Guinea Bissau Mali Mozambique Niger Nigeria Senegal Sierra Leone Sudan Uganda Albania Azerbaijan Kazakhstan Kirgizstan Tajikistan Turkey Turkmenistan Uzbekistan EAST ASIA Bangladesh Brunei Indonesia Malaysia Maldives Pakistan South America MENA REGION Suriname Algeria Bahrain Egypt Iran Iraq Jordan Kuwait Lebanon Libya Mauritania Morocco Palestine Qatar Saudi Arabia Syria Tunisia U.A.E Yemen 52 member countries, representing 1.5 billion people

ICD SCOPE OF OPERATIONS
WHAT WE DO Investing in and financing private sector projects, in addition to providing advisory services to public and private sector actors in member countries Business lines: Business Development & Partnerships Financial Institutions Development Direct Investments & Financing Advisory & Asset Management OUR REACH 4 offices covering MENA, Africa, Asia and CIS Over 100 international investment and financial professionals Extensive network of partner MDBs and financial institutions OUR PORTFOLIO USD2.6 BN in approved investments between 2000 and 2013 Over 260 investments and financial transactions in 40 countries since inception

ICD COVERAGE TEAMS ON THE GROUND IN 4 CONTINENTS
Mamadou Barro (Regional Manager for Africa Coverage) Momar Gueye (Africa Coverage) Samir Nadir Taghiyev (Europe & CIS Coverage) Jamshid Akhmedov (Uzbekistan Coverage) Ahmed Bin Abdul Khalid (Head Asia Coverage) NoorAzmi Mohd Razalli (Asia Coverage) Farid Masmoudi (Director) Ariff Shafzan Bin Hasan (Partnership & Syndications) Chahir Ben Halima (MENA Coverage) Cyndo Obre (MENA Coverage) Atiq Nakrawala (Associate Coverage) Ali Camlioglu (Associate Coverage) Regional Office in Kuala Lumpur Head Office in Jeddah Coverage Team Regional Office in Dakar Regional Office in Almaty Over 100 Investment Professionals and Bankers covering: FIDD DIFD ASAM Products Teams

COMPREHENSIVE STRATEGY & PROGRAM
ICD’s strategic objective is to promote private sector development in member countries by building and promoting Islamic financing capabilities and facilitating enterprise access to this financing Strategic Operational Framework Building Islamic Finance Channels Selective Direct Investments Building an Enabling Business Environment Building Partnerships By establishing and investing in the following types of institutions: Islamic Banks Ijara Companies Takaful Companies Mortgage Companies Investment Companies By providing growth capital to enterprises: Equity Financing: Musharaka (Equity) Quasi Equity Term Financing: Installment Sale Leasing Profit Sharing Deferred Delivery Istisna’a Murabaha Purchase and Lease Back Diminishing Musharaka By providing advisory services to governments and private sector actors with a focus on: Restructurings Islamic Finance Special Economic Zones Raising and managing PE funds Privatization SME Advisory By building a substantial network of MDBs and private sector financial institutions and leveraging this network to develop business opportunities and to mobilize and channel to member countries.

AMBITIOUS AND PROGRAMATIC OBJECTIVES
Encourage cross-border investments Promote private-sector development in member countries Provide and promote Islamic finance services and products Stimulate competition & entrepreneurs- hip in member countries Support the creation of an enabling business environment Stimulate economic and social progress in member countries Strategy 1440 H / 2020 G Generate 1 million new job opportunities in member countries Facilitate access to finance for 1 million low income individuals in member countries Build and develop 50 Islamic financial institutions Improve overall business environment in 10 member countries Mobilize up to 70% projects’ investment needs from the market Objectives 1440 H / 2020 G

ORGANIZATIONAL STRUCTURE
BUSINESS DEVELOPMENT & PARTNERSHIPS (BDPD) ORIGINATION SYNDICATION Deal sourcing and origination Initial project screening and evaluation Client relationship management Partnerships development and follow-up Syndications and fundraising FINANCIAL INSTITUTIONS DEVELOPMENT (FIDD) DIRECT INVESTMENTS & FINANCING (DFID) Advising governments and public and private enterprises Asset management Conventional-to-Islamic bank conversions ADVISORY & ASSET MANAGEMENT (ASAM) CONSULTING ASSET MGMT INST. EQUITY LINES OF FINANCE EQUITY TERM FINANCE Islamic banks Ijara companies Investment companies Finance companies Takaful Murabaha Wakala Plain equity Mezzanine facility Ijara Murabaha Diminishing Musharaka Istisna’a

