1. ICD Marketing Presentation October 2005 Ramadan 1426

2. 2 Presentation Outline General Background Working with ICD Investment Guidelines Portfolio Review ICD Performance

3. 3 Mission & Proposed Vision  Vision The Islamic Corporation for the Development of the Private Sector (ICD) strives to be a major player in the development and promotion of the private sector in OIC member countries.  Mission To complement the role played by the IDB in promoting social and economic growth and prosperity through:  Providing Islamic financial services & products.  Promoting competition and entrepreneurship in member countries.  Encouraging cross border investments.  Advising governments & businesses.

4. 4  Type: multilateral financial institution.  Authorized capital: US$ 1 billion.  Capital available for subscription: US$ 500 million.  Headquarters: Jeddah, Kingdom of Saudi Arabia. Capital structure Member Countries 30% IDB 50% Public Financial Institutions 20 % ICD’s Capital Structure

5. 5 Shareholders of ICD Countries 1.Algeria 2.Azerbaijan 3.Bahrain 4.Bangladesh 5.Benin 6.Brunei Darussalam 7.Burkina Faso 8.Cameroon 9.Djibouti 10.Egypt 11.Gambia 12.Guinea 13.Guinea Bissau 14.Indonesia 15.Iran 16.Iraq 17.Jordan 18.Kazakhstan 19.Kyrgyzstan 20.Kuwait 21.Lebanon 22.Libya ISLAMIC DEVELOPMENT BANK Public Institutions Iran Foreign Investment Co. Bank Kesharvazi (Iran) Bank Melli (Iran) Saudi Public Investment Fund (Saudi Arabia) Banque Nationale D’Algerie Shareholders as of 06/2005 23.Malaysia 24.Maldives 25.Mali 26.Mauritania 27.Mozambique 28.Niger 29.Pakistan 30.Palestine 31.Qatar 32.Saudi Arabia 33.Senegal 34.Sierra Leone 35.Sudan 36.Suriname 37.Syria 38.Tajikistan 39.Tunisia 40.Turkmenistan 41.Uganda 42.UAE 43.Uzbekistan 44.Yemen

6. 6 Objectives  Provide a wide range of financial products and services to Private Sector projects of high potential and contribution to growth in Islamic countries.  Mobilize additional resources for the private sector development.  Encourage the development of Islamic financing and capital markets.

7. 7  Direct Financing  Structured Finance  Advisory Services  Asset Management Products & Services

8. 8 Presentation Outline Portfolio Review Working with ICD Investment Guidelines General Background ICD Performance

9. 9 Accumulated approvals in USD m

10. 10 Accumulated number of projects approved since inception

11. 11 Accumulated disbursement in USD m

12. 12 ICD operations are diversified MarketingOperationsTargets

13. 13 Portfolio by sector

14. 14 Portfolio by country

15. 15 Portfolio by mode of financing

16. 16 Presentation Outline Investment Guidelines Working with ICD General Background Portfolio Review ICD Performance

17. 17 Areas of Focus  Modern Manufacturing  ICT and Power  Health & Education  Financial Sector  SME’s Development  Advisory Services

18. 18  Company Eligibility:  Promising private sector projects introduced by experienced entrepreneurs or promoters.  Public sector enterprises under privatization.  Eligible enterprises should have:  majority voting stock in the hands of private investors, from member countries.  an appreciable contribution to the local economy or intra- regional trade. Investment Guidelines (1)

19. 19 qTerm financing:  For “Greenfield” projects: 40% of project investment cost  For expansion of existing projects: 50% of project investment cost.  Tenure: up to 7-8 years including Grace/Gestation period.  Minimum project size: US$ 5m. (Except for projects financed from lines). qEquity Investments:  Maximum participation: 33% of investee’s capital.  Clear exit strategy within 3-5 Years.  Equity projects should not have more than 30% interest bearing debt. Investment Guidelines (2)

20. 20 qSecurity & Guarantees: Various types of security or guarantees are accepted by ICD:  Mortgages/pledges.  Assignment of receivables.  Corporate guarantees from parent companies.  Personal guarantees  Bank guarantees. Investment Guidelines (3)

21. 21 Presentation Outline Working with ICD General Background Investment Guidelines Portfolio Review ICD Performance

22. 22 Working with ICD (1) qSponsor will have to send a feasibility study emanating from a recognized source of expertise, including:  A short project description (new or expansion, project concept, country, implementation time frame, etc);  Summary of project cost and financing plan (debt/equity);  Amount and purpose of the financing requested from ICD;  The project’s market potential;  Ownership and organizational structure;  Proposed collateral or guarantees. ICD usually conveys an initial reaction after about 2 weeks.