ICD: DEVELOPING ISLAMIC BANKS
ICD extends its own reach by setting up, investing, financing and providing expert advice to other Islamic Banks in its Member Countries. Tamweel Africa Holding FOCUS OF ISLAMIC BANKS USD 30.6 M USD 40.8 M USD 9.6 M The objective is to develop Islamic Financing Channels by promoting and developing financial institutions. These institutions acts as financial channels for ICD and provide a multiplier effect on the investment dollars. The focus is to develop the market by establishing and investing in the following type of institutions through control and non-control positions. ICD has invested in banks in Pakistan, West Africa (via investment in a holding company), Yemen, Sudan, Maldives and Kazakhstan. Equity Equity Equity Financial Sector Financial Sector Financial Sector Pakistan Senegal Yemen Islamic Bank of Niger Islamic Bank of Mauritania Islamic Bank of Guinea USD 2.2 M USD 26.3 M USD 2.6 M Equity Equity Equity Financial Sector Financial Sector Financial Sector Niger Mauritania Guinea Islamic Bank of Senegal USD 3.0 M USD 3.4 M USD 10.8 M Equity Equity Equity Financial Sector Financial Sector Financial Sector Senegal Sudan Maldives USD 3.4 M Equity Financial Sector Kazakhstan

ICD: DEVELOPING OTHER ISLAMIC FIs
ICD also extends its own reach by setting up, investing, financing and providing expert advice to other Islamic Financial Institutions in its Member Countries. FOCUS ON ISLAMIC FINANCIAL INSTITUTIONS USD 4.9 M Equity KSA Equity Financial Sector Uzbekistan USD 5.0 M USD 6.2 M Equity Financial Sector Azerbaijan ICD also invests in other Islamic Financial Institutions in order to promote the development of Islamic Finance as a viable alternative to conventional finance As with banks, investing in these financial institutions will have a multiplier effect and increase the total assets in Islamic products in member countries Currently, there is a lack of such Institutions in the Islamic countries and Sharia compliant FIs are needed to finance private sector The objective is to go beyond basic banking and develop non-banking FIs (e.g. Ijara, takaful) and continue to provide the market with access to innovative Islamic products Financial Sector USD 6.0 M Equity Financial Sector Sudan Arab Leasing & Investment Company Albania Leasing USD 1.7 M Equity Financial Sector Albania Kazakhstan Ijara Company USD 10.0 M Equity Financial Sector Kazakhstan Ijara Palestine Company USD 1.3 M USD 1.0 M USD 2.0 M Equity Equity Equity Financial Sector Financial Sector Financial Sector KSA / Bahrain Palestine Tajikistan

ICD: PROVISION OF LINES OF FINANCE
ICD also extends its own reach by setting up, investing, financing and providing expert advice to other Islamic Financial Institutions in its Member Countries. LINES OF FINANCE Turkey USD 20.0 M Financial Sector Turkey USD 20.0 M Financial Sector Turkey USD 20.0 M Financial Sector Azerbaijan USD 26.5 M Financial Sector Indonesia USD 21.3 M Financial Sector ICD also provide Lines of Financing to institutions in order to meet common business and social objectives especially the small and medium enterprise (SME) sector Uzbekistan USD 12.0 M Financial Sector Tajikistan USD 11.5 M Financial Sector Uzbekistan USD 21.0 M Financial Sector Uzbekistan USD 16.0 M Financial Sector Uzbekistan USD 11.0 M Financial Sector Uzbekistan USD 11.0 M Financial Sector Azerbaijan USD 10.0 M Financial Sector Yemen USD 5.0 M Financial Sector Uzbekistan USD 10.0 M Financial Sector Uzbekistan USD 10.0 M Financial Sector Uzbekistan USD 8.0 M Financial Sector Mauritania USD 2.0 M Financial Sector Mauritania USD 3.0 M Financial Sector Azerbaijan USD 3.0 M Financial Sector Nigeria USD 80.0 M Financial Sector Global Line of Financing Nigeria

ICD: DIRECT EQUITY INVESTMENT
Apart from investments in financial institutions, ICD supports the development of member countries by investing in companies seeking capital expansion. SCOPE OF SERVICES SECTORS Selective Greenfield and Operating Companies investments that have a strong equity story with a potential of major development benefits Equity investment can be through capital increases or buyouts Types of equity investments: Plain Equity Quasi-equity Hybrids (convertible) ICD added value through active participation in the companies’ boards to support business effectiveness and corporate governance Other Sectors Healthcare & Pharmaceutical Industrial & Manufacturing Telecom & Technology Saudi Arabia Equity Real Estate USD 69.0 M USD 25.5 M Healthcare Saudi Arabia USD 4.0 M Equity Industrial Bahrain USD 10.0 M Equity Telecommunication Indonesia USD 25.0 M Equity Real Estate Mauritania MMI USD 5.8 M Equity Healthcare Saudi Arabia USD 10.0 M Equity Cement Sudan 2005, 2010 Technology USD 12.5 M Equity Regional (UAE) USD 45 M Equity Yemen USD 10.7 M Equity Pharmaceutical Jordan USD 9.5 M Equity Industrial Sector Egypt Santé Alexandra)

ICD: PROVISION OF TERM FINANCING
ICD extends Term Finance to clients for capital investments aiming at expansion of existing enterprise, establishment of a new enterprise and project implementation. SCOPE OF SERVICES SECTORS ICD provides term financing for Greenfield and Brownfield projects in healthcare, infrastructure, ICT and industrial sectors ICD can act as a lead arranger or participant in such term financing projects The average size of such financing is between US$ million with a tenure of 4-8 years Minimum size of US$ 5 million Term finance can be provided through: Non-recourse borrowing (project finance) With-recourse borrowing Other Sectors Healthcare & Pharmaceutical Industrial & Manufacturing Energy /Oil & Gas USD 20.0 M Maldives Food & Fisheries Horizon Fisheries Project USD 6.0 M Healthcare Kuwait USD 25.0 M Bangladesh Industrial & Manufacturing TAB Rig Company USD 43.0 M Oil & Gas Libya USD 25.0 M Turkey Retail USD 13.0 M Healthcare Saudi Arabia USD 25.0 M Pakistan Industrial & Manufacturing USD 15.0 M Power Bangladesh USD 13.0 M Real Estate Gambia Royal Atlantic Residence USD 10.0 M Healthcare Saudi Arabia Middle East Healthcare Company USD 26.9 M UAE Industrial & Manufacturing

ICD: ADVISORY SERVICES
ICD has put together a team of highly experienced investment bankers to support Advisory transactions. Making available of its full resources to ensure a successful outcome of any transaction it undertakes. SCOPE OF SERVICES ICD provides a wide variety of advisory services to governments, public entities and private entities of member countries in order to help create the right environment to facilitate private sector investment and also to assist companies in achieving their potential Range of Services for Government Privatization Public Private Partnership (PPP) Project Finance Advisory Government Sukuk Capital Raising Development of Islamic Capital Markets Development of Business Environment for SME Range of Services for Private Sector Strategic Advisory / Restructuring Advisory Access to Growth Capital Project Finance Advisory Development of Islamic Financial Institutions

(Unit Investment Fund)
ICD: ASSET MANAGEMENT ICD establishes and develops specific Funds to support the growth of targeted sectors in its member countries. SCOPE OF SERVICES ICD supplements its own balance sheet by sponsoring / creating private equity funds as well as other special purpose vehicles in order to provide the IDB Group and other investors with access to projects that provide commercial returns as well as meet the developmental needs of member countries ICD acts as a fund manager and/or general partner with other fund managers to sponsor and create special purpose vehicles along with third party investors including but not limited to IDB and ICD; other Multilateral Agencies; Sovereign Wealth Funds; Government Funding Vehicles and High Net Worth Individuals USD 250 M Investments in Member Countries Regional UIF (Unit Investment Fund) USD 107 M Private Equity Saudi SME Fund SMEs in KSA USD 16 M Tunisian SME Fund Private Equity SMEs in Tunisia USD 200 M Short Term Investments Money Market Fund Shariah liquidity management tool for FIs and Corporates USD 600 M Agribusiness Sector ICD Food & Agriculture Fund Agri-related Investments In Member Countries