23. 23  Once all necessary information is received, the due diligence exercise would start and would typically entail site visits, involvement of consultants and desk work. qOnce finalized, the project appraisal is submitted to the Board of Directors of ICD. qTime needed for due diligence depends on several factors. A period of between 4 – 6 months is standard. qNormally, one-third of projects approved for due diligence would reach ICD Board of Directors. Working with ICD (2)

24. 24 Islamic Corporation for the Development of the Private Sector (ICD) P.O. Box : 54069, Jeddah 215514, Saudi Arabia Telephone: (966-2) 644 1644 Fax : (966-2) 644 4427 E-mail : icd@isdb.orgicd@isdb.org Website : http//www.icd-idb.org Contacts

25. 25 Presentation Outline Working with ICD General Background Investment Guidelines Portfolio Review ICD Performance

26. 26  Clean Audit Report.  Clean Sharia’a Report.  Gross Revenues Increase by 44% as compared to LY.  Core Investment Portfolio Revenues increased by 94% as compared to LY.  Liquid Investment Portfolio Revenues decreased by 42% as compared to LY.  Expenses increased by 18% as compared to LY.  Net Profit Increase by 167% as compared to LY.  Members’ Equity Increase by 11% as compared to LY. ICD 1425H Annual Report Highlights

27. 27 3 Years Balance Sheet (USD Millions)142314241425 Total Core Investment Portfolio 44.11 65.74 160.98 Total Liquid Assets Portfolio 223.51 204.28 121.46 Total Other Assets 9.79 14.96 31.87 TOTAL ASSETS 277.41 284.98 314.31 Total Members’ Equity 274.59 281.88 311.86

28. 28 3 Years Income Statement (USD Millions)142314241425 Core Investment Portfolio 4.68 8.74 16.97 Liquid Assets Portfolio 3.42 4.89 2.82 Services Revenue 0.76 0.47 0.58 Total Revenue 8.86 14.10 20.37 Expenses 7.92 11.61 13.71 Net Income 0.93 2.50 6.67

29. 29 Ratios - Financials Profitability Ratios (USD Millions)142314241425 Revenue per staff member (000’s) 285.72 381.11 433.49 Net Income to Revenue10.55%17.70%32.72% Core Revenue to Investment10.60%13.29%10.54%

30. 30 Performance Comparison Between ICD & Similar Institutions ICD 1425 IIC 2003 AFIC 2002 Total Revenue 20.37 21.95 6.28 Expenses13.7119.784.26 Net Income6.672.171.85 Total Assets314.31426.2N/A IIC: Inter-American Investment Corporation AFIC: Asian Finance & Investment Corporation

31. 31 Thank you

32. Back-up Slides

33. 33  Leasing (Ijara) ICD buys capital goods and gives the beneficiary usufruct rights for a period of time against payment of fixed periodical rentals. Repayment can start after a grace period. Ownership is transferred at the end of the rental period.  Installment Sale ICD buys capital goods and resells them to the beneficiary at a price agreed by the two parties. The repayment is made through consecutive installments. A grace period can be accorded.  Sale Contract (Istisna’a & Parallel) Istisna’a is a contract whereby ICD agrees to manufacture/acquire an asset, based on a specific order received from a client, and then, once manufactured, sells the said asset (through installments), to that client for an agreed price. Modes of Financing

34. 34  Equity This is the purest form of Islamic financing where ICD would share the project’s risks and benefits. qQuasi – Equity ICD can provide for a term financing facility that could be converted (at certain conditions) into equity, at some stage of the project life. Modes of Financing

35. 35 Net Accumulated approvals in USD m Net of cancelled Projects