RAPID RAMP-UP OF INVESTMENT PORTFOLIO SINCE INCEPTION
Total approved investments between 2000 and 2013 totaled USD 2.59 billion Total Approvals (USD ‘ Million) Approvals Per Sector ~40% CAGR Total disbursements to date reached USD billion Sources: ICD Annual Report

HEALTHY DIVERSIFICATION ACROSS REGIONS, SECTORS AND MODES OF FINANCING TO DATE
Summary of Activities – to date Investment Approvals by Type – to date Investment Breakdown by Region – to date Since inception, ICD approved 243 investments for a total capital commitment of USD 2.59 billion. Equity, Murabaha, and Ijara transactions constituted the bulk of ICD’s investment allocations. MENA region dominated ICD’s portfolio allocation in the early years, but focus on other regions is growing significantly. In addition to capital injections, ICD investment transactions involved significant levels of institutional support and knowledge transfer. Investment Disbursement by Type – to date Sources: ICD Annual Report

TERM / PROJECT FINANCING
INVESTMENT CRITERIA GENERAL REQUIREMENTS EQUITY INVESTMENTS TERM / PROJECT FINANCING ICD’s investment operation is generally sector-agnostic and open to opportunities in various stages of maturity and various financing requirements and needs. All in all, opportunities must meet the following minimum requirements: Majority private sector ownership Based in member-country Shariah compliance Compelling opportunity Financial feasibility Competent/credible sponsors and management Acceptable legal structure Clear/compelling developmental impact Maximum participation of 33% of investee’s capital Clear exit strategy within 3 to 5 years of investment (extendable to 7 years in exceptional cases) For green-field projects, up to 40% of project investment costs; for expansion of existing projects, up to 60% of project investment costs Tenure of up to 8 years including grace period Minimum size of USD 5 million Acceptable security and guarantees include: Mortgages / Pledges Assignment of receivables Corporate guarantee from parent companies Personal guarantee Bank guarantee

INVESTMENT PROCESS SUMMARY
KEY EXECUTION PHASES ORIGINATION & PRELIMINARY ASSESSMENT PROJECT APPRAISAL INVESTMENT COMMITTEE APPROVAL EXECUTIVE COMMITTEE APPROVAL EFFECTIVENESS & DISBURSEMENT MONITORING & EVALUATION PROJECT CLOSING Projects are sourced either directly through ICD’s BDPD team or directly submitted by clients. Initial assessment is conducted by BDPD and is done to ensure with ICD’s mandate and investment criteria. After initial clearance by BDPD, the relevant execution department, and ICD Investment Committee, ICD conducts a project appraisal that produces a Due Diligence Report and an Indicative Term Sheet. The final Due Diligence Report and the indicative term sheet are presented to the ICD’s Investment Committee for clearance and approval. The final financing conditions and the final project information memo are presented to the Executive Committee for final approval on behalf of the Board of Directors. Effectiveness of the project is declared after satisfactory compliance of all legal requirements are met. Disbursement occurs upon declaring the effectiveness. The follow up team of ICD closely monitors the implementation stages. The follow up team tracks the financial performance and developmental results of the projects. ICD closes the books on the project when the investment is repaid in full or when the corporation exits by selling its equity stakes. ~ 6-8 Weeks ~ 8 – 24 Weeks ~ 3 – 5 Years 1 2 3 4 5 6 7

EXTENSIVE PARTNERSHIP NETWORK OF LEADING MDBs AND DFIs

EXPERIENCED & DISTINGUISHED LEADERSHIP
Mr. Khaled Mohamed Al-Aboodi CHIEF EXECUTIVE OFFICER & GENERAL MANAGER 20 YEARS OF EXPERIENCE IN THE INTERNATIONAL DEVELOPMENT FINANCE INDUSTRY Mr. Al-Aboodi started his professional career with the Ministry of Finance & National Economy of Saudi Arabia in 1982 as an Economic Researcher, then as a Director of the Environment Unit, and later as an Acting Director of the International Financial Institutions Department. In 1995 he moved to Washington DC where he served as Assistant to the Saudi Executive Director at the World Bank. He was later appointed Alternate Executive Director for Saudi Arabia at the World Bank Board until In 2000, he joined the Saudi Public Investment Fund (at the Ministry of Finance) as a Senior Economist where he was in charge of several privatization operations. Mr. Khaled Al-Aboodi holds a Bachelor’s Degree in Economics from King Saud University, Riyadh (1982), and a Master’s Degree in Economics from Northeastern University, Boston, USA (1987). “ ICD realizes that the role of forward-looking and well-supported private sector in achieving an inclusive development has never been more fundamental ”

CASE 1: LEVERAGE THROUGH SYNDICATION
ICD acted as Lead Arranger in raising debt for the construction of a steel plant in Mukalla, Yemen; The total project cost was of USD172m and ICD syndication amount of USD48m; ICD was able to mobilize two other development agencies to participate: OPEC Fund for International Development; Arab Fund for Economic and Social Development Project Sponsors Yemen USD124m Equity contributions USD48m syndicated loan divided between the three participants Creation of 700 jobs and an increase in the supply of steel in Yemen

CASE 2: PROMOTING INFRASTRUCTURE DEVELOPMENT
ICD and AfDB have provided financing of US$10m for the construction of a bulk terminal in Djibouti; The marine terminal had a capacity of processing 1 million tons per year of farm inputs and grain. It covers an area of 42,000 m2 at the Port Autonome International and is managed by the SDTV; The terminal allows the processing of inputs and grain to Ethiopia and the sub-region Sponsor Djibouti US$20m Equity contribution US$10m Syndicated loan (ICD US$4m & AfDB US$6m) Lower cost of farm inputs & grain in Djibouti and Ethiopia by reducing storage costs

CASE 3: ISLAMIC BANKS IN FRONTIER MARKETS
ICD in partnership with Bank Asya Tamweel Africa has created a holding company that invests in and manages a portfolio of Islamic banks. It has also developed the necessary synergies to increase the network of Islamic banks in Africa ICD has invested USD 33m (60% stake in Tamweel Africa) in four banks: Senegal, Niger, Mauritania and Guinea 60% 40% 50.5% 68.8% 50.0% 100.0% Fostering and Developing Shariah Compliant Banks in West Africa

CASE 4: PROMOTE THE DEVELOPMENT OF SMES
ICD provides credit lines to financial institutions. 1 Financial institutions grant medium-term financing for the development of SMEs or for their working capital. 2 INVESTORS 4 SMEs repay the medium-term financing and then financial institutions repay ICD 3 Other investors may participate in the operation, by appointing ICD as an agent 4 1 This program allows: Increased funding for SMEs in Asia Funding for several SMEs in member countries Funding of more than 5,000 motorcycles funded PT Mandala Multifinance Indonesia 2 3 2 3 2 3 2 SME SME SME Fostering and enhancing Private Sector in Member Countries

BDPD TEAM Business Development & Partnerships Department (BDPD)
Farid Mohamed Masmoudi Director - Global Head BDPD Business Development Coverage Syndications & Partnerships MENA Africa Asia CIS Europe Syndications Chachir Ben Halima Senior Associate (MENA Coverage) Mamadou Barro Manager (Africa Coverage) Ahmed Bin Abdul Khalid Head of Asia (Asia Coverage) Samir Nadir Taghiyev Principal (CIS Europe Coverage) Ariff Hasan Principal (Syndications) Cyndo Obre Senior Associate (MENA Coverage Momar Gueye Associate (Africa Coverage) NoorAzmi Mohd Razalli Associate (Asia Coverage) Jamshid Akhmedov Associate (Uzbekistan Coverage) Arabic Speaker French Speaker English Speaker Bahasa Speaker Russian Speaker

Business Development Coverage Syndications & Partnerships
BDPD CONTACT INFO Farid Masmoudi Director – Global Head Tel : Business Development Coverage Chahir Ben Halima Senior Associate – MENA Tel : Mamadou Barro Manager – Africa Tel : Ahmed Bin Abdul Khalid Head – Asia Tel : Samir Nadir Taghiyev Senior Associate - CIS Tel : Cyndo Obre Associate – MENA Coverage Tel : Momar Gueye Associate - Africa Coverage Tel : NoorAzmi Mohd Razalli Associate – Asia Tel : Jamshid Akhmedov Associate - Uzbekistan Tel : Syndications & Partnerships Ariff Hasan Principal, Syndications & Partnerships Tel :

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Islamic Corporation for the Development of the Private Sector (ICD)

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